The objectives of a Company are set out in its Memorandum of Association, and it must work towards those objects only. Thus, as an illustration, a stationery company with the objective of selling/purchasing stationary cannot suddenly expand into the fashion industry. In order to change the direction in which a company is headed, the Object clause of the MoA must be changed as well. The RoC carefully scrutinizes the objects clause of a company, as an objects clause with the extremely broad effect would give the board expand anywhere.

Requirements for changing the objects of a company are tedious procedural steps, so leave the work of figuring them out to our experts by signing up for our Change Objective of your Company service today and spend your time working on the new direction that your company is pushing towards.

• The Board must call for a Meeting of the Shareholders.
• Special Resolution amending the Object Clause must be passed.
• Form MGT – 14 must be duly filled and filed within thirty days of the passing of the special resolution.
• Advertisement in the newspaper(in case of a Public Company).

The company objective stated in the MoA restrict the scope within which a business can act. So, changing objectives is necessary for the following situations:

Undertaking New Ventures: When your company is expanding vertically or horizontally into new areas resulting in new products or services or activities, the objectives of a firm need to be changed to accommodate it.

Company Takeover: When another company takes over a company, major changes take place. The original company’s branding may remain the same, but more often than not, the direction and vision of the company are changed.

Eliminate Abandoned Activities: It might so happen that, over time, some of the company’s activities may prove unnecessary or pointless. In this case, these activities will be slowly abandoned, and the company will have to edit the company objective to reflect the same.

Banned or Prohibited Activities: Government policies keep changing. Sometimes an activity that was legal when the business started may be declared illegal, or the government may restrict permissions. In such cases, your company should avoid that activity and amend the objectives to avoid legal consequences.