Procedure for Change in Objects of the Company

Aakanksha Singhal

Aakanksha Singhal

Published on: Oct 1, 2020

Khushboo Sharma

Updated on: Dec 19, 2024

★★★★★(33 Rating)

29459

Introduction

Change in Object clause of the Company involves Alteration of Memorandum of Association of the Company. Section 13 of Companies Act 2013 regulates the process of amendment in Memorandum of Association and is applicable to all Companies.

Section13 of the Companies Act, 2013 deal with change of object which says that the object of the company can be changed by a special resolution and the Registrar shall register any alteration of the memorandum with respect to the objects of the company and certify the registration.

Applicable Provisions:

1. Section 13 & 173 of Companies Act, 2013
2. Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Mandatory Requirements

1. No alteration made in Memorandum shall have any effect until it has been registered by the Registrar.
2. No alteration shall be made effective until it has been approved by Members of the Company by way of Special Resolution.

Following Procedure is to be followed

1. Convene a Meeting of Board of Directors [As per section 173 & SS-1]
   • Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
   • Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
   • Hold a meeting of Board of Directors of the Company and pass the necessary Board Resolutions
     • to consider and approve the alteration in the Object Clause of MOA of the Company subject to Members’ Approval of the Company.
     • to fix day, date, time and venue for holding General Meeting of the Company.
     • to approve the draft notice of General Meeting or Postal Ballot along with explanatory statement annexed to the notice as per requirement of the Section 102 of the Companies Act, 2013.
     • to authorize the Director or Company Secretary to sign and issue notice of the General Meeting or Postal ballot and to do such acts, deeds and things as may be necessary to give effect to the Board’s decision.
     • to delegate authority to Company Secretary or any one director of the company to sign, certify and file the required form with Registrar of Companies and to do all such acts and deeds as may be necessary to give effect to the alteration of Object Clause.
   • Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
2. Obtain Shareholders’ Approval
   • By Convening a General Meeting, OR
   • By Passing a Resolution by Postal Ballot. [Refer the Procedure for Passing of a Resolution by Postal Ballot]
   Convene General Meeting [Section 96, 100 and SS-2]
   • Notice of General Meeting shall be given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.
   • Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
   • Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
   • Hold the General Meeting on fixed day and pass Special Resolution for change in the object clause of the Company and make relevant changes in the Memorandum of Association (MOA).
   • Listed Company shall:
     • disclose the proceeding of General Meeting in respect of proposed amendments to memorandum and articles of association, in brief, to the Stock Exchange, within 12 hours* from the occurrence of the event or information, in case the event or information is emanating from within the listed entity and
     • disclose details of e-voting results in the format specified by the Board, to Stock Exchange, within 2 working days of the conclusion of General Meeting.
     *Note: In case the event or information emanates from a decision taken in a meeting of board of directors, the same shall be disclosed within 30 minutes from the closure of such meeting as against the timeline indicated above.
   • Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting].
3. File Form MGT-14 with ROC
   File Form MGT-14 with the ROC within 30 days of passing Special Resolution in General Meeting along with fee as specified in the Companies (Registration offices and fees) Rules, 2014 and with the following attachments:
   • Certified True Copies of the Special Resolution passed along with Explanatory Statement.
   • Copy of the Notice of meeting sent to members along with all the annexure
   • Shorter Notice Consent Letters from the members in case the General Meeting was convened at shorter notice.
   • Certified Altered copy of printed copy of the Memorandum of Association and Article of Association
   • Copy of Attendance Sheet of General Meeting
   • Any other attachment as may be applicable.
4. Certification by ROC
   After receiving MGT-14 and on being satisfied with all the details, Registrar shall register the new objects and certify the registration within 30 days from the date of filing the Special Resolution.
5. The Alteration in MOA shall be made in every copy of Memorandum of Association.