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CS Executive · Company Law and Practice · Memorandum and Articles of Association and its Alteration

Orchid Infra Ltd raised money through a prospectus for building a warehouse and still holds an unutilised part of it. It now wants to change the objects for which the money was raised. Which combination of requirements applies under the Companies Act, 2013?

A company with unutilised prospectus money must pass a special resolution, publish the prescribed details with justification in one English and one vernacular newspaper and on its website, and give dissenting shareholders an exit opportunity under SEBI regulations before changing the objects.

  1. AAn ordinary resolution and intimation to the Registrar within thirty days
  2. BA special resolution, publication of prescribed details in one English and one vernacular newspaper at the place of the registered office and on the company's website, and an exit opportunity for dissenting shareholdersCorrect
  3. CA special resolution and approval of the Tribunal only
  4. DBoard resolution and publication in one English newspaper only

Explanation

Section 13(8) bars such a company from changing the objects for which it raised money unless a special resolution is passed, details are published in one English and one vernacular newspaper circulating where the registered office is situated and placed on the website with justification, and dissenting shareholders are given an exit opportunity in accordance with SEBI regulations.

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