Doubt in Co.Law (Alteration of Object clause)

 I noticed some contradiction in answer in Institute's practice manual and a Reference book of Munish Bhandari for Law :

Question :

The management of Ambitious Properties Ltd has decied to take up the business of food processing activity because of the downward trend in real estate business.There is No provisions in object clause of Memorandum of Association to enable the company to carry on such business.State with reasons whther its object clause can be amended. 

Answer :

As per ICAI Practice Manual - " No, as per Section 17 of Companies Act 1956"

As per Munish Bhandari Book " Alteration is permissible if it enable the company to carry on business which under existing circumstances may conveniently or advantageously be combined with the business of the company "

Pls clarify.

Replies (5)

as per my knowledge concerned ,

 

company to carry on business which under existing circumstances may conveniently or advantageously be combined with the business of the company

 

but here in the case of Ambitious Properties Ltd  the buisiness of food processing  activity cannot be conveniently or advantageously be combined with the buisiness of real estate

 

as food processing is completely different from real estate

 

as the same case in punjab distilling company

 

here also  buisiness of distilling cannot conveniently or advantageously combined with the business of film

 

hope you clarified

the above discussion is only as part of my knowledge !

Still confusion is there, I consulted in some other forums also.. some says  the company can do so, and some says compnay cannot do so..


Anyways, thanks for your valuable reply ! :)

a company which was formed for the purpose of gererating power was allowed to carry on cold storage buisiness


because gererating power and cold storage are very nearer to each other

 

but real estate buisiness and food processing activity is completely different from each other

 

so in my opinion icai is correct


and hope you might clarified with the above discussion

 

it depends on facts and circumstances of each case . it is always possible to carry on both the business if they satisfy the conditions mentioned in section 17. 

i agree with sidharth

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