How to efficiently incorporate a company and receive foreign investment

How to efficiently incorporate a company and receive foreign investment. Incorporating a company in India, particularly when involving foreign shareholders and foreign direct investment (FDI), requires a strategic approach that blends legal compliance, documentation readiness, and practical banking coordination. The following guide offers a comprehensive understanding of how to efficiently incorporate a company and receive foreign investment while avoiding common pitfalls.
Incorporating a New Company: Avoiding Share Transfer Risks
It is strongly advised to incorporate the new company with the final intended shareholding structure, including both Indian and foreign shareholders, right from the beginning. Incorporating a company with Indian residents and later transferring the shares to foreign shareholders can be complex and time-consuming. Such transfers are governed by the Foreign Exchange Management Act (FEMA) and involve mandatory valuation, reporting through Form FC-TRS on the RBI's FIRMS portal, and clearance from the Authorized Dealer (AD) bank. Additionally, this process increases regulatory scrutiny and delays fund infusion. Likewise, acquiring a dormant or shelf company might appear convenient but comes with hidden liabilities, historical non-compliances, and may face KYC-related objections from banks. It is always cleaner, safer, and legally prudent to start with a fresh incorporation involving the correct stakeholders.
Object Clause: Aligning with FDI and Company Law
The Object Clause is one of the most critical components of the Memorandum of Association (MoA) a legal document that serves as the charter of a company under the Companies Act, 2013. This clause defines the primary purpose for which the company is established and outlines the permissible scope of business activities. In essence, it acts as a boundary within which the company is legally allowed to operate.
Legal Significance and Statutory Alignment
As per Section 4(1)(c) of the Companies Act, 2013, the MoA must clearly state the company’s objects for which it is proposed to be incorporated and any matter considered necessary in furtherance thereof. These objects are classified as:

Main Objects: The core business activities the company intends to undertake

Ancillary or Incidental Objects: Activities necessary or conducive to achieving the main objects

Other Objects (optional): Broader activities that the company might consider in the future

A company is legally restricted from engaging in activities not covered in its Object Clause. Engaging in such activities could be deemed ultra vires (beyond its powers) and lead to regulatory penalties or disqualification of directors.
Alignment with FDI Policy
When the company involves foreign investment, the drafting of the Object Clause becomes even more sensitive. India’s Consolidated FDI Policy, regulated by the Department for Promotion of Industry and Internal Trade (DPIIT) and governed under the FEMA (Foreign Exchange Management Act) framework, places restrictions on certain sectors. Some sectors are prohibited (like lottery business or atomic energy), while others fall under the approval route, requiring prior government approval before accepting foreign investment.
For example:

Sectors like non-banking financial services, real estate, multi-brand retail, and defence require specific approvals, licenses, or registrations.

Including words like "NBFC", "microfinance", "portfolio management", "insurance", or "securities" in the Object Clause without actually holding the necessary license from RBI, IRDAI, or SEBI may attract regulatory scrutiny.

Even if the activity is under the automatic route, precise wording and business descriptions are essential to avoid ambiguity during FDI compliance reviews.

Hence, the Object Clause should be tailored with a legal understanding of sectoral caps, entry routes, and licensing requirements as per India’s FDI regulations.
Companies that can be incorporated
In India, companies can be incorporated under various structures as per the Companies Act, 2013, depending on the nature of the business, ownership pattern, liability preferences, funding plans, and scale of operations. The most commonly incorporated type is a Private Limited Company, which requires a minimum of two members and limits the number of shareholders to 200. It offers limited liability protection, allows for equity funding, and is ideal for startups and SMEs. A Public Limited Company, on the other hand, requires at least seven members and has no upper limit on shareholders. It is suitable for large-scale businesses seeking to raise capital from the public through IPOs or private placements and is subject to stricter regulatory compliances. For solo entrepreneurs, a One Person Company (OPC) is a viable option, allowing a single individual to enjoy the benefits of a corporate structure with limited liability. An LLP (Limited Liability Partnership) combines features of both a partnership and a company, offering flexibility in management and limited liability to partners, making it suitable for professional services firms and small businesses. Section 8 Companies are non-profit organizations formed for charitable, educational, religious, or social welfare purposes, and they enjoy tax benefits and government support. Additionally, Producer Companies are formed by farmers and agricultural producers to promote cooperative farming and mutual benefits. Foreign investors can opt for Wholly Owned Subsidiaries (WOS) or Joint Venture Companies if they wish to establish a business presence in India, subject to FDI policy compliance. Apart from these, companies can also be structured as Nidhi Companies, Chit Fund Companies, or Investment Companies, depending on their specific business model and objectives. Each type of company has distinct compliance requirements, advantages, and limitations, and the choice of structure should align with long-term business goals and legal obligations.
Banking Considerations: Why Object Clause Matters
In practical terms, the Object Clause can significantly affect the company’s ability to open a current account with a bank, especially in cases involving FDI. Banks conduct internal compliance checks while onboarding corporate clients, and any mention of regulated or high-risk sectors may cause the bank to raise queries, ask for licenses, or even reject the application outright.
Some banks are particularly cautious about the inclusion of terms such as:

“Finance”

“Securities”

“Mutual Fund”

“Investment”

“Insurance”

“Banking”

“Foreign Exchange”

“Brokerage”

If these words are included in the Object Clause without proper explanation or documentation, it could delay or block account opening. In such cases, even an otherwise fully compliant incorporation could come to a standstill simply because of ambiguous wording in the Object Clause.
Proactive Consultation with Bankers
To avoid these issues, it is advisable to proactively consult the banker during the incorporation phase especially if you expect foreign investment or plan to operate in a regulated industry. This consultation can help:

Identify problematic words or phrases in the draft MoA

Understand the bank’s internal policy for high-risk sectors

Prevent delays in account opening

Ensure smoother KYC processing and FDI receipt

Some companies also choose to adopt a broad Object Clause that includes flexible language like “to engage in lawful business activities as permitted by applicable laws” while still remaining specific enough to meet MCA and bank standards.
Preparation of Documents for Foreign Shareholders and Directors
When foreign individuals or entities are involved as shareholders or directors, special care must be taken in preparing their KYC and identity documents. First, if the documents are in a foreign language, they must be translated into English by a certified translator, and the translated copy must carry official credentials. Second, the original and translated documents must be notarized by a notary public in the foreign country, confirming their authenticity. Finally, depending on the country’s membership in the Hague Convention, the notarized documents must either be apostilled or consularized. Apostille is applicable for member countries and is carried out by a designated authority (like the Ministry of Foreign Affairs). Non-member countries must get the documents consularized at the Indian Embassy or Consulate. Common documents include passport copies, proof of address, incorporation certificate and board resolution (in case of corporate shareholders), all of which must comply with these authentication norms.
Post-Incorporation: Bank Account Opening and Fund Receipt
Once the company is incorporated and statutory documents such as Certificate of Incorporation, PAN, and GST (if applicable) are obtained, the next essential step is opening a current account in an Indian bank. This account will serve as the primary channel for receiving FDI, share capital, and operational funds. The bank will require KYC documents of directors and authorized signatories, company incorporation papers, and FEMA declarations AND FEMA due diligences. Importantly, the authorized signatory’s details must be updated and properly mapped with the bank. Often, individuals may have multiple customer IDs due to existing personal accounts or due to past mergers of banks. This could lead to system errors or KYC issues. Hence, it is important to ensure that the authorized signatory has a single customer ID, consolidating all existing relationships, for seamless transaction processing and compliance tracking.
Receiving Foreign Funds: Legal and Practical Aspects
Receiving foreign investment requires a well-planned approach. The remittance must come through normal banking channels using SWIFT codes, and the AD bank will issue a Foreign Inward Remittance Certificate (FIRC) which is mandatory for reporting to the RBI. After the funds are received, the company must allot equity shares within 60 days of receipt and file Form FC-GPR on the FIRMS portal. This involves submitting the FIRC, valuation report, KYC of the foreign investor (issued by the foreign bank), share allotment documents, and other declarations. This is a critical regulatory step, and any delay or non-compliance may attract penalties under FEMA. Hence, the company should be ready with its internal resolutions, share certificates, and board approvals to process this quickly and in compliance with RBI norms.
Regulatory & Statutory Compliances Post-Funding
After the allotment of shares, the company is required to file the Return of Allotment in Form PAS-3 with the Registrar of Companies within 15 days. The share certificates must be issued within 60 days, and registers like the Register of Members and Share Transfer Register must be updated. Under FEMA, the company must also file the annual Foreign Liabilities and Assets (FLA) return by July 15 each year, disclosing the status of foreign investments. Additionally, if the company has received share capital, Form INC-20A Declaration of Commencement of Business must be filed within 180 days of incorporation. This filing requires a copy of the bank statement as proof of capital received. Non-filing may lead to penalties and disabling of the company’s status in the MCA system.
Common Mistakes to Avoid
Several common missteps can derail the incorporation and fund receipt process. These include starting the company with dummy shareholders and later transferring shares (which attracts FEMA compliance risks), using generic or sensitive object clauses without prior vetting, failing to apostille or consularize foreign documents, not updating KYC for the authorized signatory, and missing mandatory filings like FC-GPR or FLA. Another mistake is not checking whether the proposed business activity is under the automatic or approval route of FDI. Each of these oversights can lead to regulatory delays, penalties, or bank refusal to process transactions. Diligent pre-planning can eliminate most of these risks.
Final Thoughts
Incorporating a company in India, particularly with foreign investment, is a process that involves multiple legal, regulatory, and operational layers. Starting with the right shareholding structure, preparing well-drafted object clauses, ensuring compliant documentation, and selecting a responsive banking partner are foundational steps toward success. Proactive planning and regulatory awareness reduce future complications and establish trust with investors, bankers, and regulatory authorities. With the correct approach, incorporating a company and receiving foreign funds becomes a streamlined and confident process, enabling businesses to focus on growth from day one.
Frequently Asked Questions 
Q1. What is the Object Clause in the Memorandum of Association (MoA)?
Ans. The Object Clause in the MoA defines the purpose for which a company is incorporated and outlines the scope of its operations. It legally restricts the company from undertaking activities outside this defined scope. Any activity outside the Object Clause is considered ultra vires and is not permissible under company law.
Q2. Why is the Object Clause important during company incorporation?
Ans. The Object Clause acts as the legal foundation of the company. It determines what activities the company can legally carry out. It is also reviewed by regulatory authorities, investors, and banks for compliance, licensing, and operational clarity. A poorly drafted clause may lead to delays in registration, rejection of filings, or legal non-compliance.
Q3. What are the types of objects that should be mentioned in the MoA?
Ans. Generally, the Object Clause includes:

Main Objects: Core business activities.

Ancillary/Incidental Objects: Support activities required to carry out the main business.

Other Objects (Optional): Broader activities that may be undertaken in the future.

Q4. How does the Object Clause affect foreign direct investment (FDI)?
Ans. The Object Clause must align with India’s FDI Policy. Certain sectors are restricted, prohibited, or require prior government approval for foreign investment. Including such sector-specific keywords (like “NBFC,” “microfinance,” or “insurance”) without required licenses can lead to rejection of FDI-related filings, delays in bank account setup, or non-compliance with FEMA.
Q5. Can the Object Clause impact bank account opening?
Ans. Yes. Banks review the Object Clause during the KYC process before opening a current account. If the clause contains sensitive or regulated words (like “investment,” “finance,” or “mutual fund”), the bank may ask for supporting licenses or deny account opening. Consulting the bank beforehand helps avoid such delays.
Q6. What kind of words or phrases should be avoided in the Object Clause?
Ans. Avoid using regulated or misleading terms unless you have the necessary licenses. Common red-flag words include:

Finance

Investment

Securities

Mutual Fund

Banking

Insurance

Brokerage

Foreign Exchange

Only use these if your company is registered with RBI, SEBI, or IRDAI, as applicable.
Q7. Can the Object Clause be changed after incorporation?
Ans. Yes, the Object Clause can be altered later by:

Passing a special resolution of shareholders in a general meeting.

Filing Form MGT-14 with the Registrar of Companies (ROC).

Updating the MoA accordingly.

However, for companies with foreign investment, any change must also be re-evaluated under FDI norms and reported, if necessary.
Q8. How can I draft a bank-compliant and FDI-safe Object Clause?
Ans. You can ensure this by:

Clearly stating the core business in specific and lawful terms.

Consulting legal or compliance professionals to review your sector.

Avoiding regulated terms unless applicable licenses are obtained.

Seeking feedback from the proposed bank before finalizing incorporation documents.

Q9. Is there a standard format or template for the Object Clause?
Ans. While the Companies Act and incorporation rules provide a basic structure, there is no one-size-fits-all template. The clause must be customized based on your business activities and the sector in which you operate. Professional drafting ensures alignment with law and banking norms.
Q10. What happens if a company operates outside its Object Clause?
Ans. Operating outside the Object Clause is considered an ultra vires act, which is void under law. It may lead to:

Regulatory penalties or inspection by authorities.

Rejection of bank filings or investor due diligence.

Possible disqualification of directors in severe cases.

Incorporating a company in India, particularly when involving foreign shareholders and foreign direct investment (FDI), requires a strategic approach that blends legal compliance, documentation readiness, and practical banking coordination. The following guide offers a comprehensive understanding of how to efficiently incorporate a company and receive foreign investment while avoiding common pitfalls.

Incorporating a New Company: Avoiding Share Transfer Risks

It is strongly advised to incorporate the new company with the final intended shareholding structure, including both Indian and foreign shareholders, right from the beginning. Incorporating a company with Indian residents and later transferring the shares to foreign shareholders can be complex and time-consuming. Such transfers are governed by the Foreign Exchange Management Act (FEMA) and involve mandatory valuation, reporting through Form FC-TRS on the RBI's FIRMS portal, and clearance from the Authorized Dealer (AD) bank. Additionally, this process increases regulatory scrutiny and delays fund infusion. Likewise, acquiring a dormant or shelf company might appear convenient but comes with hidden liabilities, historical non-compliances, and may face KYC-related objections from banks. It is always cleaner, safer, and legally prudent to start with a fresh incorporation involving the correct stakeholders.

Object Clause: Aligning with FDI and Company Law

The Object Clause is one of the most critical components of the Memorandum of Association (MoA) a legal document that serves as the charter of a company under the Companies Act, 2013. This clause defines the primary purpose for which the company is established and outlines the permissible scope of business activities. In essence, it acts as a boundary within which the company is legally allowed to operate.

Legal Significance and Statutory Alignment

As per Section 4(1)(c) of the Companies Act, 2013, the MoA must clearly state the company’s objects for which it is proposed to be incorporated and any matter considered necessary in furtherance thereof. These objects are classified as:

Main Objects: The core business activities the company intends to undertake
Ancillary or Incidental Objects: Activities necessary or conducive to achieving the main objects
Other Objects (optional): Broader activities that the company might consider in the future

Alignment with FDI Policy

When the company involves foreign investment, the drafting of the Object Clause becomes even more sensitive. India’s Consolidated FDI Policy, regulated by the Department for Promotion of Industry and Internal Trade (DPIIT) and governed under the FEMA (Foreign Exchange Management Act) framework, places restrictions on certain sectors. Some sectors are prohibited (like lottery business or atomic energy), while others fall under the approval route, requiring prior government approval before accepting foreign investment.

For example:

Sectors like non-banking financial services, real estate, multi-brand retail, and defence require specific approvals, licenses, or registrations.
Including words like "NBFC", "microfinance", "portfolio management", "insurance", or "securities" in the Object Clause without actually holding the necessary license from RBI, IRDAI, or SEBI may attract regulatory scrutiny.
Even if the activity is under the automatic route, precise wording and business descriptions are essential to avoid ambiguity during FDI compliance reviews.

Hence, the Object Clause should be tailored with a legal understanding of sectoral caps, entry routes, and licensing requirements as per India’s FDI regulations.

Companies that can be incorporated

In India, companies can be incorporated under various structures as per the Companies Act, 2013, depending on the nature of the business, ownership pattern, liability preferences, funding plans, and scale of operations. The most commonly incorporated type is a Private Limited Company, which requires a minimum of two members and limits the number of shareholders to 200. It offers limited liability protection, allows for equity funding, and is ideal for startups and SMEs. A Public Limited Company, on the other hand, requires at least seven members and has no upper limit on shareholders. It is suitable for large-scale businesses seeking to raise capital from the public through IPOs or private placements and is subject to stricter regulatory compliances. For solo entrepreneurs, a One Person Company (OPC) is a viable option, allowing a single individual to enjoy the benefits of a corporate structure with limited liability. An LLP (Limited Liability Partnership) combines features of both a partnership and a company, offering flexibility in management and limited liability to partners, making it suitable for professional services firms and small businesses. Section 8 Companies are non-profit organizations formed for charitable, educational, religious, or social welfare purposes, and they enjoy tax benefits and government support. Additionally, Producer Companies are formed by farmers and agricultural producers to promote cooperative farming and mutual benefits. Foreign investors can opt for Wholly Owned Subsidiaries (WOS) or Joint Venture Companies if they wish to establish a business presence in India, subject to FDI policy compliance. Apart from these, companies can also be structured as Nidhi Companies, Chit Fund Companies, or Investment Companies, depending on their specific business model and objectives. Each type of company has distinct compliance requirements, advantages, and limitations, and the choice of structure should align with long-term business goals and legal obligations.

Banking Considerations: Why Object Clause Matters

In practical terms, the Object Clause can significantly affect the company’s ability to open a current account with a bank, especially in cases involving FDI. Banks conduct internal compliance checks while onboarding corporate clients, and any mention of regulated or high-risk sectors may cause the bank to raise queries, ask for licenses, or even reject the application outright.

Some banks are particularly cautious about the inclusion of terms such as:

“Finance”
“Securities”
“Mutual Fund”
“Investment”
“Insurance”
“Banking”
“Foreign Exchange”
“Brokerage”

Proactive Consultation with Bankers

To avoid these issues, it is advisable to proactively consult the banker during the incorporation phase especially if you expect foreign investment or plan to operate in a regulated industry. This consultation can help:

Identify problematic words or phrases in the draft MoA
Understand the bank’s internal policy for high-risk sectors
Prevent delays in account opening
Ensure smoother KYC processing and FDI receipt

Preparation of Documents for Foreign Shareholders and Directors

When foreign individuals or entities are involved as shareholders or directors, special care must be taken in preparing their KYC and identity documents. First, if the documents are in a foreign language, they must be translated into English by a certified translator, and the translated copy must carry official credentials. Second, the original and translated documents must be notarized by a notary public in the foreign country, confirming their authenticity. Finally, depending on the country’s membership in the Hague Convention, the notarized documents must either be apostilled or consularized. Apostille is applicable for member countries and is carried out by a designated authority (like the Ministry of Foreign Affairs). Non-member countries must get the documents consularized at the Indian Embassy or Consulate. Common documents include passport copies, proof of address, incorporation certificate and board resolution (in case of corporate shareholders), all of which must comply with these authentication norms.

Post-Incorporation: Bank Account Opening and Fund Receipt

Once the company is incorporated and statutory documents such as Certificate of Incorporation, PAN, and GST (if applicable) are obtained, the next essential step is opening a current account in an Indian bank. This account will serve as the primary channel for receiving FDI, share capital, and operational funds. The bank will require KYC documents of directors and authorized signatories, company incorporation papers, and FEMA declarations AND FEMA due diligences. Importantly, the authorized signatory’s details must be updated and properly mapped with the bank. Often, individuals may have multiple customer IDs due to existing personal accounts or due to past mergers of banks. This could lead to system errors or KYC issues. Hence, it is important to ensure that the authorized signatory has a single customer ID, consolidating all existing relationships, for seamless transaction processing and compliance tracking.

Receiving Foreign Funds: Legal and Practical Aspects

Receiving foreign investment requires a well-planned approach. The remittance must come through normal banking channels using SWIFT codes, and the AD bank will issue a Foreign Inward Remittance Certificate (FIRC) which is mandatory for reporting to the RBI. After the funds are received, the company must allot equity shares within 60 days of receipt and file Form FC-GPR on the FIRMS portal. This involves submitting the FIRC, valuation report, KYC of the foreign investor (issued by the foreign bank), share allotment documents, and other declarations. This is a critical regulatory step, and any delay or non-compliance may attract penalties under FEMA. Hence, the company should be ready with its internal resolutions, share certificates, and board approvals to process this quickly and in compliance with RBI norms.

Regulatory & Statutory Compliances Post-Funding

After the allotment of shares, the company is required to file the Return of Allotment in Form PAS-3 with the Registrar of Companies within 15 days. The share certificates must be issued within 60 days, and registers like the Register of Members and Share Transfer Register must be updated. Under FEMA, the company must also file the annual Foreign Liabilities and Assets (FLA) return by July 15 each year, disclosing the status of foreign investments. Additionally, if the company has received share capital, Form INC-20A Declaration of Commencement of Business must be filed within 180 days of incorporation. This filing requires a copy of the bank statement as proof of capital received. Non-filing may lead to penalties and disabling of the company’s status in the MCA system.

Common Mistakes to Avoid

Several common missteps can derail the incorporation and fund receipt process. These include starting the company with dummy shareholders and later transferring shares (which attracts FEMA compliance risks), using generic or sensitive object clauses without prior vetting, failing to apostille or consularize foreign documents, not updating KYC for the authorized signatory, and missing mandatory filings like FC-GPR or FLA. Another mistake is not checking whether the proposed business activity is under the automatic or approval route of FDI. Each of these oversights can lead to regulatory delays, penalties, or bank refusal to process transactions. Diligent pre-planning can eliminate most of these risks.

Final Thoughts

Incorporating a company in India, particularly with foreign investment, is a process that involves multiple legal, regulatory, and operational layers. Starting with the right shareholding structure, preparing well-drafted object clauses, ensuring compliant documentation, and selecting a responsive banking partner are foundational steps toward success. Proactive planning and regulatory awareness reduce future complications and establish trust with investors, bankers, and regulatory authorities. With the correct approach, incorporating a company and receiving foreign funds becomes a streamlined and confident process, enabling businesses to focus on growth from day one.

Frequently Asked Questions

Q1. What is the Object Clause in the Memorandum of Association (MoA)?

Ans. The Object Clause in the MoA defines the purpose for which a company is incorporated and outlines the scope of its operations. It legally restricts the company from undertaking activities outside this defined scope. Any activity outside the Object Clause is considered ultra vires and is not permissible under company law.

Q2. Why is the Object Clause important during company incorporation?

Ans. The Object Clause acts as the legal foundation of the company. It determines what activities the company can legally carry out. It is also reviewed by regulatory authorities, investors, and banks for compliance, licensing, and operational clarity. A poorly drafted clause may lead to delays in registration, rejection of filings, or legal non-compliance.

Q3. What are the types of objects that should be mentioned in the MoA?

Ans. Generally, the Object Clause includes:

Main Objects: Core business activities.
Ancillary/Incidental Objects: Support activities required to carry out the main business.
Other Objects (Optional): Broader activities that may be undertaken in the future.

Q4. How does the Object Clause affect foreign direct investment (FDI)?

Ans. The Object Clause must align with India’s FDI Policy. Certain sectors are restricted, prohibited, or require prior government approval for foreign investment. Including such sector-specific keywords (like “NBFC,” “microfinance,” or “insurance”) without required licenses can lead to rejection of FDI-related filings, delays in bank account setup, or non-compliance with FEMA.

Q5. Can the Object Clause impact bank account opening?

Ans. Yes. Banks review the Object Clause during the KYC process before opening a current account. If the clause contains sensitive or regulated words (like “investment,” “finance,” or “mutual fund”), the bank may ask for supporting licenses or deny account opening. Consulting the bank beforehand helps avoid such delays.

Q6. What kind of words or phrases should be avoided in the Object Clause?

Ans. Avoid using regulated or misleading terms unless you have the necessary licenses. Common red-flag words include:

Finance
Investment
Securities
Mutual Fund
Banking
Insurance
Brokerage
Foreign Exchange

Only use these if your company is registered with RBI, SEBI, or IRDAI, as applicable.

Q7. Can the Object Clause be changed after incorporation?

Ans. Yes, the Object Clause can be altered later by:

Passing a special resolution of shareholders in a general meeting.
Filing Form MGT-14 with the Registrar of Companies (ROC).
Updating the MoA accordingly.

However, for companies with foreign investment, any change must also be re-evaluated under FDI norms and reported, if necessary.

Q8. How can I draft a bank-compliant and FDI-safe Object Clause?

Ans. You can ensure this by:

Clearly stating the core business in specific and lawful terms.
Consulting legal or compliance professionals to review your sector.
Avoiding regulated terms unless applicable licenses are obtained.
Seeking feedback from the proposed bank before finalizing incorporation documents.

Q9. Is there a standard format or template for the Object Clause?

Ans. While the Companies Act and incorporation rules provide a basic structure, there is no one-size-fits-all template. The clause must be customized based on your business activities and the sector in which you operate. Professional drafting ensures alignment with law and banking norms.

Q10. What happens if a company operates outside its Object Clause?

Ans. Operating outside the Object Clause is considered an ultra vires act, which is void under law. It may lead to: