OBJECT CLAUSE
The object clause explained why the company is establishing.
Companies aren't legally allowed to do any kind of business other
than the kind of business that is specifically stated in this clause. An
object clause should contain:
A list of the main objects the company will be pursuing after it's
Incorporated Incidental objects that are necessary to achieve the
main object.
Any other objects that aren't included in the main
objects or incidental object.
Nothing illegal.
Nothing that's against the public interest.
Nothing that's against the country's general rule of law.
ALTERATION OF OBJECT CLAUSE
Whenever a company is incorporated it shall prepare an
MOA (Memorandum of Association). It is the very First
step for company incorporation as it defines the area
within which the company can operate during its
existence. One of the Clauses of Memorandum is Object
Clause, which defines as well as confines the areas within
which it will operate.
It defines the very object/purpose for which it is
being incorporated. But there are many situations
that come in front of companies when it has to make
alterations in its object clause i.e., addition or
deletion of some objects. The very common reason
for alteration is expansion.
REGISTERED OFFICE CLAUSE
The registered office clause lists the name of the state where the
company's registered office is physically located. The registered
office's physical location determines which jurisdiction the
Registrar of Companies and which court the company would fall
under. It also confirms the company's nationality.
The registered office's full address must be provided to the
Registrar of Companies to simplify further communications.
ALTERATION OF REGISTERED OFFICE CLAUSE
In case, the company wants to change its registered office, then this
alteration in the registered office clause of Memorandum will come
under clause Section 12.
Here, the Registrar will register any alteration in the Memorandum
with respect to the objects of the company and then certify the
registration within a period of 30 days. Any such change in the
Memorandum results in the transfer of the registered office of a
company from one state to another.
CASE STUDY
STUDY THE FOLLOWING CASE STUDY AND ANSWER THE FOLLOWING
QUESTION AND EXPRESS YOUR OPINION:
1. The object clause of memorandum of a company stated the main object as
the manufacturing of plastic chairs and tables and any other activity in
furtherance of achievement of its main activity. The board of directors wants
to now also produce TV. Serials and feels that the shareholders may
give their permission.
a) Can the company with immediate effect start producing TV serials? Why ?
b) How can the object clause of the company be altered ?
Solution.
a) The company cannot start producing TV serials
immediately. This is because producing a TV serial is not
the main as well as an ancillary object for which company
is incorporated. A company cannot do anything beyond or
outside the scope of objects. The object of producing TV
serials is a completely different objects from the main
object of manufacturing plastic chairs and tables.
b) The object clause of the company can be
changed by passing a special resolution in the
general meeting of the shareholders. The resolution
which is passed by 3/4 majority of votes is called
th
special resolution.
