Change Objective/Activity

Your business is expanding, so you might want to consider another path for it. Modifying the memorandum of association (MoA) and completing the required formalities is the first step towards formalizing a change in the corporate objectives.

This blog will facilitate a smooth transition for your company into a new phase and make the entire process easier for you.

Why Change Business Objectives?

The MoA’s stated company objective limits the range of actions that a corporation can do. As a result, the following circumstances call for changing the objectives:

• Company Takeover: When a company expands into another, significant changes occur. The company may keep its original branding, but its direction as well as vision often shift significantly.
• Undertaking New Ventures: When your organization enters new markets or grows vertically or horizontally, bringing new goods, services, or activities with it, you must modify your objectives to account for expansion.
• Banned or Prohibited Activities: The government’s policies are always evolving. The government can impose restrictions on authorization or declare an activity that was legal when the business began to operate illegitimately. In these situations, your business should steer clear of such action and change its objectives to prevent legal consequences.
• Eliminate Abandoned Activities: In the long run, some of the company’s activities may be unnecessary or meaningless. Under this scenario, the corporation will progressively stop these operations, which will require a revision to the objective of the organization.

What Documents are Needed to Establish the Primary Objectives of a Business?

• Altered MoA
• Notice regarding EGM
• The true copy of the special resolution has been attested.
• Minutes of the board meeting and EGM
• The attendance sheet, or register, for board meetings and general meetings is available.
• All company directors must provide proof of address.
• ID proof of all the directors of the company

Process for Changing the Company Objectives

The MoA outlines the company’s two main objectives:

• Main objective: Covering the company’s primary business activities is the main objective.
• Ancillary objective:The ancillary objective outlines the necessary tasks to execute business plans and requirements.

To change these business objectives, you need to do the five things below:

Step 1: Board Resolution

The board must convene and adopt a resolution to change the business’s name and objectives. The RoC should grant permission to a director or company secretary to sign, certify, and file the necessary forms.

After that, the members’ extraordinary general meeting (EGM) will decide on a time and location.

Step 2: Special Resolution in EGM

Members will approve a special resolution at the EGM. Members will respond to the special resolution by speaking. All members should receive a notice with specific required information. Once the members distribute this notification, the resolution passes.

Step 3: File form MGT-14 with RoC

The company and its director(s) must submit the form MGT-14 to the RoC for additional processing. The form must also include a few additional documents.

Step 4: Issuance of Fresh Incorporation Certificate

If the CIN number changes due to a change in the industry code, the business will receive a new certificate of incorporation from the RoC.

Step 5: MoA Object Clauses’s Incorporation

The company needs to make sure that the object clause is included in each copy of the MoA after the RoC issues the incorporation certificate.