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Change in MOA Object Clause

Expand your business horizons legally. We assist in altering your company's Object Clause in the Memorandum of Association (MOA) with complete ROC compliance.

  • check_circle Drafting of Special Resolutions & Explanatory Statements
  • check_circle Filing of Form MGT-14 with ROC
  • check_circle Alteration of Memorandum of Association (MOA)
  • check_circle End-to-End Legal & Compliance Support
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What is the Object Clause in MOA?

The Memorandum of Association (MOA) is the charter of a company. The Object Clause within it defines the scope of activities the company is legally permitted to undertake. It sets the boundaries for the company's operations.

If a company wishes to expand into new business areas not covered by its existing object clause, it must legally alter the MOA under Section 13 of the Companies Act, 2013.

Why is it Important?

  • Legal Compliance: Engaging in business outside the object clause is considered "Ultra Vires" (beyond powers) and is void.
  • Stakeholder Trust: It informs shareholders and creditors about how their funds will be utilized.
  • Business Expansion: Essential for diversifying into new markets or product lines.

Process to Change the Object Clause

1. Board Meeting

  1. Convene a Board Meeting to approve the proposed change.
  2. Fix the date, time, and venue for an Extraordinary General Meeting (EGM).
  3. Approve the notice of EGM and the Explanatory Statement.

2. Extraordinary General Meeting (EGM)

  1. Hold the EGM on the scheduled date.
  2. Pass a Special Resolution (requiring 75% shareholder approval) to alter the Object Clause.

3. ROC Filing

  1. File Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the resolution.
  2. Attach the Special Resolution, Explanatory Statement, and the altered MOA.

4. Approval & Registration

  1. The ROC verifies the documents.
  2. Upon satisfaction, the ROC registers the change and issues a certificate or confirmation.

Forms & Fees

Form MGT-14: This is the primary form for filing the Special Resolution for alteration of MOA.

Filing Fees: The fee depends on the company's authorized share capital:

  • Up to ₹1,00,000: ₹200
  • ₹1,00,000 - ₹4,99,999: ₹300
  • ₹5,00,000 - ₹24,99,999: ₹400
  • ₹25,00,000 - ₹99,99,999: ₹500
  • ₹1 Crore or more: ₹600

Note: Late filing attracts additional penalties.

Doctrine of Ultra Vires

Any act done by the company that is beyond the scope of its Object Clause is called Ultra Vires. Such acts are:

  • Void ab initio (void from the beginning).
  • Cannot be ratified even by all shareholders.
  • Directors can be held personally liable for losses resulting from such acts.

Frequently Asked Questions (FAQs)

Your questions, answered clearly by Taza financial Consultancy Private Limited.

What is the main purpose of the Object Clause in an MOA? expand_more

It defines the main business activities the company is authorized to undertake. It protects shareholders and creditors by ensuring funds are used only for stated purposes.

How long does the process to change the Object Clause usually take? expand_more

The process typically takes 15-30 days, depending on how quickly the EGM can be convened and the ROC approves the MGT-14 filing.

Is it mandatory to pass a special resolution for changing the Object Clause? expand_more

Yes, under Section 13 of the Companies Act, 2013, a Special Resolution (75% shareholder approval) is mandatory for altering the MOA.

What happens if a company acts beyond its Object Clause? expand_more

Such acts are considered "Ultra Vires" and are legally void. The company cannot enforce contracts related to these acts, and directors may face personal liability.

Can a one-person company (OPC) change its Object Clause? expand_more

Yes, an OPC can change its object clause by passing a resolution (by the sole member) and filing Form MGT-14 with the ROC.

What is the role of the Registrar of Companies (ROC) in this process? expand_more

The ROC reviews the MGT-14 filing and the altered MOA to ensure compliance with the law. The change is only effective once registered by the ROC.

Do I need to change the Articles of Association (AOA) as well? expand_more

Not necessarily. You only need to change the AOA if the alteration in the Object Clause conflicts with existing provisions in the AOA.

What is an explanatory statement, and why is it needed? expand_more

It is a statement annexed to the EGM notice that explains the material facts and reasons for the proposed special resolution, enabling shareholders to make an informed decision.

Can the Object Clause be changed to anything the company wants? expand_more

Generally yes, provided the new object is legal and not against public policy. However, certain regulated sectors (like banking or insurance) require prior approval from regulators.

Is the process different for a public limited company? expand_more

The core process is similar, but public companies have stricter requirements for EGM notices and may need to publish the resolution in newspapers if they have unutilized money raised from the public.

What is the government fee for filing Form MGT-14? expand_more

It ranges from ₹200 to ₹600 depending on the authorized share capital of the company.

Can a change in the Object Clause be rejected by the ROC? expand_more

Yes, if the forms are incomplete, the new object is illegal, or the name of the company does not align with the new activities (in some cases).

What is the difference between the main objects and ancillary objects? expand_more

Main objects are the primary business activities. Ancillary objects are activities necessary to support or facilitate the achievement of the main objects.

Do we need a new PAN or TAN for the company after the change? expand_more

No, the PAN and TAN of the company remain the same. However, you should update the business code in your Income Tax filings.

How can I verify if the Object Clause has been changed successfully? expand_more

You can check the company's Master Data on the MCA website or download the certified copy of the altered MOA from the MCA portal.

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