The main objects shall be pursued by the company immediately on its incorporation. But if a company wishes to start a business included in other objects, it shall have to obtam either the author ity of a special resolution or an ordinary resolution and Central Government's sanction. Similarly vihen an existing company [i.e., a company in existence before the commencement of the Cmnpaes (Amendment) Act, .1965] wants to commence any new bushless, which though included in its object, is not closely related to the business which it has been carrying on at the commencement of the Amendment Act, it shall also have to pass either a special resohltion or an ordinary resolution together with Central Govemment pennission in addition to the above, the secrclary or a director must file with the Registrar, a declaration that the requirement as to resolution. etc. has been complied with. It must, however, be observed that by virtue of thus provision additional protection has been provided to the shareholders of the co npany because now the management cannot risk the capital of the company in entirely new projects, without giving any notice to them. under the pretext of pursuing objects subsidiary or incidental to the main objects.
Implied powers. Further, apart from the powers expressly provided in tile objects clause, a trading company- has also certain ;rplied powers. These are (i) to borrow money. (ii) to act by agents. (iii) to compromise disputes; and (iv) to mortgage or Be IL land. In general it may be said that a company authonsed by its objects clause to carry on the business of ma and salting cotton textiles would possess-impLied powers for the purpose of carrying on that business, to purchase or take on lease prem ses for factones, warehouses, erp offices and shops. to engage employees. to borrow money and so on, because all these ma Oars are fairly incidental (naturally attached) to the carrying out of the company's objects.
4, The ILabllity clause This clause states that the liability of members is limited to the amoumL if am unpaid on their shares. If the memorandum so pro 4des, the Ability of the directors may be unLinrited (Sec. 322). if it is proposed to register the company limited by guarantee, this clause £11 state the amount which every member undertaL es to contribute to the assets of the company in the event of its winding up. A company registered with unlimited liability need not give this clause in its memorandum of association.
The capital clause Every I i mited company (whether linuted by shares or v. bother £iited bv guarantee), having a share capital must state the amount of its share capital v th which tne company is proposed to be registered and the division thereof into shares of a fixed denmnination, in this clause. It is
INCORPORATION OF A COMPANY 85
A at For alteration in the name clause the company is required to take the tolloing steps
1 See the permission of the Union Govermnent
2 issue of agenda etc. for an extra-ordinary meeting of the shareholders. .
3 Passing of special resolution
4 Filing of a copy of the special resolution withm 30 days
5 Issue of new incorporation cerbfticate by the Registrar of Companies
6 Altering the memorandum as per the resolution effecting the change in the name clause
7 Filing the altered Mennoranduin and Articles which the Registrar within 3() days from the date of alteration