A Public Limited, listed company wants to start a new business alongwith its existing business. The proposed new business is included in the other objects clause of the Memorandum of Association of the Company. Can the Company obtain inprincipal approval from the Board of Directors and obtain the approval of Shareholders for starting new business to through postal ballot.
Please advise.
The Company will have to bring other objects into one of its main objects. Only then the Company will be able to carry on that business.
Also, the Company will have to do the same through Postal Ballot under Section 192A of the Companies ACt, 1956 and Companies (Passing of Resolutions by Postal Ballot) Rules, 2011.
Also, for postal ballot procedure, kindly refer to the link mentioned below:
/articles/postal-ballot-procedure-u-s-192a-of-the-companies-act-11609.asp#.UL86peQ3tiU
Comapny has to pass Special Resolution under section 149(2A) to start the activity mentioned in the other objects and file form 20A.
No need to alter the MOA and include it into the main object of the Company.
The Company may pass the said special resolution through postal ballot. However, if the listed company wants to alter its object clause of MOA, then it has to pass special resolution through postal ballot.
With all due respect Sir. While going through one of your articles on section 149(2A), it is stated that shift of the object clause is necessary.
Also that i had faced a similar problem and the then ROC had advised to shift the said objects to main activity or ancilary or incidential objects.
Dear Riddhi,
I have seen some cases where companies have adopted other objects u/s 149(2A) without altering their MOA but on the other hand they used * as footnote in MOA under the Clause and wrote : This Clause has been adopted as a main object under section 149(2A) form date ....
Regards,
CS Amit Arora
CAclubindia
