Memorandum of Association has classes like name clause, registered office clause, object clause, liability clause, and capital clause.
Object clause in the memorandum of Association explains the main business activity of the company or main object of the company and the activities that will be undertaken by the company for conducting the main business activity or ancillary objects. Sometimes a company may want to change its ancillary objects or main object.
To change the objects clause of the company a resolution must be passed at the board meeting for the approval of the object clause and the company secretary or the director of the company need to certify and file the required forms with the registrar of the company. The board will need to conduct the extraordinary general meeting and for that, the board of directors must fix a day, time, and venue for the members. It is to be noted that the mood meeting should be called after giving 7 days notice The notice that contains the date, time, and venue of the extraordinary general meeting should be issued at least 21 days before the EGM.
Special resolution Must be passed in the extraordinary general meeting. A company must make some disclosures along with the passing of a special resolution if they have raised funds from the public by issuing a Prospectus.
A postal ballot will be used to procure the special resolution of the members and a notice will be issued to the members which will contain the details like total money that has been received by issuing prospectus from the public. The unutilized money from the prospectus also needs to be mentioned along with the utilized money. detailed information about the proposed change in the object clause along with the justification for the change in the object clause needs to be mentioned. The amount proposed and estimated financial impact of the proposed change on the earnings and cash flow of the companies must be mentioned in detail.
The special resolution that has been passed by the board must be published in the English newspaper and in vernacular language in the city where the registered office is located. The shareholders who have a dissenting opinion or have voted against the decision of the object clause are given an opportunity by the promoters to exit if they wish to.
MGT 14 Must be filed by the authorized director or the company secretary with the ROC. Some documents need to be attached with the form, which are a certified copy of the special resolution, notice of the extraordinary general meeting, the explanatory statement to the notice, and the altered Memorandum of Association.
Once the Registrar of Company receives the MGT 14, He will exit in the form, and in case he’s satisfied with it he’ll register the change in the object clause and issue a fresh certificate. In case the registrar of a company does not issue a fresh certificate of incorporation because he is not satisfied then the alteration or change in the object clause will remain incomplete.
After the company has received the certificate of incorporation, they must incorporate the object clause in all the copies of the Memorandum of Association.