Changing a Section 42 Company’s Object Clause

A Section 42 company's objects are baked into the licence the Commission granted it — a charitable or not-for-profit association only exists as a company because the Commission approved those specific objects. So unlike an ordinary company's principal line of business, its object clause can't be amended, added to, or deleted just by special resolution: prior Commission approval is required for any change, however small.

Steps

  1. Confirm what you're changing is genuinely the object clause — the licensed purpose(s) stated in the memorandum. Other memorandum or articles amendments follow the ordinary alteration-of-memorandum route, but any amendment, addition, or deletion of the object clause itself needs the Commission's prior approval before it can take effect.
  2. If you're narrowing, clarifying, or updating your objects, consider adopting one of the Commission's standard object clauses — you may also update or add to a standard clause rather than drafting entirely new wording, which simplifies both drafting and approval since it starts from pre-approved language.
  3. Apply to the Commission for approval of the object-clause change using App-3B (Application for Change in Object Clause of Memorandum of Association of a Company Licensed Under Section 42).
  4. Where the application proposes multiple objects and the chief executive officer lacks direct experience in them, at least one promoter or director in each proposed field of objects must have adequate relevant experience — the same experience test the Commission applies when granting the original licence.
  5. Once the Commission approves the change, the approved wording (and any conditions attached to that approval) is deemed part of the company's memorandum and articles.
  6. Remember the object clause sits alongside every other Section 42 licence condition: objects and activities must never be, or become, against the laws, public order, security, sovereignty, or national interests of Pakistan, and income or profits may only be applied to promoting the (now-amended) objects — never distributed to members.
  7. Treat this as a compliance-critical filing, not a routine memorandum tweak: the Commission can revoke a Section 42 licence altogether if a company's objects and activities cease to comply with its licence conditions.

Sections involved

§42 Section 42 — Licencing of associations with charitable and not for profit objects

Forms you'll need

App-3B App-3B — Application for Change in Object Clause of Memorandum of Association of a Company Licensed Under Section 42 Annexure-U Annexure-U — Standardization of Object Clauses and Education Requirement

How to file a form

New to SECP's eZfile / LEAP portal? See the step-by-step filing guide →

See Important Definitions

Key terms from Section 2 (Definitions) of the Companies Act, 2017 (and, where noted, the LLP Act, 2017) that matter for this task.

§2(16) Commission §2(40) memorandum §2(50) promoter
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