Change in Business

Procedure for the Name Change of Company as per Companies Act, 2013

The existence of the company depends upon the name of the company, as the name gives an identity to an entity. There can be several reasons for the name change of the company.

The name change of company occurs due to change in ownership, alteration in the name change clause of the memorandum, diversification of the business entity voluntary change of name and rectification of name (Compulsory change).

Applicable Section for Name change of Company under the Companies Act 2013

Along with the applicability of the above-mentioned sections, approval of the Central Government is also required in the case of Public Company. The name change results in entire name change or addition/deletion of the word i.e. from Private limited to Public Limited.

Availability and Determination of the Company’s New Name

It is important to decide the new name of the company as it is the very first stage for the change in the name of the company. While deciding the new name of the Company various factors are required to be kept in mind-

• Availability of name under MCA^[1].
• Consideration of provisions of the Companies Act 2013.
• Conducting the Board meeting and approval of the Board of directors.

Procedure for the Name Change of Company

The below-mentioned process is required to be followed for the name change procedure-

1. To conduct a Board Meeting – A Board meeting shall be convened to consider a new name of the company.
2. An application is required to be made to the registrar after deciding the new name of the Company in RUN (Reserve Unique Name) Form along with a fee of Rs 1000 for ascertaining the availability of a new name.

Note – The approval is for the name availability not for the change of name.

3. Once the Registrar of the companies confirms the name, a Board meeting is required to be held to-

• To record the new name,
• To decide the day, date, time and venue of general meeting
• Approval of the notice of the general meeting.

4. Authorize the concerned person i.e. Company Secretary and anyone of the director to issue the notice of the general meeting.

5. Issue the notice of the general meeting at least 21 days before the date of the general meeting to all the members, creditors, auditors and directors.

6. To hold the General Meeting and to pass the Special Resolution.

7. Before passing the special resolution, Special resolution and explanatory statement should be filed with Registrar of the Companies in E-form MGT-14 within 30 days of passing the Special resolution.

Documents to be enclosed in E-FORM MGT-14

• Minutes of the General Meeting;
• Notice for calling General meeting;
• Certified True Copy of Board resolution;
• Certified copy of Special resolution;
• Altered Memorandum of Association;
• Once the approval is obtained from the members by way of passing the Special Resolution, a company needs to file an application to the Central Government in prescribed FORM INC-24 along with the certified copy of –

1. The Special resolution.
2. Altered copy of the Memorandum of Association.

Within 60 days from the date of name reserved by the registrar /or 30 days from the date of passing the special resolution whichever is earlier.

•  For the issue of a fresh certificate of Incorporation, an application is to be made to the Registrar of the Companies in INC-25.

Rectification of Name

Section 16 deals with the rectification of name, where the company on its registration or registration with the changed name has come to the knowledge or if in the opinion of the Central Government the name of the Company is identical  with or nearly resembles the name by which a company in existence had been previously registered. It may direct the company to change the name, and the company either will change its name or find a new name within 3 months from the date of issue of such directions. Ordinary Resolution is required to be passed for this purpose.

Procedure for Rectification of Name

1. The Board shall authorize the Company Secretary or any of the directors of the Company to make an application on the RUN web-based portal to the Registrar of the Companies for the reservation of the proposed new named.
2. The Board will fix the date and time for the general meeting and will approve the notice to be sent to the members. All the necessary decisions are required to be made by the Company Secretary or the duly authorized director.
3. To convene the General Meeting and pass Ordinary Resolution

Notice for Name change of Company to the Registrar within 15 days

When a company changes its name/obtains a new name, it shall within 15 days from the date of such change, give notice to the Registrar of the Companies, who shall carry out necessary changes in the memorandum and certificate of Incorporation.

Conclusion

The name of the company is a symbol of its existence therefore the due process must be followed before going ahead with name change. A name change of company doesn’t affect the rights or obligations of the company. Neither does it render any legal proceedings ineffective.

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