7/11/2015

AdoptionOfMOA&AOAunderCompaniesAct,2013

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AdoptionOfMOA&AOAunderCompaniesAct,2013
PostedInCompanyLaw|Articles,Featured|9Comments
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AdoptionOfMOA&AOAunderCompaniesAct,2013

CSDiveshGoyal

AMENDMENTINMAINOBJECTS,IFTHECOMPANYISCARRYINGANYBUSINESS
COVEREDUNDEROTHEROBJECTSINTHEMEMORANDUMOFASSOCIATION.
1.PROVISIONSFOROBJECTCLAUSEUNDERCOMPANIESACT1956
AsperSection13oftheCompaniesAct,1956theObjectClauseofacompanyshallbedivided
intothreecategories:
1.(i)MainObjects
(ii)Objectsincidentalorancillarytotheattainmentofthemainobjectsand
1. Otherobjects.
ACompanycancarryonthebusinessmentionedintheMainObjectClauseandIncidentalobjectclauseingeneralcourseofbusiness .Thereis
noneedtopassanyBoardResolutionandGeneralMeetingresolution.HOWEVER
IfaCompanywanttocarryonbusinessmentionedinOtherobjectofCompanythenAsperprovisionsofsubsection2AofSection
149ofCompaniesAct,1956:
A.AnexistingPUBLICLIMITEDCOMPANYwhichproposes totakeupanewbusiness ,whichiscoveredintheotherobjectsofthe
Memorandum,candosoonlyaftertheproposalisapprovedbythemembersbyaspecialresolution.
PROCEDUREFORSTARTINGNEWBUSINESSACTIVITIESCOVEREDUNDERTHEOTHEROBJECTCLAUSESForthepurposeof
obtainingapprovalbywayofspecialresolutionthefollowingstepshavetobetakenbythecompany:
(i)HoldaBoardmeetingtoconsiderandapprovingtheproposalforcarryingspecifiedbusinessactivitiesbeingmentionedinOtherObjects.
(ii)TheBoardshallalsofixthedate,timeandplaceforholdingageneralmeeting,approvethenoticeofthegeneralmeetingandexplanatory
statementandauthorizetoanydirectororsecretary forissuanceofnoticetothemembersaspertherequirementoftheAct.
(iii)TheproposaltostartthenewbusinesswillhavetobeapprovedbythemembersbywayofaSpecialResolution.
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Wherethespecialresolutioncouldnotbepassedatthegeneralmeeting,thecompanyisrequiredtobeapprovedtheproposalbypassingan
ordinaryresolutionandshallrequiretomakeanapplicationtotheCentralGovernmentrequestingforaccordingpermissiontothe
commencementofnewbusiness.
IntheabsenceofanyFormforsuchpurposes,thecompanymayapplyonsimplepaperstatingwithfullgroundandjustificationalongwiththe
fees.AfterreceiptoftheapprovaloftheGovernment,thecompanyisrequiredtofilethedeclarationineForm20AwithROC
(iv)FileeForm23asdesiredbysection192withthecertifiedcopyofthespecialresolutionwithexplanatorystatement.
(v)FileadeclarationineForm20AelectronicallyandastampedcopybesubmittedsimultaneouslytotheRegistrarofCompaniesonthestamppaper
totheeffectthattheprovisionsofsection149(2A)subclause(i)havebeencompliedwith.
B.**AnexistingPRIVATELIMITEDCOMPANYwhichproposestotakeupanewbusiness,whichiscoveredintheotherobjectsofthe
Memorandum,candosoonlyafterPASSINGOFBOARDRESOLUTIONintheBoardmeetingofCompany.Becausesection149ofCompanies
Act,1956doesnotapplyonPrivateLimitedCompany.
Asperabovediscussion:
APublic LimitedCompanyafterpassingtheSpecialResolutioncancarryonthebusinessmentionedintheOtherObjectsClauseofMOAwithout
additionofObjectintheMainObjectsClauseoftheMOA.
APrivateLimitedCompanyafterpassingofBoardResolutioncancarryonthebusinessmentionedintheOtherObjectsClauseofMOAwithout
additionofObjectinMainObjectsClauseoftheMOA.
2.PROVISIONSFOROBJECTCLAUSEUNDERCOMPANIESACT2013:
AsperSection4oftheCompaniesAct,2013theObjectClauseofacompanyshallbedividedintotwocategories:
1. MainObjects
2. Objectsconsiderednecessaryinfurtheranceofthemainobjectsand
ThereisnothinglikeOtherObjectClauseinCompaniesAct,2013.AtpresentcompaniescanonlyhaveabovegiventwotypesofObjects.One
forwhichcompanywillincorporateandsecondoneareforattainingthemainobjects.
SampleofobjectsclauseintheMOAunderCompaniesAct,2013:
III.TheobjectsforwhichtheCompanyisestablishedare:
(A)THEOBJECTSTOBEPURSUEDBYTHECOMPANYONITSINCORPORATIONARE:
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(B)MATTERSWHICHARENECESSARYFORFURTHERANCEOFTHEOBJECTSSPECIFIEDINCLAUSEIII(A)ARE:
AsperSection6oftheCompaniesAct,2013:SaveasotherwiseexpresslyprovidedinthisAct
(b)anyprovisioncontainedinthememorandum,articles,agreementorresolution
shall,totheextenttowhichitisrepugnanttotheprovisionsofthisAct,becomeorbevoid,asthecasemaybe.
MeaningofRepugnant:LogicContradictoryinconsistentorincompatible
Therefore,ifwereadSectoin4alongwithSection6ofCompaniesAct,2013
AsperSection4ofCompaniesAct,2013,therearenoprovisionsofOtherObjectClauseinMemorandumofCompany.
AsperSection6anyprovisioncontainedinthememorandumtotheextenttowhichitisrepugnanttotheprovisionsofthisAct,becomeorbe
void.
Conclusion:OtherObjectClausementionedintheMemorandumofAssociationofCompanyIncorporatedunderCompaniesAct,1956isrepugnant
totheprovisionofMemorandumofAssociationofCreatedunderCompaniesAct,2013.ThereforeaspermyunderstandingatpresentOtherobjectis
notinexistenceevenmentionedintheMemorandumofAssociationoftheCompany.
Question:IfanExistingCompany(CompanyIncorporatedbefore31stMarch,2014)carryinganybusinessasgiveninOtherObjectclauseof
companyasperprovisionsofCompaniesAct,1956thenhowcanitcontinuewiththatobjectinpresentsituation?
3.ACTIONTOBETAKENBYCOMPANIESUNDERCOMPANIESACT2013:
MainObjectofMemorandumofAssociationoftheCompanytobeamendedtoADD:
A.Allthebusinessiscarriedonbycompany,beingadoptedfromOtherObjectofMOA.
B.ObjectstobepurposedtobecarriedinFuture.
A.ToAddActivityofOtherObjectclauseintoMainObjectclauseofcompany:TocontinuewiththeActivitiesmentionedunderOtherObject
ClauseofCompanyatpresent,thereisneedtofollowprocedureasperSection13ofCompaniesAct,2013toaltertheMemorandumofAssociation
ofcompanybyADDITIONofotherobjectsintoMainobjectsofcompany.
B.ifCompanyplanningtostartnewbusinessalongwithpresentbusinessincomingfuture,thencompanycanfollowprocedureasperSection13of
CompaniesAct,2013toaltertheMemorandumofAssociationofcompanybyADDITIONofnewobjectsintoMainobjectsofcompany.
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Example:
1. IfaCompanyhaveMainObjectofTradingofgarments andcompanyplanningtostartbusinessofdealinginpaperproductalongwithtrading
ofgarmentsforgrowthandanyotherpurpose,thancompanycanmakeADDITIONofobjectsofdealinginpaperalongwithtradingof
garments,byfollowingprocedureofSection13ofCompaniesAct,2013.
IfaCompanygoingtoAlterMainObjectClauseofMemorandumofAssociationaspergivenabove.Companyshoulddofollowingthingsalso:
C.ToamendthetitleofincidentalobjectClauseoftheMemorandumOfAssociation:
ClauseIII(B)oftheobjectsthatareincidentalorancillarytotheattainmentofthemainobjectsoftheMemorandumofAssociationbeand
herebyreplacedwiththetitleMATTERSWHICHARENECESSARYFORFURTHERANCEOFTHEOBJECTSSPECIFIEDIN
CLAUSEIII(A)ARE:
D.DeletionoftheotherobjectsclauseoftheMemorandumOfAssociation:
PursuanttotheprovisionsofSection4,13andallotherapplicableprovisions,ifany,oftheCompaniesAct,2013,(includinganyamendmentthereto
orreenactmentthereof),andsubjecttonecessaryapproval(s)ifany,fromthecompetentauthorities,theOtherObjectsClauseofthe
MemorandumofAssociationoftheCompanyberemovedbycompletelydeletingtheclauseIII(C).
E.AmendmentoftheliabilityclauseoftheMemorandumOfAssociation:
IV.Theliabilityofmembersislimitedandthisliabilityislimitedtotheamountunpaidonsharesheldbythem.
ADVISABLE:IfaCompanygoingtoAlterMemorandumofAssociationthenitisadvisabletoadoptnewsetsofArticleofAssociationalsounder
CompaniesAct,2013.
F.ADOPTIONOFNEWSETOFARTICLESOFASSOCIATION
PursuanttotheprovisionsofSection14andotherapplicableprovisions,ifany,oftheCompaniesAct,2013,(includinganyamendmenttheretoorre
enactmentthereof),theArticlesofAssociationoftheCompanyshouldbealteredherebyreplacingalltheexistingregulationswiththenew
regulations.
Thecontentofthisarticleisintendedtoprovideageneralguidetothesubjectmatter.Specialistadviceshouldbesoughtaboutyourspecific
circumstances.
(AuthorCSDiveshGoyal,ACSisaCompanySecretaryinPracticefromDelhiandcanbecontactedatcsdiveshgoyal@gmail.com)
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9ResponsestoAdoptionOfMOA&AOAunderCompaniesAct,2013
1. bharatsays:
06/26/2015at2:03PM
ThankYou
2. Antonysays:
06/03/2015at3:28PM
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AdoptionOfMOA&AOAunderCompaniesAct,2013

WEaredoingsolarpowerprojects.Wearegoingtofinanceforthebuyer.Insuchcasesisitpossibletoinsertfinanceandcapitalintheobject
ofMemorandam.
pleaseadvice..
3. bhawnasays:
05/19/2015at12:10PM
Sir,
pleasetellthesourceinwhichitiswrittenthatwecanonlyadd50objcetsintheotherobject,ifwehavetoamendtheobjectclause.
4. AshishKumarsays:
04/22/2015at11:13PM
Hi,
IamadirectorinaPrivateLimitedCompanyincorporatedundertheCompaniesAct,1956onNovember25,2013.TheMOAandAOAare
basedonthepreviouslaw.
Cansomeonepleaseguidewhatistheproceduretochange/amendtheAOAandMOAaspertheCompaniesAct,2013andwhatarethe
necessarycompliancestobecompleted.
Anearlyreplywillbemuchappreciated.
Regards
Ashish
5. SrikanthReddysays:
03/09/2015at1:18PM
Sir,
IfacompanyincorporatedunderCompaniesAct,2013proposestocommenceanactivitywhichismentionedinMatterswhicharenecessary
forfurtheranceoftheobjectsspecifiedinClauseIII(a)arethenwhatistheprocedureitrequirestobefollowed?.Pleaseinform.
6. AmruthReddysays:
02/14/2015at9:51AM
Thankyou
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7. B.ChackrapaniWarriersays:
11/12/2014at10:22AM
Thanksfortheinformation.
8. P.VithalKumarsays:
11/11/2014at10:46AM
Sir,ROCisallowingonlylimitednumberofObjectsinMainObjects(maximumthree).Inthatcase,itmaynotbepossibletoadoptallthe
otherobjects.Plssadvise.
9. AKSwaminathansays:
11/11/2014at10:08AM
Thankyouverymuchforthearticleishighlyinformativeanduseful.

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