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A company registered under Section 8 of the Act shall not alter the provisions of its memorandum of association or articles of association (for any clauses) of the company, except with the previous approval of the Central Government (the powers have been delegated to the Registrar of Companies). An application for such alteration for Section 8 company may be filed by e-Form GNL – 1.
Such application to the Central Government (i.e. ROC) can be made by obtaining the approval of Board of Directors. After the approval of Central Government (i.e. ROC), the amendment to the memorandum of association shall be placed before shareholders for their approval. The company shall then file e-Form MGT-14 with the ROC.
An application for such alteration for Section 8 company may be filed by e-Form GNL-1 with ROC.
Such FORM GNL-1 to the Central Government (i.e. ROC) can be made by obtaining the approval of Board of Directors.
Subject to the compliance of Companies Act, a company can change or alter its object clause. Such change in object clause of the company would be increase the scope of business activity of the company/expand business operations, include an object clause of the company (which is not there), statutory purpose (for certain Insurance Regulatory and Development Authority (IRDA)/SEBI registered intermediaries, etc.). Such alteration would also include deletion of obsolete and redundant objects included in the memorandum of association of the company. This article relates to the compliance checklist for altering the object clause of the memorandum of association of the company.
“object clause”.—Under Section 4 of the Act, the object clause shall contain the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof. Here, the relevant provisions are Schedule I to Act which Tables A, B, C, D and E.
The directors of the company shall primarily approve the proposal for altering object clause of the company. Such approval shall be subject to the approval of the shareholders and Central Government (in case of Section 8 companies). The necessary authorities shall also be specified in the resolution. The directors shall then call for shareholders meeting and authorise the director(s) or company secretary to issue notice to the shareholders. The resolution passed shall be accordingly drafted. The notice shall be issued in accordance with the Act, Rules made there under and the provisions of the articles of association of the company. The company shall ensure compliance of Sections 101 and 102 of the Act (according to the applicability and provisions in articles of association of the company). In case of public companies or private companies that are subsidiary of public companies, if the amendment to the object clause amounts to diversification of business activity, then in such cases, such companies shall file e-Form MGT-14