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Empowering Change: Transforming Company Objectives with Ease
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When particularly talking about the company, the business objectives are defined in the main object clause of MoA.
These objectives define the scope of the company’s principal business activities within which it may operate.
A company cannot undertake those activities, which are not prescribed in its object clause.
Addition of new activities is the main reason to change business objective. The change is also backed by the vertical or horizontal expansion of the activities, which were not mentioned while company incorporation. Therefore, prior to undertaking such activities, the company must undertake the change of business activity.
Many times a company is a takeover by another company just for the sake of its market value built. The objects of the company acquired must be updated as required for leading the business further. The object can be changed either before or after the takeover depending on the requirement.
The company’s memorandum is accessible to any person, who may refer it before binding into contractual relation. Hence, one must make sure that the objects are updated with the Ministry even by deleting those activities the company has abandoned to undertake.
The Government policies may change anytime, which essentially affects the company and its operations. If the activities undertaken by a company is declared to be prohibited or are banned, such an object must be removed from MoA or changed completely, as required.
One should make sure that the new object also covers all the ancillary activities to the main object. Also, the name should represent the object correctly even after the
change of the object, else the RoC may direct name change.
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