ALTERATION IN OBJECT CLAUSE OF MEMORANDUM OF ASSOCIATION (MOA)
A Memorandum of Association (MOA) is a fundamental document that outlines the conditions under which a company operates. It contains essential information like the company’s name, registered office address, objectives, authorized share capital, and details of shareholders and their liability. The object clause in the MOA defines the company’s purpose. This article explores the reasons for amending the object clause and the procedure for doing so.
CONTENTS OF MOA
The MOA of a company consists of five clauses:
1. NAME CLAUSE- This is the first clause in every MOA that states the name of the Company with the last word as Private Limited, Limited, OPC Private Limited depending upon the type of Company.
2. REGISTERED ADDRESS CLAUSE- This clause states the name of the state where the registered office of the company is situated.
3. OBJECT CLAUSE- This clause states the objects for which the company is incorporated.
4. LIABILITY CLAUSE- This clause states that the liability of the members of the company whether it is limited or unlimited.
5. CAPITAL CLAUSE- The fifth clause of the MOA, the capital clause, states the company’s share capital. This clause must specify the total number of share capital with which the company is registered, the number of shares of each kind and the face value of each share.
REASONS TO AMEND MOA
Following are the reasons for amendment in MOA:
1. Change in the company name
2. Change in location of the registered office of the company
3. Change in main/ancillary objects of the company
4. Change in the nature of liability of members of the company
5. Change in the amount of authorised capital of the company or division of authorised capital.
PROCEDURE FOR AMENDMENT IN OBJECT CLAUSE
1. Issue Notice of Board Meeting to all the directors of company at least 7 days before the date of Board Meeting along with agenda of meeting.
2. Conduct Board Meeting and pass the following Board resolution for proposed new objects of the company and fix the date, time & venue for shareholders’ meeting.
RESOLVED THAT pursuant to provisions of Section 13(1), (9) of The Companies Act, 2013 read with Rule 32 of the Companies (Incorporation) Rules, 2014 and subject to approval of shareholders of the company, the consent of Board of Directors of the company be and is hereby accorded to amend sub clause (X) after sub clause (X) of clause III. (A)/(B) of the Memorandum of Association of the Company.
[Description of alteration] for example. Additional/deletion/modification of sub clause (X) to the existing clause (X) of the Memorandum of Association……………………….
RESOLVED FURTHER THAT the (name and designation of authorised representative) of the Company be and is hereby authorized for and on behalf of the Company to sign and file all the requisite e-forms including MGT-14 along with such other documents as may be required, with the Registrar of Companies and to do all such acts, deeds, matters and things which may deem necessary in this behalf.”
3. Issue notice of extra ordinary general meeting to all the members of the company along with explanatory statement.
4. Conduct extra ordinary general meeting and pass Special Resolution u/s 114(2) for approval of alteration of MOA.
RESOLVED THAT pursuant to provisions of Section 13(1), (9) of The Companies Act, 2013 read with Rule 32 of the Companies (Incorporation) Rules, 2014, the consent of shareholders of the company be and is hereby accorded to amend sub clause (X) after sub clause (X) of clause III. (A)/(B) of the Memorandum of Association of the Company.
[Description of alteration] for example. Additional/deletion/modification of sub clause (X) to the existing clause (X) of the Memorandum of Association…………………………
RESOLVED FURTHER THAT the (name and designation of authorised representative) of the Company be and is hereby authorized for and on behalf of the Company to sign and file all the requisite e-forms including MGT-14 along with such other documents as may be required, with the Registrar of Companies and to do all such acts, deeds, matters and things which may deem necessary in this behalf.”
5. File FORM MGT-14 with the ROC within 30 days from the passing of special resolution.
6. The ROC shall register the change in object clause by issuing a fresh certificate of incorporation. Object clause change is not completed until the RoC issues a fresh certificate of incorporation.
7. Once the certificate of incorporation is received from the RoC, the change in object clause must be incorporated in all the copies of Memorandum of Association.
ATTACHMENTS TO FORM MGT-14
i. Copy of notice sent to all the members along with explanatory statement
ii. Certified true copy of the special resolution
iii. Amended copy of MOA
iv. Consent for shorter notice, if any.
Conclusion:
Altering the object clause in the MOA is a crucial step for companies looking to adapt to changing circumstances or objectives. It involves a formal procedure, which includes obtaining approvals from the board and shareholders, filing necessary forms with the RoC, and updating the MOA copies. Staying compliant with these procedures is essential for a smooth transition and legal integrity.
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Disclaimer: This article is for informational purposes and not solicitation. For further clarification, contact the author at 9953808432 or cssinghaniaandassociates@gmail.com.
This guide provides a comprehensive overview of the process, ensuring that companies can navigate the amendment of their MOA’s object clause successfully.
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