## Alteration of Object Clause

### Special Rule for Public-Issue Companies

A company that has raised money from the public through a prospectus AND still has unutilized funds can change its objects only by passing a Special Resolution via postal ballot.

### Contents of the Notice for Alteration

The notice for altering objects must include:

1. Financial Details: Total funds received, utilized, and unutilized from the prospectus.

2. Change Details: Proposed alteration, justification, and amount allocated for new objectives.

3. Impact Assessment: Estimated financial effect on earnings and cash flow.

4. Additional Information: Any other details for informed decision-making and the location where the resolution notice can be obtained.

### Publication in Newspapers

The details of the resolution shall be published in 2 newspapers:

One English newspaper, AND
One vernacular language newspaper of the place where R.O. is located.

It must also be placed on the company's website (if any) explaining the justification.

### Exit Opportunity for Dissenting Shareholders

Dissenting shareholders shall be given an opportunity to exit as per regulations set by SEBI.

### ROC Registration and Certification

1. The ROC shall register the alteration and certify the registration within 30 days from the date of filing the SR.

2. The alteration will NOT be effective until registered with the ROC.

### Noting Alteration in Every Copy

Every copy of the MOA/AOA shall reflect any alterations made.

Penalty: If any copy is issued without noting the alteration, the company and its officers are liable for a penalty of ₹1,000 per copy issued.

Worked example

### Example 1

Example: XYZ Ltd. raised ₹100 crore through an IPO. ₹40 crore remains unutilized. The Board now wants to use it for an unrelated venture. What is the procedure? Answer: (1) Pass SR via postal ballot; (2) Notice must include financial details of utilized/unutilized funds, justification, impact assessment; (3) Publish in English + vernacular newspaper + on website; (4) Give exit opportunity to dissenting shareholders per SEBI norms; (5) File with ROC; (6) ROC registers and certifies within 30 days — only then alteration is effective.

⚠️ Common exam mistakes

Treating object-clause alteration like any ordinary alteration — for public-money companies, postal ballot is mandatory.
Forgetting newspaper publication in BOTH English and vernacular.
Forgetting the dissenter exit opportunity under SEBI norms.
Treating the alteration as effective immediately on SR — it is effective only upon ROC registration.

Reference: Section 13 — Companies Act, 2013

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Alteration of Object Clause in MOA

Worked example

⚠️ Common exam mistakes