Procedure for Change in Objects of the Company
A change in the objects of a company refers to altering the business activities or purposes for which the company was initially incorporated. This process is usually necessary when a company wants to expand, diversify, or modify its operations. The procedure involves several steps to ensure compliance with legal and regulatory requirements.
- Board Resolution: The first step involves the company’s board of directors passing a resolution to approve the proposed change in the objects. This ensures that the change aligns with the company’s current goals and business strategy.
- Shareholder Approval: After board approval, the company must seek approval from its shareholders. This is typically done through a special resolution passed at a general meeting, where a two-thirds majority of shareholders must agree to the change. This step is crucial to ensure that the decision is supported by the stakeholders who are most affected by it.
- Amendment of Memorandum of Association (MOA): Once shareholder approval is obtained, the company’s Memorandum of Association (MOA) must be amended to reflect the new business objects. This amendment is a formal legal document outlining the company’s new purposes, which must be in line with the regulations governing the industry.
- Filing with the Registrar of Companies (RoC): The amended MOA, along with the special resolution and other necessary documents, must be filed with the Registrar of Companies (RoC) for approval. The company is required to submit the prescribed forms and fees at this stage.
- RoC Approval: Upon receiving the filing, the RoC reviews the documents to ensure compliance with the law. If satisfied, the RoC approves the change, and the new objects are officially recorded.
- Public Notice: In certain jurisdictions, the company may be required to issue a public notice to inform stakeholders about the change, ensuring transparency and legal compliance.
This entire process ensures that the company remains legally compliant while keeping its stakeholders informed of the changes.
