Can an objects clause of an investment company be specific and be incorporated to act as holding company for its family members and descendants. Can the main objects start like this:
TO ACT AS GROUP HOLDING COMPANY FOR AGARWAL FAMILY AND DESCENDANTS
Shubham (Student) (46 Points)
25 June 2010Can an objects clause of an investment company be specific and be incorporated to act as holding company for its family members and descendants. Can the main objects start like this:
TO ACT AS GROUP HOLDING COMPANY FOR AGARWAL FAMILY AND DESCENDANTS
Yogesh Bhatt
(Company Secretary)
(475 Points)
Replied 25 June 2010
Dear Shubhm,
AS i understand Object Clause shows the Which Business Company want to do not show the relation of Holding and Subsidy Company.
And Relation of Holding and Subsidy is decided base on Dirctorship and Investment of Criteia as per section 4 of Companies Act.
So. Object Clause must be specific.
vivek
(CS)
(751 Points)
Replied 25 June 2010
U must not write to act as holding company but u should put "to make investment in various companies" as main object clause.
Shubham
(Student)
(46 Points)
Replied 25 June 2010
Thanks guys for replying. My question in this regard is whether a company can have an object clause which is specific in the sense that it states that it can only make investment and finance AGARWAL FAMILY AND DESCENDANTS instead of "various companies" and can an object clause include the name of a particular company or person??
You are free to draft your object clause till the objects included are legal and not against any provisions of law. Generally object clause are drafted extensively, in your case you purposefully want to limit the object clause, to invest in some companies only………..there should not be any problem to anybody in it, it’s company’s wish to limit its areas of operation and its free to do the same.
Regards
Ratti Wahal
(Company Secretary)
(139 Points)
Replied 25 June 2010
Dear Shubham,
Its no where stated that one has to draft object while keeping in mind certain set criterions.
In general practise, we'll try to cover maximum area as we can so that in future there is no need arises to modify the object clause again as a Company is suppose to function as the object clause says.
There is no problem in drafting the way you have specified. As rightly said by Randhir, the object must include the legal things etc. i seconded the same.
But i would like to advise once again, Think once before you draft an object which creates a limit for you.
Regards
CAclubindia
