With Vakilsearch, you follow the right method to change the objectives quickly. We help you change the objectives of your business in 3 simple steps –
To change the goals or aims and objectives of your business, you need to amend the Memorandum of Association. The MoA contains the object clause. Now, this can be difficult to do, particularly if you're a young company looking to completely change the main objects. But if you follow the right methods, it can be done quickly. For example, one mistake many companies make is to include several domains in the main objects. This will not be approved. For example, if you are in the software business, you can cover all software services in the main objects, but other services, such as design, should be included in ancillary or other objects of the company.
The MoA explains two major actions or objectives of the business.
The main object targets the major business activities of the company while the ancillary object targets the necessary activities for conducting the business plans and needs.
Due to various reasons, a company may want to change both the objectives (Main and Ancillary objects). To get it changed, you will need to follow the 5 steps which lead to the change of objectives.
Firstly, a resolution has to be passed to make the essential changes in name and objectives at the meeting. The director of the company is supposed to sign the resolution, certify and file the necessary forms with the RoC on behalf of the company. The meeting of the board should be fixed in prior. Besides that, it must contain all the necessary members of the firm to avoid any type of disputes and differences.
Secondly, a special resolution has to be passed would mention the necessary facts about the company and its workings. It will be issued to all the board members as well as members of their respective groups.
In the EGM, a special resolution will be passed by the members. The reply of the members to the special resolution is obtained through a postal ballot. All the members will be sent a notice that contains the following details:
Once this notice is circulated, the resolution is passed. Following this, the resolution is published in one English and one vernacular language newspaper in the company’s registered city. The Resolution must also be added to the Company website.
Any shareholder who voted against the changes must be given a chance to exit the company by the promoters.
If a company has raised funds from the public by issuing a prospectus and possesses some unutilised funds out of those, it has to make some disclosures along with passing a special resolution.
If the company hasn’t received any funds from the public, or the funds received are fully utilised, then the company is not required to make the disclosures, only the special resolution would be enough.
After passing the board resolution and special resolution, the company and its director(s) need to fill the MGT-14 form to the Registrar of Companies (RoC) to proceed further. Also, along with the MGT-14 form, the company will have to submit certain important documents to complete the whole process. Important documents like the below mentioned have to be submitted.
After the completion of the above steps, the company is all set to submit the form along with the necessary documents to the RoC. The RoC will check, verify all the issued documents carefully and if everything is perfect, the RoC will issue a new certificate of incorporation to the company. Hereby, that will highlight the new changes made by the company. Object article change is not completed until the RoC provides a fresh certificate of incorporation to the company.
Once the RoC issues the certificate of incorporation, the object clause must be incorporated in all the copies of Memorandum of Association (MoA).
You first need the board to pass a resolution selecting the new name and changing the objects of the company. We will ask for a few documents, which will be needed to get the approval from RoC in this regard.
We will file the necessary forms for changing the name and objects, but would also need to provide us with projected turnover details for three years and a declaration that the company will commence the business mentioned in the objects within six months.
What are the Articles of Association and Memorandum of Association?
These are documents that every Company must possess which defines the scope, rules, objectives, vision and mission of the organisation. They also contain details regarding all the shareholders and directors of the company, and are integral documents that every Company must have.
When will the changes made to the object come into effect?
The changes made to the objectives will be effective only after the Registrar of Companies receives, accepts and acknowledges the application made. After the receival of their receipt, the company has the right to carry on the updated activities.
Do we have to change the name of the company because we are altering the objectives of our company? Do these both go hand in hand?
No, both of these are not interdependent. You do not have to change the name of the company in every case. However, if the present name, in no way reflects the new activities undertaken by the company, the Registrar of Companies may request the business to change the name of the company so that it has some relations to the new activities performed by the business.
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