Neeta (Finance) (345 Points)
23 April 2010hello all !
Please confirm : Procedure for adding a new business in the other object of a private limited company.
1.Board meeting to decide on EGM date and agenda.
2.EGM to effect the addition of a new business in the other object of MOA.
3.File form 23 with ROC.
Plz provide a draft resolution for the same , also provide if any other requirement to start the business so mentioned.
thanks and regards
neeta
manikandan.J
(Accounts Manager)
(363 Points)
Replied 23 April 2010
hi
you also prepare the EGM, Agenda , Memorandum of association and Articles of association and Particulars of appointment of managing director, directors, manager and secretary and the changes among them or consent of candidate to act as a managing director or director or manager or secretary of a company and/ or undertaking to take and pay for qualification shares Form 32 , Form for filing an application with Registrar of Companies Form 61, Return of alteration in the charter, statute or memorandum and articles of association, address of the registered or principal office and directors and secretary of a foreign company Form 49, Application or declaration for incorporation of a company Form 1,Application or declaration for incorporation of a company Form 1A, Registration of resolution(s) and agreement(s) Form 23, Return of appointment of managing director or whole time director or manager Form 25C
you want more information Click below link
https://www.mca.gov.in/MCA21/dca/downloadeforms/Download_eForm_choose.html
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 23 April 2010
SAMPLE SPECIAL RESOLUTION FOR INSERTION OF NEW CLAUSE
“RESOLVED THAT pursuant to the provisions of section 149(2A) and other applicable provisions, if any, of the Companies Act, 1956, the approval of the members of the company be and is hereby given for commencing and undertaking the new business as stated in the new inserted Clause 8 of the Objects Clause IV of the Memorandum of Association of the company upon the said Clause becoming effective.
FURTHER RESOLVED THAT the Board of directors of the company be and is hereby authorised to do all such acts, deeds, matter and things as they may consider appropriate to commence new business activities for and on behalf of the company.”
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 23 April 2010
Your procedure is quite fine and have to file from 23 for registering special resolution u/s 149(2A). Also check my old CAClub article for reference.
Formalities for starting a New Business with Existing Business [Section-149(2A)]
As per Section 13 of the Companies Act, 1956 the Object Clause of a company shall be divided into three categories:—
1. (i) main objects;
(ii) objects incidental or ancillary to the attainment of the main objects; and
2. other objects.
To commence any objects listed in other objects, the company is required to pass special resolution u/s 189 and certain other formalities are required to be complied with.
Carry out new business as stated in the object clause of the Memorandum by a company existing prior to 15-10-1965
Prior to 15-10-1965, companies were not required to divide their objects into three categories and all the objects were contained in one consolidated clauses in the Memorandum.
Formalities for companies incorporated before 15-10-1965 to commence new business
Such company has to comply with the following requirements:—
(i) approval of such new business by a special resolution passed in the general meeting;
(ii) there has been filed e-Form 20A together with e-Form 23 and an stamped copy of the e-Form 20A. Simultaneously filed with the Registrar a duly verified declaration by any one of the directors or the secretary or where the company has not appointed a secretary, a secretary in whole time practice, in the prescribed e-Form 20A and 23; and
(iii) pay the filing fees on e-Form 20A and 23 as per Schedule X of the Act.
Carry out new business as stated in the object clause of the memorandum by a company incorporated after 15-10-1965 carrying out main objects
A public company cannot start its business or exercise borrowing powers unless it obtains the certificate to commence business from the Registrar. A private company can, however, commence its business as soon as it is registered.
After obtaining certificate for commencement of business from the Registrar, if required, the company may commence any business activities as stated in the main object clause of the Memorandum of Association of the company, without complying with any other formalities.
STARTING NEW BUSINESS ACTIVITIES COVERED UNDER THE OTHER OBJECT CLAUSES
An existing public limited company which proposes to take up a new business, which is covered in the "other objects" of the Memorandum can do so only after the proposal is approved by the members by a special resolution.
The said business will be considered as a new business, in the case of a company existing prior to 15-10-1965 only when the new business is not germane to the business, which the company was carrying on at that time.
PROCEDURE FOR STARTING NEW BUSINESS ACTIVITIES COVERED UNDER THE OTHER OBJECT CLAUSES
For the purpose of obtaining approval by way of special resolution the following steps have to be taken by the company:—
(i) hold a Board meeting to consider and approving the matter/proposal for carrying specified business activities.
(ii) The Board shall also fix the date, time and place for holding a general meeting, approve the notice of the general meeting and explanatory statement and authorise to any director or secretary for issuance of notice to the members as per the requirement of the Act.
(iii) the proposal to start the new business will have to be approved by the members by way of a special resolution.
Where the special resolution could not be passed at the general meeting, the company is required to be approved the proposal by passing an ordinary resolution and shall require to make an application to the Central Government requesting for according permission to the commencement of new business.
In the absense of any Form for such purposes, the company may apply on simple paper stating with full ground and justification along with the fees. After receipt of the approval of the Government, the company is required to file the declaration in e-Form 20A with ROC
(iv) File e-Form 23 as desired by section 192 with the certified copy of the special resolution with explanatory statement.
(v) File a declaration in e-Form 20A electronically and a stamped copy be submitted simultaneously to the Registrar of Companies on the stamp paper to the effect that the provisions of section 149(2A) sub-clause (i) have been complied with.
Section 149 does not apply to a private company.
Inclusion of a new business clause in the Memorandum of Association
Where the proposed new business activities are not covered by any of the objects included in the Memorandum, the company has to first amend its object clause of the Memorandum & include the proposed object in its Main Objects or Other Objects of the company as it consider appropriate.
In the above case company is required to comply with sections 17 and 18 of the Companies Act, 1956 for amendment in the Object Clause of the Memorandum.
PROCEDURE TO AMEND OBJECT CLAUSE OF THE MEMORANDUM:—
(i) Hold a Board meeting to consider and approving the matter/proposal. The Board shall finalised the objects proposed for inclusion in the Object Clause of Memorandum
(ii) The board shall also fix the date, time and place for holding a general meeting, approve the notice of the general meeting and explanatory statement and authorise to any director or secretary for issuance of notice to the members as per the requirement of the Act;
(iii) The proposal to amend the object clause of the Memorandum will have to be approved by the members by way of a special resolution.
(iv) File e-Form 23 within 30 days of passing special resolution containing the certified copy of the special resolution with explanatory statement and with the fees as per Schedule X of the Act, to the Registrar of Companies;
(v) File a declaration in e-Form 20A and a stamped copy be simultaneously submitted to the Registrar of Companies on the stamp paper to the effect that the provisions of section 149(2A), sub-clause (i) have been complied with;
(vi) It is absolutely necessary to get the certificate of registration of the special resolution from the Registrar of Companies pursuant to section 18(1) of the Act within one month of filing.
Certificate for confirmation is a conclusive evidence of compliance
The certificate issued by the Registrar of Companies shall be the conclusive evidence that all the requirements regarding the alteration in the Memorandum of Association have been complied with and the Memorandum of Association so altered shall be the Memorandum of the company.
Neeta
(Finance)
(345 Points)
Replied 23 April 2010
thnku sir for the detailed procedure, it wud help in case of a public company.
but i think u missed the word private in my query coz section 149 applies to public company only. Mine is a purely pvt company.
So , as per me ,der isn't any need to file form20A. Also tell me should the resolution specify on the approval to start the business. IN CASE OF PRIVATE COMPANY.
plz confirm the resolution: ( THE THING IS TO ADD NEW CLAUSE IN THE OTHER OBJECT )
“RESOLVED THAT pursuant to the provisions of Section 17 and all other applicable provisions, if any, of the Companies Act, 1956,the other object clause of the Memorandum of Association of the Company be altered by adding the following new clauses after the existing clause no.9 thereof:
10. to carry on business .................... etc" ..
“RESOLVED FURTHER that Mr. XYZ Director be and is hereby authorized to file the necessary documents with the Registrar of Companies (including Form 23 ) and comply with all other legal requirements in this regard
tell me , is the above resolution ok for simply adding a new business in the other object clause. Hope this will also work to start the business even coz its a private company. thanks and regards
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 23 April 2010
Dear Neeta you are right as usual and I missed that the query is about a private Company as usual. Anyways check out this resolution:
“RESOLVED THAT pursuant to the provisions of Section 17 and all other applicable provisions, if any, of the Companies Act, 1956, the other object clause of the Memorandum of Association of the Company be altered by adding the following new clauses after the existing clause no. 9 thereof:
10. to carry on business .................... etc" ..
“RESOLVED FURTHER THAT the consent of the board of directors of the company be and is hereby accorded for commencing and undertaking the new business activity as covered under the above objects Clause No. ______ of the memorandum of association of the company and any director of the company be and is hereby authorized to take all such effective steps to implement this decision as they may consider appropriate in the interest of the company and to do all such acts, deeds and things from time to time for and on behalf of the company.”
Neeta
(Finance)
(345 Points)
Replied 24 April 2010
this sounds perfect , thanks a lot sir.
again one more thing, the resolution provided by u is that to be passed in the EGM , so i think i should alter the second resolution of 'RESOLVED FURTHER THAT the consent of the Board of Directros ...." and should make it " CONSENT OF THE COMPANY .."
also , tell me if any wrong is der if i don't include this resolution of consent to commence ... since its a pvt company...
seeks ur confirmation plz..
Neeta
(Finance)
(345 Points)
Replied 24 April 2010
doubts , doubts and doubts . sir , here the company's main business is that of garments and the new addition to the other object is that of solar batteries.
so , plz tell me any more compliances other than sec 17 and 192 ?
also , in form 23 ,point no 7 : they say " in case of alteration in other object , whether there is any change in the industrial activity of the company "??
i don't understand the correct intention here , i think dey mean whether der is any change in the main business . so my answer should be 'NO' since here it is addition to the other objects only .
plz confirm ..
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 24 April 2010
| Originally posted by : Neeta | ||
 |
this sounds perfect , thanks a lot sir. again one more thing, the resolution provided by u is that to be passed in the EGM , so i think i should alter the second resolution of 'RESOLVED FURTHER THAT the consent of the Board of Directros ...." and should make it " CONSENT OF THE COMPANY .." also , tell me if any wrong is der if i don't include this resolution of consent to commence ... since its a pvt company... seeks ur confirmation plz.. |
 |
I don't understand what r u talking about. My second resolution is a board resolution...so i used the words the consent of the Board of Directros ...
When we pass GM resolution we use the words the consent of the company/member...
If you don't use comence business phrase than you can't start a new business and resolution would be treated as resolution for alteration of MOA. Yes it is for private company.
Neeta
(Finance)
(345 Points)
Replied 24 April 2010
i mean , in BM the first resolution is that given by u, ie, "resolved that pursuant to section 17 .......... " this resolution also need to be included one thing and that is >> subject to the approval of the members of the company in GM "
Now in the GM , this same recommended res is passed and the only difference would be that the sentence >> subject to the approval of the members of the company " wou;d not be there.(this wud be deleted)
Next,,i agree , the resolution for commencing business is required. but my next doubt was on the authority >>is it the GM or BOD
let me explain,, if i include the resolution of commencing business >> being the consent of BOD << what if the proposed res. no1 doesn't get pass in the GM . IN OTHER WORDS , HOW CAN THE BOARD PASS A RESOLUTION TO COMMENCE BUSINESS BEFORE THE NEW CLAUSE OF BUSINESS IS APPROVED BY EGM.
HOPES , I'M CLEAR !!! plz revert..asap
RAMESH KUMAR SONTHALIA
(PROPRIETOR)
(24 Points)
Replied 23 June 2010
procedure for changing main object of a company along with format of notice for B/M EGM EXPLANATORY NOTE REQUIRED U/S 173 ETC
Sheela Nair
(n.a)
(57 Points)
Replied 02 September 2010
Can we make changes in the board resolution because of typographical error or non-addition of contents once passed
Neha Gupta
(PCS)
(377 Points)
Replied 02 September 2010
Ankur Sir one more thing I would like to ask, as per Neeta ji the company is entering into one new business of SOLER BATTRIES which is absolutely different from its earlier business of Garments, Is it necessary all the time that company change its name as well, so that it reflects its purpose more clear like words "Enterprises" etc. Or other multy tasking words should be added in the name of Company.
And we have to follow the procedure of “Change name also” along with the procedure of “Change main Objects”
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 03 September 2010
Here is the Step by Step procedure:-
First of all hold Board Meeting and discuss about the new project and inclusion new clause in the Object Clause of the MOA and requirement of calling General Meeting and passing Special Resolution and accordingly call an Extraordinary General Meeting.
Hold Extraordinary General Meeting and pass the Special Resolution:-
“RESOLVED THAT pursuant to the provisions of Section 17 and other applicable provisions of the Companies Act, 1956, if any, the Object Clause of the Memorandum of Association of the Company be and is hereby altered by insertion / addition of new clause i.e. clause no. 10 after the clause no. 9 in the other object as under:-
10. ………………………………..”
“RESOLVED FURTHER THAT Shri……………., Director of the Company be and is hereby authorised to do all such acts, deeds and things as may be necessary, expedient and desirable to give effect to the above resolution.”
Then file form 23 attaching the altered copy of the MOA.
Then hold another Board Meeting and pass following resolution:-
The Board discuss the matter and approve the same. Thereafter following resolution was passed:-
“RESOLVED THAT the business activity as mentioned in Clause no. 10 of the Other Object in the Memorandum of Association of the Company be and is hereby started.”
“RESOLVED FURTHER THAT Shri……….. and Shri……….., Directors of the Company be and are hereby jointly / severally authorised to do all such acts, deeds and things as may be necessary, expedient and desirable to give effect to the above resolution.”
Then Start new activity.
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