Step 1: Hold a Board Meeting
The Board of Directors must convene a meeting to:
- Approve alteration of the object clause
- Fix date, time & venue for the EGM
- Approve draft of the revised MOA
- Authorize a director/company secretary to issue notices
A Board Resolution is passed accordingly.
✔ Step 2: Issue Notice for Extraordinary General Meeting (EGM)
A notice of the EGM must be sent to:
- All shareholders
- Directors
- Auditors
The notice must include:
- Explanatory statement
- Draft altered MOA
- Reason for changing object clause
The notice must be sent at least 21 clear days before the EGM unless shorter notice is consented.
✔ Step 3: Conduct the EGM and Pass a Special Resolution
At the EGM, shareholders vote on the proposed alteration.
A Special Resolution, requiring 75% majority, must be passed to approve the new object clause.
Minutes of the meeting should be recorded.
✔ Step 4: File MGT-14 with MCA
Within 30 days of passing the Special Resolution, the company must file Form MGT-14 on the MCA portal.
Upload:
- Certified copy of Special Resolution
- Notice of EGM
- Explanatory statement
- Altered MOA
- Optional attachments
This legally informs the government about the change.
✔ Step 5: Update the MOA with the New Object Clause
Once MGT-14 is successfully approved, the company’s MOA must be updated to include the new object clause.
This updated MOA becomes the official governing document.
✔ Step 6: Notify Stakeholders & Update Internal Records
After approval, the company should:
- Update internal registers
- Inform bankers, investors, and stakeholders if relevant
- Modify business registrations (if required)
- Update website and legal documents
This ensures full transparency in company operations.
Why the Change in Object Clause Is Important
- Ensures legal compliance under Companies Act
- Enables business expansion
- Prevents penalties for activities outside MOA
- Strengthens corporate governance
- Helps attract investors with clear vision
Timeline for the Process
| Step | Time Required |
|---|---|
| Board Meeting | 1 day |
| EGM Notice | 21 days (or shorter notice) |
| EGM & Resolution | 1 day |
| Filing MGT-14 | Within 30 days |
| MCA Approval | 3–7 working days |
Penalties for Non-Compliance
If a company performs activities outside its object clause without alteration:
- MCA can impose penalties
- Contracts may be considered ultra vires (beyond authority)
- Directors may be held liable
Proper alteration is legally mandatory.
Frequently Asked Questions (FAQ)
1. Is MCA approval mandatory for changing the object clause?
Yes. The change becomes valid only after MCA validates the MGT-14 filing.
2. Do all shareholders need to approve the change?
A special resolution (75% approval) is required.
3. Can a Private Limited Company add multiple new business activities?
Yes, multiple activities can be added in the object clause.
4. What is the government fee for MGT-14?
Fees vary based on the company’s authorized capital.
5. Can a company change its object clause anytime?
Yes, provided the prescribed procedure is followed.
Conclusion
Changing the object clause is essential for companies looking to diversify, grow, or restructure their business operations. Following the correct procedure ensures compliance and smooth approval.
The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.
All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.