Company Object Change: Procedure, Documents, Fees and Timelines
Company Object Change: Procedure, Documents, Fees and Timelines
A company is incorporated to achieve specific objectives, which define the nature of its activities and day-to-day operations. These objectives are clearly stated in the company’s Memorandum of Association (MOA). A company is legally restricted to carrying out activities that fall within the scope of its stated objects. Any act performed beyond these objectives is considered an ultra vires act and is not legally permissible.
There may be situations where a company wishes to expand, diversify, or modify its business activities. In such cases, the company can undertake a change in its object clause by following the prescribed legal procedure for altering the MOA under the Companies Act, 2013.
What is a Memorandum of Association (MOA)?
The Memorandum of Association (MOA) is commonly referred to as the charter document of a company. It is a fundamental legal document that contains all essential information about the company and defines its identity and scope of operations. Any person can understand the nature, purpose, and structure of a company by referring to its MOA.
The MOA includes key details such as the company’s name, date of incorporation, registered office, shareholders, and shareholding structure. This information is systematically divided into the following clauses:
Name Clause
Situation Clause
Object Clause
Liability Clause
Capital Clause
Declaration Clause
Nominee Clause
Each clause serves a specific purpose and collectively governs the legal framework within which the company operates.
Key Reasons for Company Object Change
A company may need to change its object clause for several reasons, including the following:
Change in Products or Services:
A company may decide to modify its existing offerings or introduce new products or services. If such activities are not covered under the current object clause of the MOA, an alteration becomes necessary.Entry into New Markets:
To support business growth and diversification, companies often expand into new markets. Introducing new lines of business or activities may require a change in the object clause.Technological Advancements:
Rapid changes in technology may compel companies to move away from outdated processes and adopt new technologies. Such transitions can necessitate updating the object clause to reflect modern business practices.Change in Consumer Preferences:
As consumer needs and preferences evolve, companies must adapt their products and services accordingly. Introducing offerings aligned with new market demand may require altering the object clause of the MOA.
Procedure for Change in Object Clause of Private Limited Company
If a company intends to carry on any business activity outside the scope of its existing object clause, it must first alter its object clause by following the prescribed legal procedure. The step-by-step process for changing the object clause of a company is outlined below:
Step 1: Passing of Board Resolution
The company must convene a meeting of the Board of Directors to obtain their approval and pass a board resolution to:
Approve the proposal for alteration of the object clause;
Convene a general meeting of shareholders;
Decide the date, time, and venue of the general meeting; and
Authorise one or more directors to carry out the entire object clause change process and related filings.
Step 2: Obtain Shareholders’ Approval
The consent of shareholders must be obtained by passing a special resolution at a duly convened general meeting approving the change in the object clause of the company.
Step 3: Intimation to the Registrar of Companies (ROC)
Within 30 days of passing the special resolution, the company must file Form MGT-14 with the Registrar of Companies (ROC), along with the following attachments:
Certified copy of the special resolution;
Notice of the general meeting;
Explanatory statement annexed to the notice; and
Amended copy of the Memorandum of Association (MOA) reflecting the altered object clause.
Procedure for Change in Object Clause of Public Limited Company
In the case of a public limited company, certain additional compliances must be followed while changing the object clause, in addition to the standard procedure. These include:
The special resolution must be passed through a postal ballot
Details of the special resolution must be published in one English newspaper and one vernacular language newspaper
The special resolution must also be disclosed on the company’s website, if any
Dissenting shareholders must be provided with an exit opportunity, in accordance with applicable provisions
These additional requirements ensure transparency and protect the interests of shareholders in a public company.
Documents required for Company Object Change
To successfully effect a change in the object clause, the company is required to file the following documents with the concerned authority:
Certified copy of the special resolution passed by the shareholders
Notice of the general meeting
Explanatory statement annexed to the notice of the general meeting
Amended copy of the Memorandum of Association (MOA) reflecting the altered object clause
These documents ensure that the change in the object clause is duly approved and recorded in accordance with the Companies Act, 2013.
Fees for Company Object Change
The fees for changing the object clause of a company depend on its share capital. The applicable fee structure is as follows:
ROC Fees for Company Object Change
| S. No. | Share Capital | Fees |
|---|---|---|
| 1 | Less than ₹1,00,000 | ₹200 |
| 2 | More than ₹1,00,000 up to ₹4,99,999 | ₹300 |
| 3 | More than ₹5,00,000 up to ₹24,99,999 | ₹400 |
| 4 | More than ₹25,00,000 up to ₹99,99,999 | ₹500 |
| 5 | ₹1,00,00,000 and above | ₹600 |
BizCatalyst Professional Fees
Object Clause Change – Professional Fee: ₹4,999 (excluding GST)
These charges cover statutory filing fees and professional assistance for completing the object clause alteration in compliance with the Companies Act, 2013.
Timeline for Object Change
Changing the object clause of a company involves filing Form MGT-14, drafting an amended Memorandum of Association (MOA), and submitting the revised MOA for approval with the Registrar of Companies (ROC). While the procedure is straightforward, professional assistance helps ensure accuracy and compliance at every stage. The entire object change process generally takes approximately 7 to 8 working days, subject to timely approvals.
Penalty for Non-Compliance
Any company intending to change its object clause must strictly comply with the provisions of Section 13 of the Companies Act, 2013. Non-compliance with the prescribed procedure attracts penalties.
If a company delays filing Form MGT-14 with the Registrar of Companies (ROC), the following additional fees (penalties) are applicable based on the period of delay:
| Delay Period | Penalty |
|---|---|
| Delay up to 30 days | 2 times the normal fee |
| More than 30 days and up to 60 days | 4 times the normal fee |
| More than 60 days and up to 90 days | 6 times the normal fee |
| More than 90 days and up to 180 days | 10 times the normal fee |
| More than 180 days | 12 times the normal fee |
Timely compliance helps avoid substantial penalties and ensures that the object clause change remains legally valid.
