Writing Object Clause for New Company Registration

For any new company registration, there has to be objective for starting new business. The object clause is the third clause of the Memorandum of Association (MOA). MOA represents the charter of the new company registration. It is the legal document prepared during the new company registration to define its relationship with the shareholders and it specifies the objectives for which the company is formed.

The object clause specifies the business activity that the company is doing. It enables others to understand the scope of the work which new company will undertake. While dealing with the company one should know the limit of the business activity that the business can indulge in. The company can undertake only those activities that are mentioned in the MOA and AOA. All the activities beyond those mentioned in the MOA and AOA will be deemed as void.

mentioning object clause properly is absolute warrant at the time of private limited company registration. The object clause in MOA is divided into two parts:

• The main object will cover all the details concerning the business activities which the company is going to carry out. It must include matters given below:
• A brief about all the activities carried to be carried by new company registration.
• To cover business activities in more generic terms.
• To include supporting activities for the main business activities
• One should include related activities that can help to diversify the business in the future.
• All those activities that are necessary to attain the main object of the company are covered under this. It may include purchase/sale of building/land, merge/amalgamate with any other company, etc.

Whenever there is a need to change or amend the business activity, it can be done. A company will require approval from the Ministry of Corporate Affairs to change the business activity. Only after the Ministry’s approval, a company can do a new business activity.

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About Author

CA Nayani Agarwal is a Chartered Accountant who scored All India Rank-24 and have 6 years of experience in the field of Auditing, GST, Income tax and Accounting. She has given consultation to distinct industries over these years.

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