The object clause in a company’s Memorandum of Association (MoA) defines its permitted range of activities. To undertake new ventures or modify existing operations, a company may need to amend this clause. In Bangladesh, this process is governed by Sections 12 and 13 of the Companies Act, 1994. Below is a detailed guide on how to proceed with such an amendment.
1. Convene a Board Meeting
Purpose: The board of directors should deliberate on the necessity of amending the object clause.
Resolution: If deemed appropriate, the board passes a resolution to propose the amendment and schedules an Extraordinary General Meeting (EGM) to seek shareholders’ approval.
2. Issue Notice for the EGM
Notice Period: Shareholders must receive a 21-day notice prior to the EGM, unless a shorter notice period is unanimously agreed upon.
Contents of Notice: The notice should include the date, time, venue of the EGM, and details of the proposed amendment.
3. Hold the Extraordinary General Meeting (EGM)
Special Resolution: During the EGM, shareholders vote on the proposed amendment. A special resolution requires at least a three-fourths majority of the votes cast by shareholders present.
4. Seek Court Confirmation
Application to Court: After the special resolution is passed, the company must apply to the court for confirmation of the alteration.
Consideration by Court: The court will consider the interests of the shareholders and creditors before confirming the alteration.
5. File the Resolution with the Registrar
Documentation: Once court confirmation is obtained, the company must file the following with the Registrar of Joint Stock Companies and Firms (RJSC):
– A certified copy of the order of confirmation by the court.
– The amended Memorandum of Association.
– Relevant forms, such as Form XII, Schedule X.
Timeline: These documents should be submitted promptly to ensure compliance.
6. Obtain Approval from RJSC
Review Process: The RJSC will examine the submitted documents to ensure all legal requirements are met.
Approval: Upon satisfactory review, the RJSC will register the amendment, making it legally effective.
7. Update Company Records
Internal Documentation: Ensure that all company records, including statutory books and official communications, reflect the amended object clause.
Stakeholder Communication: Inform relevant stakeholders, such as banks, clients, and regulatory bodies, about the change if necessary.
Important Considerations
Legal Compliance: Ensure that the proposed activities under the new object clause comply with existing laws and regulations in Bangladesh.
Professional Advice: Consult with legal professionals to navigate the complexities of corporate law and ensure all procedural requirements are fulfilled.
By following these steps, a company in Bangladesh can effectively amend its object clause to align with its evolving business objectives.
© Bibhuti B Sarker, Advocate, Supreme Court of Bangladesh.