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Frequently Asked Questions

What is the role of the Objects or Objective Clause in defining the scope of a company's operations?

The Objects or Objective Clause plays a pivotal role in defining the scope of a company's operations. Often considered the most crucial part of the Memorandum of Association (MOA), it outlines the company's area of activity and provides a clear explanation of how the members' capital will be utilized. This clause is designed to safeguard shareholders' funds, ensuring they are used for the specific business purposes for which they were raised, and not risked in unrelated ventures. The Object Clause further elaborates on the company's purpose, stating that companies are not legally permitted to engage in any business other than what is explicitly stated in this clause. It should contain a list of the main objectives the company will pursue post-incorporation, incidental objectives necessary to achieve the main objective, and any other objectives not included in the main or incidental objectives. It is important to note that the clause should not contain anything illegal, against public interest, or against the country's general rule of law.

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