Danish Textiles (Private) Limited (‘DTL’) is authorised by the objects clause of its memorandum of association to engage in the business of textile manufacturing. It has been manufacturing textiles since 1995. Sub-clause 20 of the objects clause of the memorandum of association also authorises DTL to invest its surplus funds not required for the business of manufacturing textile, in any manner as the board of directors may decide. For the past three years DTL has been investing such surplus funds in the Stock Market and DTL has made substantial gains on such investments. The directors are of the view that DTL should invest more funds in the stock market to make more profits. To achieve this purpose, they are proposing to the shareholders that a new independent provision may be inserted in the objects clause of the memorandum of association effectively enabling DTL to invest its principal funds in the stock market. Moreover, they also want to continue with the existing business of textile manufacturing.Required:With reference to the Companies Ordinance, 1984:
(b) Explain the basic procedure for making such an addition to the memorandum of association. (3 marks)
