Company’s object represents the nature of business which the company is doing. A company can decide to change an object for various reasons. The reasons for change in object of a company can be diversification of business or addition of new products for trading or manufacturing etc. To understand the procedure for change in object clause of the company first a person needs to understand clauses in the Memorandum of Association.
Memorandum of Association of a Company has five important clauses, a) Name Clause b) Registered Office Clause c) Object Clause d) Liability Clause e) Share Capital Clause. Change in object clause of company means alteration of Object Clause of Memorandum of Association. Section 13 of Companies Act, 2013 deals with the alteration of Object Clause of Memorandum of Association. To change any clause of Memorandum of Association, by passing a Special Resolution the approval of its Shareholders is required.
Therefore, the company needs to call an Extraordinary General Meeting to give effect to alteration of its Object Clause.