The Company's object clause is the third clause in any Company's MOA specifying the objects, i.e. the business / purpose for which the company is registered and any other matter absolutely required for its accordance with the provisions. Any act carried out by a company which goes beyond the objects and powers referred to in the Companies Act 2013 shall be considered to be the subject of the ultra vires clause of one clause of the utmost importance.After registration of the Company, subscribers decide on the objects they want to follow after incorporation, but if they wish to amend the Company's objects after incorporation, they may do so in compliance with the legal procedure specified under section 13 of the Company Act , 2013 read with Company Law (Incorporation) 2014, which may be further discussed.It is primarily important to remember, for clarification, that the Company's object clause can be divided into:

• Objects to be undertaken by the Organization upon incorporation (i.e. principal objects);
• Matters needed for the furtherance of the objects (i.e. ancillary objects).

Main object of the company

The business objects clause mentioned in the company’s Memorandum of association (MOA) Objects decides the purpose and scope of business activities for which the company operates. The Memorandum of association (MOA) has several rules, and one of them is the business object clause. During the company registration process, every company decides the objects for which the business is formed. But before going forward with a private limited company's registration process, it is important to know the company / Startup’s exact business and its limits.Consequently, it helps to specify such business formation activity in the Memorandum of association (MOA) objects of the company.

The need for Object Clause

Including business objects in the company, activity enables others to understand the scope of your business. When negotiating with the individual company should know if, according to MOA, the business will engage in the activities referred to in the contract. This can be verified from the company's MCA’s business object clause. I The MOA & AOA is the basic information for the process of company incorporation. A business or a company cannot conduct activities not specified in objects of the MOA. Thus, if a company exists in the MOA beyond the above activity then it will be void ab initio. If there are changes to be made during the process of running the company in the Object Change of MOA, stockholder approval and ROC approval will be required.

Contents of Object Clause

The Object clause of MOA is having into 2 parts: the “Main object” & the “Matters which are necessary for the processing of the main objects”. Specifically

Main Object

Perhaps a company's promoters have some ideas. The prime objective is to list certain ideas in legal language. It will cover specifics of the business operations the company has or can not conduct.If the company diversifies, a new business line needs to be expanded to the main object clause. Therefore the need arises for the alteration in the Company's object.

Matters which required for the processing of the main objects:

It is important to cover points which are necessary to accomplish the company's main objects. It may involve purchasing, selling a land / building, applying / contracting for rights to intellectual property, technical assistance, merging / amalgamating with other individual etc. Government has given the format; the clause can be added or omitted, as necessary.

What to include

The main object must include the following matters

• A brief of all the activities the company undertakes through. It may include all the fields of manufacturing or service or trade.
• To be more descriptive in covering business activities.
• Include activities supporting the core sector.
• Associated activities should also be included which will help to diversify the company in the future.

Therefore the object clause needs to be written covering major business areas. It has to be written in such a manner as to avoid future revisions.

Change in activity

It can be done if there is a need to change or modify the business activity. A business will need the Ministry of Corporate Affairs approval to modify the business activity. A company may only do a new business activity after approval by the Ministry.

Conclusion

The object clause must be written in detail so that it includes all the activity and no updates are required. As an integral part of MOA, it is recommended that some professional expertise be used to draught the clause.