Question

The object clause of the Memorandum of Association of a public company (Equity capital via
public issue is Rs. 100 crores divided into shares of Rs. 10 each) empowers the company to
carry on oil & gas business and any other business that is allied/ancillary to it. The company
wants to alter its Memorandum so as to include the cinema business in its object clause. The
company is not doing well in its core business and on market study has explored opportunity
in cinema business. Advise the company.

Answer 1

Procedure for Alteration of Object clause of Memorandum of Association under Companies Act,2013.

Explanation:

As per Section 13 of Companies Act,2013,A company can alter its Object clause stated in its Memorandum of Association as follows:

1) Holding/Calling a Board meeting within not less than 7 days for:

          • Stating the agenda of the meeting i.e alteration in object clause.

          • To Approve the notice of Extraordinary General meeting

          • Authorization of issuance of notice to the members.

2) Issuing a notice of EOGM to all members,Directors and Auditors atleast 21 clear days prior to the meeting.

3) Holding the meeting(EOGM) on the due date and passing the Special Resolution.

4) Filling the relevant forms(MGT-14) within 30 days of passing the resolution.

In the given case,the company can add "Cinema business" as one of its objectives in the Object clause of Memorandum of Association by following the procedures stated above.