Compliances

Change in the Name of the Company: Step by Step Procedure

calendar16 Sep, 2019
timeReading Time: 4 Minutes

Change is common, and things keep changing all the time. So do you think about sticking to the same business name is a wise decision even if your company is expanding in different new areas? The company name change is not that easy process and must not be taken lightly. Your company’s name must be relevant to the service it is providing. Rectification of a company’s name or change in the name of the company is done to make words correspond to the reality in case it is inappropriate. The Memorandum of Association of the Company (MOA) contains Name Clause, Registered Office Clause, and Object Clause. By the alteration of the name of a company, you can change the name clause.

How to choose the proposed name for the company?

After incorporation the Company can change their name by the ways that are given below –

(a) Conversion of company name from private company to public company, or

(b) Conversion of name from public company to private company, or

(c) Change of name 0f the company from ABC limited to XYZ limited.

The clause containing the “Change in Name” of the Company contains alteration of Memorandum of Association of the Company. Under section 13 of Companies Act 2013, the provision on the amendment process in MoA is applicable to all companies. All clauses of Memorandum apart from Capital clause can be altered by following the provisions of Section 13 of Companies Act, 2013[1] by passing special resolution. Under Section 13 of the Companies Act, 2013 it deals with change of name of the company which provides that by a special resolution the name of the company can be changed and also with the Central Government’s approval. In case the change is about the addition/ or deletion of the words “private” to the company name then approval of Central Government is not required.

Certain things must be kept in mind before deciding the company’s name:

  • The name of a company is the foremost thing that the customer looks while availing any service. It must be unique, and in accordance with the service, the company is providing.
  • The second thing is to check the availability of the company’s name in the list of companies named on the MCA website.

Step by Step procedure for changing the name of the company

  • Board Meeting for the change in the title

A Board meeting is being held for the discussion on the new name of the company. The Board of Directors has to decide the reasons for the change in the name of the company. Three new names are being proposed for the change in the name. It requires Board approval for the name change where the Board has to authorize one Director or the CS of the company to file an application with the Registrar of companies (ROC) for the change in name.

  • Name availability Check on the MCA portal –

The procedure for the name availability check is the same as that while registering the new name for the company. For checking the name availability, the authorized person will apply in the RUN (Reserve Unique Name) to MCA (Ministry of Corporate affairs).

  • Application for the approval of the company’s new name availability –

According to the provisions of the Companies Act, 2013, an application is being filed for the name change of the company. The company needs to file an application in RUN form along with fees to the Registrar of Companies (ROC).  The Registrar of the company will send a letter to the company stating the availability of the proposed name. After that, the proposed name, as confirmed by the ROC, should not be similar to the existing company name.

  • Application to the Registrar –

After the resolution is being passed, within 30 days, a special resolution is filed. Form MGT -14 is filed, which contains the details about the particular decision.

Following are the documents that are submitted with MGT-14 –

  • A certified copy of Special Resolution
  1. EGM (Export General Manifest) Notice and Explanatory statement to EGM
  2. Modified MOA(Memorandum of Association)
  3. Modified ( Article of Association)

After the name is approved, MGT 14 needs to be filed. MGT 14 is a necessary resolution for the alteration of MOA and AOA. After that, the company will file INC-24 with the ROC for seeking the approval procedure by the Central government along with the prescribed fee. Form INC-24 also includes the reasons for the name change, the number of members who attended the EGM and voted in the favor or against the resolution and percentage of shareholding.

  • Issuance of Certificate of Incorporation

The ROC will verify the documents, and if it is relevant and satisfying, then a new certificate of Incorporation is issued.

  • Incorporation of Company Name in MOA and AOA

After receiving the certificate of Incorporation from ROC, the company is incorporated in all the copies of MOA and AOA.

Rectification of the Name of a Company

  • According to Section 16 of the companies Act, a company having its first registration or having a registration by a new name is registered by a name which is per the rules of the Central Government. According to the central government, the name must resemble the name by which a company in existence had been previously registered. Under this Act, the company can change its name within a period of three months from the issue of such direction.
  • When a company is changing its name under sub-section 1, within fifteen days from the date of such change, a notice is given to the Registrar along with the order of the central government. This will help in carrying out the necessary changes in the certificate of Incorporation and the memorandum.
  • If a company does not comply with the direction given under sub-section (1), there is a fine of one thousand rupees every day on the company, and the default for the same continues till the directions do not comply. Every officer who is in default is punishable with fine, which is not less than five thousand rupees, and it can extend to one lakh rupees.

Conclusion

Change is gradual, hence you must accept it. The same way your business name may change according to the service it is providing. Reasons being anything, you must be prepared for the procedure to follow. The name Backrub once knew Google. And hence there are many other companies like Yahoo, Best Buy, Accenture, and Pepsi, who developed the same idea of rectifying the name of the company. Whether your company is too small or too big, or it does not resemble the service it is providing. The name of your company should be easy to remember, easy to spell, and easy to pronounce. And for this, it may require Rectification. So Rectification in the name of a company is a crucial aspect of your business and must be followed with the proper procedures.

Read our article: How to Establish a New Company under Companies Act 2013 via SPICE+?

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