Under the Companies Act, 2013, the object clause of the Memorandum of Association (MOA) plays a critical role in the formation and operation of a company. It sets out the main and other objectives of the company and outlines the scope of its activities. The object clause must be drafted with care, as it determines the company’s operations and the authority of its directors.
The object clause of the MOA under the Companies Act, 2013 is divided into two parts:
1. Main Object Clause: The main object clause specifies the primary business activities that the company intends to undertake. The company must restrict its activities to those mentioned in the main object clause, and any activity beyond the scope of the main object clause requires the approval of the shareholders.
2. Other Object Clause: The other object clause includes incidental or ancillary activities that the company may engage in to further its main objects. These activities must be related to the main object clause.
It’s important to note that the Companies Act, 2013 requires the MOA to be concise and precise, and the objects must not be vague or indefinite. The company must also ensure that the object clause complies with all legal requirements and restrictions related to its industry or sector.