Change Objective/Activity

Change Objective/Activity: complete guide

Introduction

When a company is incorporated, its Memorandum of Association sets out the objects for which it is formed. This objects clause describes what the company is allowed to do: the business it will carry on, and the activities it can undertake to support that business. As a company grows, its business often changes. A software services company may move into products, a trading company may start manufacturing, a consultancy may add training or staffing, or a company may enter a completely new sector. When the new activity is not covered by the existing objects, the company must alter its objects clause under the Companies Act, 2013 before it starts that activity.

Changing the objects is a formal process. It requires a board resolution, a special resolution of the shareholders, the filing of that resolution with the Registrar of Companies in Form MGT-14 within 30 days, and the registration of the altered Memorandum. The Registrar then issues a certificate confirming the alteration. In some cases, extra steps apply. A company that has raised money from the public through a prospectus and still has unused funds must follow additional requirements before changing the objects for which those funds were raised. A company moving into a regulated activity, such as financial services, insurance or certain kinds of investment business, may need approval from the relevant regulator.

Carrying on an activity that is outside the company's objects creates real risk. Contracts entered into for that activity may be challenged, banks and licensing authorities may refuse to process applications, tenders may be rejected, and investors may raise concerns during due diligence. Updating the objects in time avoids these problems and keeps your public record in line with what the company actually does.

Our team reviews your existing Memorandum, drafts the new objects in clear and appropriate language, prepares the resolutions and forms, files them on the MCA portal, and helps you update related registrations. This page explains who needs this service, the legal requirements, the step-by-step process, documents, timelines, our fee and what happens after the alteration.

Who Needs It

You may need to change your company's objects if:

• You are starting a new line of business that is not covered by your current main objects, such as adding manufacturing to a trading company or adding consulting to a technology company.
• You are dropping an activity and want the Memorandum to reflect your current business clearly.
• A bank, lender or licensing authority has asked you to show that the Memorandum covers the activity for which you are seeking a loan, licence or registration.
• You are applying for a tender or empanelment, and the buyer requires your objects to cover the work being tendered.
• You are raising funds, and investors have asked you to align the objects with your business plan as part of due diligence.
• Your company was incorporated with very narrow objects, and you want a broader but still clear description that supports future growth.
• You plan to enter a regulated sector, where the regulator expects the Memorandum to be limited to, or include, specific activities.
• Your company was formed under the old Companies Act with separate main, incidental and other objects, and you want to update the Memorandum to the current format.

The service applies to private limited companies, public limited companies and one person companies. Section 8 companies can also alter their objects, but this requires prior approval of the Central Government and follows a separate process, which we can discuss with you. LLPs record their business in the LLP agreement and follow a different procedure.

Key Benefits

• Legal capacity for the new business. Once the objects are altered, the company can carry on the new activity without the risk of acting outside its powers.
• Smoother dealings with banks and authorities. Lenders, licensing bodies and tax authorities often check the objects clause. An updated clause avoids queries and refusals.
• Eligibility for tenders and contracts. Many tenders and corporate clients check that the vendor's objects cover the work.
• Investor confidence. A clear objects clause that matches the business plan reduces questions during due diligence.
• Accurate public record. The altered Memorandum is available on the MCA records, so anyone checking your company sees an up-to-date description of your business.
• Correct industrial classification. The company's principal business activity code on the MCA records can be updated to match the new business.
• Fewer future alterations. Well-drafted objects that cover your planned activities reduce the need for repeated changes.

Main objects and matters necessary for furtherance. Under the Companies Act, 2013, the objects clause is divided into the objects to be pursued by the company on its incorporation, and matters considered necessary in furtherance of those objects. The first part should clearly describe the company's core business. The second part covers supporting powers such as borrowing, investing surplus funds, entering into partnerships, acquiring property and employing staff. Companies registered under the old Act often have a third part called "other objects", which is no longer part of the current format. When we redraft the clause, we bring it in line with the current structure.

Why drafting matters. Objects that are too narrow may need changing again soon, while objects that are too broad or vague can attract queries from the Registrar and concerns from banks. A list of unrelated activities can also make it harder to obtain certain registrations. Our team drafts objects that describe your actual and planned business clearly, without unnecessary breadth.

Eligibility and Legal Requirements

The main provisions are Sections 4 and 13 of the Companies Act, 2013 and the Companies (Incorporation) Rules, 2014. Key requirements include:

• Special resolution. The alteration of the objects clause must be approved by a special resolution of the shareholders at a general meeting, or through postal ballot where required by law.
• Filing with the Registrar. The special resolution must be filed in Form MGT-14 within 30 days of passing, along with the altered Memorandum and the explanatory statement.
• Registrar's certificate. The alteration takes effect once the Registrar registers it and issues a certificate of registration of the alteration.
• Unused public funds. A company that has raised money from the public through a prospectus and still has any of that money unused must pass the special resolution through postal ballot, publish the details in newspapers, and give dissenting shareholders an exit opportunity in line with the regulations of the securities regulator.
• Name consistency. If the company's name refers to a specific activity, the name may need to be changed along with the objects so that it does not mislead.
• Regulatory approval. Certain activities, such as banking, insurance, non-banking financial business, chit funds and some others, need approval or registration from the relevant regulator. The objects clause alone does not authorise these activities.
• Section 8 companies. A Section 8 company needs the prior approval of the Central Government to alter its objects.
• Up-to-date filings. The company should be up to date with its annual filings, as pending defaults can lead to queries or delays.

Government fees and any stamp duty are payable at actual. Company law procedures and forms are updated from time to time, and we check the current requirements at the time of filing.

Step-by-Step Guide

1. Initial consultation. We discuss the new activity, your business plans for the next few years, and whether any activity is being dropped.
2. Review of the existing Memorandum. We review the current objects clause and identify whether the new activity is already covered, partly covered or needs a fresh object.
3. Regulatory check. We check whether the new activity is regulated and whether any licence, registration or approval from a regulator is required before or after the change.
4. Drafting the new objects. We draft the revised objects clause in the current format, covering your main business and the matters necessary for its furtherance.
5. Board meeting. We draft the board resolution approving the proposed alteration and calling a general meeting, along with the notice and explanatory statement.
6. General meeting and special resolution. The shareholders pass the special resolution approving the altered objects clause. Where the company has unused public funds, we guide you on the postal ballot and other additional requirements.
7. Preparing the altered Memorandum. We prepare the full altered Memorandum of Association showing the new objects clause.
8. Filing Form MGT-14. We prepare and file Form MGT-14 with the special resolution, explanatory statement, altered Memorandum and other attachments within 30 days of the resolution.
9. Registrar review and queries. If the Registrar raises a query or asks for changes, we prepare and file the response within the time allowed.
10. Approval and handover. Once the Registrar registers the alteration and issues the certificate, we share it with the approved form and the altered Memorandum, and guide you on updating other registrations.

Documents Checklist

From the company:

• Certificate of incorporation
• Current Memorandum and Articles of Association
• PAN of the company
• Latest audited financial statements and annual return, with proof of filing
• Digital Signature Certificate of a director or company secretary to sign the form
• Description of the new business activity and any activity being dropped

Resolutions and meeting documents:

• Board resolution approving the alteration and calling the general meeting
• Notice of the general meeting with explanatory statement
• Certified copy of the special resolution
• Minutes of the general meeting
• Altered Memorandum of Association

Where applicable:

• Postal ballot documents, newspaper publications and details of exit offer, if the company has unused funds raised from the public
• Approval from the Central Government, for a Section 8 company
• Approval, registration or no-objection from a regulator, if the new activity is regulated
• Documents for a name change, if the name is being changed along with the objects

How Long It Takes

A change of objects for a private company usually takes two to three weeks from the date we receive complete information. A typical timeline is:

• Review and drafting of the new objects: two to three working days, depending on how complex the business is.
• Board meeting and general meeting: depends on the notice period. A general meeting needs clear notice under the Act, unless shorter notice is agreed by the required majority of shareholders.
• Filing Form MGT-14: usually within one to two working days of the meeting.
• Registrar approval: usually one to two weeks, longer if queries are raised.

Where the company has unused public funds, a postal ballot and newspaper publications add time. Where a regulator's approval is needed, the regulator's own timelines apply.

Pricing

Our professional fee for Change Objective/Activity is ₹ 5,999.

This covers:

• Consultation on the new activity and review of the existing Memorandum
• Drafting of the revised objects clause in the current format
• Drafting of board resolution, notice of general meeting, explanatory statement and special resolution
• Preparation of the altered Memorandum of Association
• Preparation and filing of Form MGT-14
• Handling of resubmission requests on the same filing
• Sharing the Registrar's certificate and updated documents

Government fees and stamp duty, where applicable, are payable at actual. Postal ballot processes, exit offers, Section 8 approvals, regulatory licences, a related change of name and updating GST or other registrations are quoted separately if you need them.

Common Mistakes to Avoid

• Starting the new activity before the alteration. Carrying on business outside the objects before the change is registered can expose the company to challenge.
• Missing the 30-day deadline. Form MGT-14 must be filed within 30 days of the special resolution. Late filing attracts additional fees.
• Drafting objects that are too broad. A long list of unrelated activities can attract queries and confuse banks and authorities.
• Drafting objects that are too narrow. Very specific objects may need changing again as the business grows.
• Assuming the objects clause is enough for a regulated activity. Activities such as lending, insurance or deposit-taking need separate approvals, regardless of the objects clause.
• Forgetting the name. A name that refers to an old activity may need to change if it no longer fits the business.
• Not updating the activity code. The principal business activity code and GST business description should be updated to match the new activity.
• Filing an incomplete altered Memorandum. The full altered Memorandum must be attached, not just the changed clause.

What Happens After

After the Registrar registers the alteration, the company can carry on the activities covered by the new objects. You should then:

• Update GST registration where the nature of business, goods or services changes, through an amendment application.
• Obtain any licences or registrations needed for the new activity, such as factory licences, food safety licences, trade licences or regulatory approvals.
• Update your MSME registration and other records to reflect the new activity.
• Share the altered Memorandum with your bank, lenders and key clients, especially if they asked for it.
• Update your website, company profile and tender documents with the new business description.
• Review your accounting and tax setup for the new activity, such as GST rates, HSN or SAC codes and TDS treatment.

Our team can help with GST amendments, new licences and ongoing compliance for the new activity.

FAQs

Do I need to change the objects to start a new business activity?

If the new activity is not covered by the existing objects clause, yes. If it is already covered, no change is needed. We review your Memorandum to confirm.

What approval is needed to change the objects?

A board resolution, a special resolution of shareholders, and filing of Form MGT-14 with the altered Memorandum. The alteration takes effect when the Registrar registers it.

What is the time limit for filing Form MGT-14?

Form MGT-14 must be filed within 30 days of passing the special resolution. Late filing attracts additional fees.

Can I start the new activity before the Registrar approves the change?

It is safer to wait until the alteration is registered. Until then, the activity may be treated as outside the company's objects, which can create legal and practical risks.

Can a Section 8 company change its objects?

Yes, but only with the prior approval of the Central Government. The process is different from that for an ordinary company.

Does changing the objects change my CIN?

The CIN includes a code for the company's industrial activity at the time of incorporation. A change of objects updates the company's activity details on the MCA records, and the authorities may revise the code where applicable. The company itself remains the same.

Do I need to change my company name as well?

Only if the current name refers to an activity that the company will no longer carry on, or would be misleading. In that case, a name change can be done along with the change of objects.

Do I need to update GST after changing the objects?

If the nature of your business, or the goods and services you supply, changes, you should update your GST registration through an amendment application.

Can a company have unrelated objects in its Memorandum?

A company can have more than one main object, but adding unrelated activities without a real plan to carry them on can attract queries and make some registrations harder. It is usually better to keep the objects focused.

What if my company was incorporated under the old Companies Act?

Older Memoranda often have main objects, incidental objects and other objects. The current format has only the objects to be pursued and matters necessary in furtherance. We can update your Memorandum to the current format during the alteration.

Does a change in objects require a regulator's approval?

Only for regulated activities, such as banking, insurance, non-banking financial business and similar sectors. For most business activities, no regulator's approval is needed for the change itself.

Can shareholders who disagree with the change exit the company?

In a company that has raised money from the public and still has unused funds, dissenting shareholders must be given an exit opportunity as per the securities regulator's regulations. For private companies, there is no such statutory exit right, though the shareholders agreement may provide one.

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