How to start a Multiple Start-ups or Business under a Single Private Limited Company in India

Introduction

The purpose of an organization is to benefit from specialized business operations. The organization’s efforts must be oriented in one direction in order to increase profit. The company is a sort of business that must go through a specific registration process and operate within the confines of the law. The charter documents of the firm, including the MoA and AoA, determine the scope of the company’s activities. The business’s object clause is listed in the company’s Memorandum of Association, which must be submitted to the MCA when the Private Limited Company in India is registered.

With respect to a Private Limited Company, all the proposed activities of the business are to be mentioned in the Object Clause of the Memorandum of Association. Further, all the businesses and the business matters incidental and supported to the Main object of the Company shall be carried out by it. Thus, there is no restriction, as such with respect to any business activity as far as the same is legally viable. Before moving through the multiple businesses could run under a single Private Limited Company, let’s have a quick look on a objective clause.

Information on Objective Clause of MOA

The object clause of a memorandum of agreement (MoA) specifies the company’s activities and the extent of its operations. A firm is prohibited from engaging in activities other than those specified in the object clause. Ultra-vires activities are those that take place outside of the purview of the MoA. The Memorandum of Association and the company’s objects are also inspected and approved during Private Limited Company Registration in order to limit and govern the company’s actions. The company must provide all of the activities it will engage in after its incorporation under the object clause.

However, whether the activities are related or not is a factor. With the approval of the member, the company may engage in many activities. All of these activities must be included under the object clause, as described above. In practice, many promoters aim to bring together a variety of activities under one roof, which is doable to some extent. We’re showing you a realistic picture of whether many business activities can be registered under one company.

When the actions are outlined with a business viewpoint and growth in mind, they can be carried out. Activities that aren’t directly related to the core company goal are allowed to take place under the same roof and aren’t a source of contention.

Ways through which multiple businesses could run under a single Private Limited Company

• Multiple Subsidiary/Sister concern Companies

You can incorporate more than one subsidiary companies in which the Common Holding company shall be a Private Limited company. Or else you could incorporate sister-concern companies in which the Board of directors shall consist of the Board of The Primary Private Limited Company.

• Incorporating Different Companies under a Common Group Name

Another option is to incorporate different companies under a common Group name. Some of the examples for the same are ‘TATA’ and ‘Reliance’. Here, the Board may or may not consist of the same directors as of the Primary Private Limited Company.

• Amalgamation/Merger

You could also go for restructuring measures also like, Amalgamation, Merger, Takeover, Acquisition etc.