Changing Business Objectives in your Private Limited Company ?
A company objective is a goal or outcome that you want your organization to achieve. Company objectives are measurable and effectively describe the actions required to accomplish a task. Example — to increase the sales of the company , getting sustainable growth and earning good profits .
But the aim of a business can change over time. This can happen in response to internal factors, such as business growth, or in response to external factors, such as an economic recessions.
The object clause of the company is mentioned in its MOA .
Procedure to change the objectives of private limited company are as follows –
1. Pass Board Resolution
A resolution will be passed in the board meetings to approve the object clause . The board of directors need to fix a day for calling the extra ordinary general meeting of the members .
2. Special Resolution in extra ordinary general meeting
In EGM , special resolution to change the object clause will be mentioned . Opinion of all the members will be taken in account . Such a resolution shall be passed by the three — fourth of the majority.
3. MGT — 14 to be filled with ROC
Once the special resolution is passed at the EGM, the authorised director or the company secretary will file Form MGT-14 with the RoC. The MGT-14 must be digitally signed by the Managing Director or Manager or Secretary of the Company authorised by Board Resolution along with the digital signature of a Chartered Accountant or Company Secretary in whole-time practice.Along with MGT-14, other documents to be filed are–
- Certified copy of the special resolution
- Notice of Extra Ordinary General Meeting (EGM)
- Explanatory statement to the notice
- Altered Memorandum of Association
4. Issuance of Certificate of Incorporation
After receiving MGT-14, the RoC will examine the form, and if they are satisfied, they will register the change in object clause by issuing a fresh certificate of incorporation. Upon satisfaction of the correctness of an application, it shall approve the alteration and certify the registration within 30 days of filing a Special resolution.
5. Incorporating changed object clause in MOA and AOA
Once the certificate of incorporation is received from the RoC, the object clause must be incorporated in all the copies of Memorandum of Association.
