Changing Company Name & Objectives - Overview:
As your company grows and evolves, it is normal that you want to take your company in a direction that you didn’t anticipate before. When the objectives of your business change, it is necessary to make it official by amending the memorandum of association (MoA) and fulfilling other formalities for the same.
Actolegal’s service can make this whole process easy for you and pave the way for a comfortable transition into a new phase for your business.
Why Change Business Objectives?
The business objectives 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 need to be changed to accommodate it.
Company Takeover: When a company is taken over by another company, major changes take place. The branding of the original company may continue to remain the same, but more often than not, the direction and vision for the company are changed.
Eliminate Abandoned Activities: It might so happen that, over time, some of the activities of the company may prove to be unnecessary or pointless. In which case these activities will be slowly abandoned and the company will have to edit the objectives 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.
Process to Change the Objective of the Company
The MoA explains the two major objectives of the business:
- Main object: Covers the major business activities of the company
- Ancillary object: Covers the necessary activities for conducting the business plans and needs.
To get these objectives changed, you will need to follow the 5 steps:
Step 1: Board Resolution
A meeting of the board should be held and a resolution has to be passed to make the essential changes in the name and objectives of the company. A director/company secretary should be authorized to sign, certify, and file the required forms with the RoC.
Following that, a place and time will be fixed for conducting an extraordinary general meeting (EGM) of members.
Step 2: Special Resolution in EGM
In the EGM, a special resolution will be passed by the members. The reply of the members to the special resolution is obtained. All the members should be given notice with certain mandatory information. Once this notice is circulated, the resolution is passed.
Step 3: File form MGT-14 with RoC
The form MGT-14 needs to be filed with the RoC by the company and its director(s) to process further. Some other documents need to be attached with the form for the same (listed below).
Step 4: Issuance of Fresh Certificate of Incorporation
In case the CIN number changes due to a change in the industry code, the RoC will issue a new certificate of incorporation to the company.
Step 5: Incorporation of the MoA Object Clauses
After the RoC issues the incorporation certificate, the company must take steps to incorporate the object clause in all the MoA copies.
- Notice regarding EGM
- Attested true copy of the special resolution
- Minutes of the board meeting and EGM
- Altered MoA
- A certified true copy of the board resolution (optional)
- Id proof of all the directors of the company
- Address proof of all the directors of the company
- Attendance sheet or register of board meetings and general meetings