Change Objects of MOA Under Section 13

Why the Objects Clause Sometimes Needs Alteration

The objects clause of the Memorandum of Association defines the activities a company can lawfully pursue. It is drafted at the time of incorporation based on the founder business plan. As the business evolves, pivots or adds new lines, the objects clause may no longer match what the company is actually doing. Operating outside the objects clause is ultra vires under the Companies Act 2013. Alteration of the objects clause through a special resolution and MGT 14 filing aligns the MOA with current activity, removing legal risk and clearing the path for vendor and lender due diligence.

When Founders Alter the Objects Clause

From inside a CS practice, alteration of objects is one of the more common post incorporation changes for growing businesses. The original objects clause is usually drafted based on the founder business plan at the time of incorporation. Two or three years in, the business has often pivoted, added a new product line, started exporting, or expanded into adjacent services that the original objects did not contemplate. An alteration through MGT 14 brings the MOA in line with what the business is actually doing.

The cost of not altering is real. Operating outside the objects clause is technically ultra vires. Vendors, customers and lenders may flag the mismatch during due diligence. Insurance claims can be contested. The cleaner path is to alter the objects as soon as the business is committed to the new activity.

Step by Step Process to Alter Objects Clause

1. Identify the New ActivityWe draft the additional or revised object in the language used by the Companies (Incorporation) Rules 2014. The drafting is precise enough to cover the intended activity without being so broad as to attract scrutiny.
2. Board ResolutionThe board approves the alteration and authorises calling of an EGM. Where the new activity requires sectoral licensing, the relevant approvals are noted.
3. Notice of EGMTwenty one clear days notice is issued with an explanatory statement under section 102 setting out the reason for the alteration and the proposed new clause.
4. Special ResolutionThe shareholders pass a special resolution authorising the alteration of the objects clause. The resolution is signed and entered into the minutes book.
5. File MGT 14 With the ROCWithin thirty days of the resolution, form MGT 14 is filed with the altered MOA and the special resolution.
6. ROC ApprovalThe ROC reviews the altered objects and approves the filing. The alteration takes effect on the date of approval. The MCA portal reflects the updated MOA.

Frequently Asked Questions