Changing the object clause of a company refers to modifying the activities a company is authorized to undertake, as outlined in its Memorandum of Association (MoA). This is commonly done when a company wishes to diversify its operations, enter new markets, or shift its business focus. To change the object clause, the company must convene a board meeting to approve the proposal, followed by a special resolution passed by shareholders. Afterward, the company must file Form MGT-14 with the Registrar of Companies (ROC) along with the updated MoA. If the company has raised funds from the public through a prospectus and still has unutilized funds, additional disclosures and approvals from shareholders through a postal ballot are mandatory as per the Companies Act, 2013. The new object clause becomes effective once the ROC approves and registers the amended MoA.
Conclusion: Changing the object clause allows companies to adapt to new business goals or market conditions, but it must follow a well-defined legal procedure to ensure regulatory compliance.