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Directors Report clarification



A company's main business was to do manfacturing activities.

Now the company is stopping manufacturing activities and its giving its premises on Rent.

In future the company will be having only Rental Income.

How such thing shall be disclosed in Directors Report.

Is it compulsory to change Object clause in MOA of the company

CA Pulkit Sharma


Yes the fact has to be disclosed in Directors report.

If the intention of the company is to consider the renting business as main object then MOA has to be changed. However if company thinks that manufacturing can be resumed later than not requuired.

Also check that other/incidntal objects in MOA should have renting as purpose. If MOA has renting as other object than also not required to update subject to renting being not the main object.