Change in Objects of Company
Under the Companies Act, 2013, the objects of a company represent the purpose for which the company has been incorporated. These objects are stated in the Memorandum of Association (MOA) and define the scope of activities a company can legally undertake. Any activity beyond these objects is considered ultra vires.
Types of Objects of a Company
Main Objects of a Company
Main objects are the primary business activities for which the company is formed. They must be clearly, specifically, and lawfully stated in the MOA.
Ancillary / Incidental Objects of a Company
Ancillary or incidental objects are supporting activities that help in achieving the main objects. These are not independent business goals but are essential for smooth operations.
Change in Objects of Company
A company can change its objects only by passing a Special Resolution, after which the Registrar of Companies (ROC) updates the company’s records.
Any change in objects of a company requires alteration of the object clause of the MOA. The procedure for change in objects of company is governed by Section 13 of the Companies Act, 2013.
Reasons for Change in Objects of Company
Diversification
A company may change its objects to enter new industries or business segments to reduce dependency on a single source of income and manage risks effectively.
Expansion
Objects may be altered to permit geographical expansion or introduction of new products and services, enabling the company to scale its operations.
Strategic Realignment
Companies may change their objects to align with revised long-term strategies, including focus on more profitable or innovative business models.
Compliance Requirements
Amendment of objects may be required due to changes in laws, regulations, or government policies, especially where regulatory approvals or licences are necessary.
Mergers and Acquisitions
In mergers or acquisitions, alteration of objects ensures alignment with the business activities of the merged or acquiring entity.
Financial Restructuring
Objects may be changed to support financial restructuring such as debt restructuring, asset divestment, or fund raising.
Stakeholder Expectations
Shareholders or investors may require change in objects to align business activities with emerging market trends and stakeholder expectations.
Process for Change in Objects of Company
Board Meeting for Change in Objects of Company
The process begins with a meeting of the Board of Directors, where the Board shall:
- Consider and approve the proposal for change in objects of company
- Finalise the revised object clause
- Approve the draft Special Resolution
- Approve the Notice of EGM with Explanatory Statement under Section 102
- Fix the date, time, and venue of the EGM
Outcome: Board approval to initiate shareholder consent for change in objects of company.
Issuing Notice of EGM for Change in Objects of Company
Notice of EGM must be sent at least 21 clear days before the meeting to:
- Shareholders
- Creditors
- Debenture holders
- Directors and Auditors
The notice shall include:
- Date, time, and venue of EGM
- Text of Special Resolution for change in objects of company
- Explanatory Statement
- Draft altered MOA
Holding EGM for Change in Objects of Company
At the EGM:
- The Special Resolution for change in objects of company is placed before members
- Members discuss and seek clarifications
- Voting is conducted as per applicable provisions
Approval Required: Minimum 75% majority (Special Resolution).
Filing with ROC – Form MGT-14 for Change in Objects of Company
The company shall file Form MGT-14 with the ROC within 30 days of passing the Special Resolution.
Attachments include:
- Certified copy of Special Resolution
- Notice of EGM
- Explanatory Statement
- Altered MOA
- Certified true copy of minutes
ROC Approval for Change in Objects of Company
The ROC scrutinises the documents for compliance. Upon satisfaction:
- The alteration is registered
- Change in objects of company becomes legally effective
Impact on Certificate of Incorporation due to Change in Objects of Company
- If only the object clause is altered and the NIC Code remains unchanged, the CIN will not change.
- If change in objects of company results in change of industry/NIC Code, the CIN will change.
Normally, change in objects of company does not result in change of CIN.
- Fresh Certificate of Incorporation
- Updated CIN reflecting the new industry classification
In such cases, ROC issues:
Post-Approval Compliances after Change in Objects of Company
- Update altered MOA in all records
- Update internal manuals and digital records
- Inform banks, lenders, and regulatory authorities wherever required
For All Companies
- Intimate stock exchanges within 24 hours of approval
- Upload altered MOA on company website within 2 working days
For Listed Companies
Final Outcome of Change in Objects of Company
Upon completion of all statutory procedures and ROC approval, the change in objects of company becomes effective. The revised object clause forms part of the MOA, and the company is legally authorised to carry on business strictly in accordance with its new objects. Any activity beyond the revised objects shall be treated as ultra vires the company.
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FAQs on Change in Object of the Company
What is the “object clause” of a company?
The object clause states the purpose for which a company is formed and the types of activities it is allowed to undertake. It is a part of the Memorandum of Association (MOA).
Can a company change its object clause?
Yes. A company can alter its object clause by passing a special resolution and filing the updated MOA with the Registrar of Companies (ROC).
Which section of the Companies Act deals with change in objects?
Section 13 of the Companies Act, 2013 governs alteration of the object clause in the MOA.
What approval is needed to modify the objects?
A special resolution passed by shareholders holding at least 75% voting power is required.
Is Central Government approval required for change of objects?
Generally no, unless the company belongs to a sector that requires prior approval from a specific authority or regulator (for example: RBI, SEBI, IRDAI, etc.).
Do creditors need to be informed about the change?
Yes. Notice of the EGM must be sent to all creditors, debenture holders, and shareholders at least 21 days before the meeting.
Which ROC form is filed for changing objects?
The company must file Form MGT-14 within 30 days of passing the special resolution.
Will a fresh Certificate of Incorporation be issued?
Yes. After the ROC registers the alteration, it issues a fresh Certificate of Incorporation reflecting the updated object clause.
Does CIN change when the object clause is changed?
No, CIN does not change only because objects are altered.
CIN changes only when the company’s NIC Code/industry category changes due to modification in objects.
Do listed companies have extra compliance?
Yes. A listed company must:
- Submit the altered MOA to the stock exchange within 24 hours, and
- Upload it on the company website within 2 working days.
Is there any change in PAN or TAN after modifying objects?
No. PAN and TAN remain unchanged even if the object clause is altered.
Does object change require alteration in Articles of Association (AOA)?
No, unless the AOA contains specific limitations related to the company’s objects.
How long does the ROC take to approve object change?
Normally a few working days, depending on ROC workload and accuracy of documents filed.
What documents are required for changing objects?
- EGM Notice + Explanatory Statement
- Special Resolution (CTC)
- Altered MOA
- Minutes of Board Meeting & EGM
- Attendance registers
- Subscriber sheet (if applicable)
Can a company start new activities immediately after passing the resolution?
No. The company must wait until the ROC registers the alteration and issues a fresh Certificate of Incorporation.