The name of a company is its identity by which it is known to the world. Over time, the name of a company can be changed as per business needs. The change in name requires compliance of provisions of the Companies Act, 2013 which are discussed in detail in this article.
1. Change in name requires alteration in Memorandum of Association of company
Every company is incorporated with a memorandum of association (MOA) which is a charter document containing everything ranging from name clause to object clause. A change in the name of a company leads to a change in the name clause in MOA. Therefore, the procedure for alteration of MOA given in section 13 of the Companies Act, 2013 has to be followed by the company. As per that section, the name of the company can be changed by passing a special resolution along with the Central Government’s approval.
2. Things to check before applying change in name of company
Before applying for change in name of an existing company, it should be checked that company has:
- Filed its annual returns; or
- Filed its financial statements due for filing with the Registrar; or
- Paid or repaid matured deposits or debentures or interest thereon.
In case any of the above conditions is not fulfilled, the company should first make the default good and then only, it can proceed to change the name. [Rule 29 of the Companies (Incorporation) Rules, 2014).
3. Holding board meeting to transact business of change in name of company
In order to have a discussion on the new name of the company, a board meeting has to be convened as per the provisions of section 173 of the Companies Act, 2013 and Secretarial Standard -1. The Board has to:
- discuss the reasons for the change in the name of the company.
- propose two new names.(new names should not resemble an existing company or undesirable in the opinion of the Central Government).
- provide a declaration relating to filing of annual returns or financial statements and paid or repaid matured deposits or debentures or interest thereon.
- authorize one Director or the CS of the company to file an application with the Registrar of companies (ROC) for the change in name.
4. Application for availability of new name and name reservation
An authorized person on behalf of the company will file RUN- e web form on MCA portal with two proposed names along with requisite fees of INR 1,000. A copy of board resolution will also be needed as an attachment to the form. Upon satisfaction of required documents and name availability, ROC shall approve the name and in case of any objection, one resubmission chance will be provided to apply two names again within a period of 15 days.
The name approved shall be reserved initially for 20 days and with payment of additional fees, it can be extended as per below timelines given in rule 9A of Companies Incorporation Rules, 2014:
- 40 days from the date of approval on payment of fees of INR 1,000 made before expiry of 20 days from the date of approval.
- 60 days from the date of approval on payment of fees of INR 2,000 made before expiry of 40 days from the date of approval
- 60 days from the date of approval on payment of fees of INR 3,000 made before expiry of 20 days from the date of approval
5. Obtaining shareholders’ approval
Once the name is reserved, the company should proceed to obtain shareholders’ approval and approval of the Central Government. For the purpose of shareholders’ approval, an extraordinary general meeting will be called by sending a notice to concerned parties and noting the presence of a minimum number of shareholders’ (quorum). Thereafter, approval of shareholders’ will be obtained by way of passing of special resolution which shall be subject to the approval of the Central Government.
A special resolution will be filed with the Registrar within 30 days of passing the resolution. With it, Form MGT-14 will also be filed along with attachments i.e. certified copy of the special resolution, a notice of EGM, explanatory statement to EGM, altered memorandum of association, altered articles of association.
6. Obtaining approval of Central Government
As stated above, proposed names should not resemble an existing company or undesirable in the opinion of the Central Government. Further, section 4 (3) of the Companies Act, 2013 states that a company shall not be registered with a name that contains—
(a) any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central Government or any State Government under any law for the time being in force; or
(b) such word or expression, as may be prescribed in rule 8 to 8B of Companies (Incorporation) Rules, 2014.
unless the previous approval of the Central Government has been obtained for the use of any such word or expression.
According to section 13(2) of the Companies Act, 2013, any change in the name of a company shall be subject to the provisions of subsections (2) and (3) of section 4 and shall not have effect except with the approval of the Central Government in writing. Therefore, any change in name requires approval of the Central Government except where the change in name is only addition or deletion of the word ‘private’ for converting any public company into a private company or private to public company.
In order to obtain approval of the Central Government, Form INC-24 is to be filed with the Registrar once Form MGT-14 is filed. Following documents are to be attached with the Form INC-24:
- Notice along with explanatory statement
- Certified true copy of special resolution.
- Altered Memorandum & Article of Association.
- Minutes of General Meeting.
- Affidavit from Directors
7. Registering new name of company
Upon verification of form and documents, the Registrar shall satisfy himself/herself about completion of formalities and thereafter, shall register a new name of the company and issue a fresh certificate of incorporation in Form INC-25.
8. Post name change compliances
Once the new name is registered, the company shall effect the change in name in the following documents and places:
(a) paint or affix its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefore are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;
(b) have its name engraved in legible characters on its seal, if any:
(c) get its name printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and
(d) have its name printed on hundies, promissory notes, bills of exchange, and such other documents as may be prescribed.
9. Format of special resolution regarding change in name of company
“RESOLVED THAT in accordance with the provisions of sections 4(2), 4(3) and 13(2) of the Companies Act, 2013 read with rules 8 & 29 of Companies (Incorporation) Rules, 2014, subject to the approval of the Central Government, the consent of the shareholders’ be and is hereby granted, to change the name of the company from _____________________ (existing name) to ________________________ (new name).”
“RESOLVED FURTHER THAT name clause of the MOA of the company be replaced as below:
‘Clause I – The name of the company is _____________________________________’ (new name)
“RESOLVED FURTHER THAT in terms of section 14 of the Companies Act, 2013, articles of association of the company be amended by deleting the old name of the company wherever appearing and replacing the same with the new name of the company.”
“RESOLVED FURTHER THAT pursuant to the provision of section 12 of the Companies Act, 2013, the various registrations like GST, FEMA, Income tax, etc. and relevant documents be updated with the new name of the company.
“RESOLVED FURTHER THAT for purpose of giving effect to this resolution, Mr/Ms. ………………with DIN…….., Director of the company be and is hereby authorized on behalf of the company to do all such acts, deeds, matters, things as deemed necessary and to sign and execute all necessary documents, applications and returns, e-forms and to take all such steps that may be required.”