How To Change Objects Of A Company?

During the

in India, the objects or objective of the company are mentioned in the Memorandum of Association. In some cases, after registration of the company, there maybe a requirement for changing the objective of the company due to various requirement. In this article, we look at the process for changing the objects of a private limited company and

public limited company

Give Notice of Change of Objects

To change the objects of a company, a Board Meeting must be conducted after giving notice to all the Directors of the company to fix the date, time, place and agenda for a General Meeting to pass a Special Resolution for altering the MOA of the Company. Notice must be issued for General Meeting by giving not less than 21 days notice in writing proposing the Special Resolution with suitable Explanatory Statement. In case of a listed or unlisted public company having 200 or more shareholders, then the special resolution can be passed only through a postal ballot.

Conduct General Meeting

After providing due notices, the General Meeting must be conducted for passing of the Special Resolution by three-fourths majority. For listed or unlisted public company, there is no requirement to hold a General Meeting. The Special Resolution must be passed by a postal ballot and the results of the postal ballot can be announced by the Chairman or Director. Further, for listed companies, the following steps must be completed:

Copies of the notices sent to shareholders must be send to the stock exchanges, on which the company is listed.
Copies of the amendments must be filed with the stock exchange as soon as the company adopts the altered MOA in its general meeting.
Copies of the notice and proceedings at the General Meeting must be submitted to the stock exchange.

File MGT-14

On completion of the General Meeting and passing of the special resolution, a copy of the special resolution passed along with an explanatory statement must be filed with the concerned ROC within 30 days. The MGT-14 must be digitally signed by the Managing Director or Manager or Secretary of the Company authorised by Board Resolution along with the digital signature of a Chartered Accountant or Company Secretary in whole-time practice.

Change the MOA

After filing MGT-14 and obtaining approval from the Registrar, the company must make necessary changes to every copy of the

Memorandum of Association

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Frequently Asked Questions

Common questions about Change Company Objectives in India.

Changing the objects of a company may become necessary due to various reasons, such as diversification of business activities, expansion into new areas, or aligning with changing market conditions. By modifying the objects clause in the Memorandum of Association, the company can legally pursue new objectives or alter its existing business scope.

The process of changing the objects of a company is initiated by convening a Board Meeting and giving notice to all the directors to fix the date, time, place, and agenda for a General Meeting. The purpose of the General Meeting is to pass a Special Resolution for altering the Memorandum of Association (MOA) of the company.

For changing the objects of a company, a notice of not less than 21 days must be given in writing to the shareholders, proposing the Special Resolution with a suitable Explanatory Statement.

In a General Meeting, the Special Resolution for altering the MOA must be passed by three-fourths majority of the shareholders present and voting. For listed or unlisted public companies with 200 or more shareholders, the Special Resolution can be passed through a postal ballot instead of a physical General Meeting.

For listed companies, copies of the notices sent to shareholders must be sent to the stock exchanges where the company is listed. Additionally, copies of the amendments and proceedings of the General Meeting must be submitted to the stock exchanges.

After passing the Special Resolution, a copy of the resolution along with an explanatory statement must be filed with the Registrar of Companies (ROC) within 30 days, using the MGT-14 form. This form must be digitally signed by authorized representatives of the company.

Once the approval from the Registrar is obtained and MGT-14 is filed, the company must make necessary changes to every copy of the Memorandum of Association to reflect the altered objects.

While a company can change its objects as per the prescribed procedure, it is advisable to carefully consider the timing and implications of such a change. Any significant alteration to the company's objects may require regulatory approvals and could impact stakeholder interests.

Yes, the objects of a company must be lawful and in compliance with applicable laws and regulations. Additionally, the objects should not be contrary to public policy or involve any illegal or unethical activities.

Failure to follow the prescribed procedure for changing the objects of a company can lead to legal complications and potential penalties. The altered objects may not be considered valid, and the company may face challenges in conducting business activities beyond its original scope.