Changing
company names amounts to a significant alteration since the Memorandum of
Association and Articles of Association need to be altered. As per the
Companies Act 2013, a company may change its name by passing a special
resolution in the general meeting and receiving approval from the Registrar of
Companies (RoC) and the Central Government.
However,
when a company name is changed, it will not result in creating a new company or
new entity. The established company will continue its affairs under the new
name. Thus, the change of company name will not affect the following:
vRights
or obligations of the company
vAny
legal proceedings by or against the company
REASONS FOR
CHANGE OF COMPANY NAME
A
company may decide to change its name for various reasons. Some of the common
reasons are listed below:
VOLUNTARY
CHANGE OF NAME
The
company board may decide to change the company name voluntarily. It is legal to
change the company name voluntarily subject to the fulfillment of all the
conditions.
CHANGE IN
BUSINESS ACTIVITY
A
company board may decide to change the name when it changes its business
activities. It may change the name to reflect the new or additional business
objects. In such circumstances, the company should also alter its Memorandum of
Articles to change its main object.
FOR
MARKETING OR REBRANDING
A
company can change its name for marketing reasons or to effectively position
the company’s brand. It may also change the name to as per the latest fashion
and trend for better brand positioning. When a company is ready to move into a
new market, it may change its name to reposition its brand.
CHANGE OF
OWNERSHIP
Usually,
when the ownership of a company changes or entity takeovers the company, it is
seen that the company name also changes to reflect the authority of the new
management and for branding purposes.
AVOID IPR
ISSUES
A
company may change its name to reinforce its trademark or copyright in its
name. Similarly, the company can change its name to avoid a potential IPR
conflict.
COMPLIANCE
WITH ROC DIRECTION
The
RoC can make an order directing the change in the company name subsequent to a
complaint filed by another company claiming priority of use of the name or
trademark. In such a case, the company will have to change its name.
CAPITALISING
ON THE POPULARITY OF A SERVICE OR PRODUCT
When a
business gains popularity for one particular product or service, it can decide
to rename its company around that service or product to capitalize on that
popularity.
PROCESS OF
CHANGING COMPANY NAME
The
step-by-step process of changing the name of a private limited company is
outlined below:
PASSING
BOARD RESOLUTION
A
board meeting should be called for passing a resolution to change the company
name. In the meeting, the board of directors will discuss and approve the
change in name, authorizing a Director or the CS of the company to check name
availability with MCA, and call Extraordinary General Meeting (EGM) for passing
a special resolution.
CHECKING
NAME AVAILABILITY
The
authorized director or company secretary will request for reservation and
approval of the new name under the RUN (Reserve Unique Name) facility of MCA.
They can check the availability of the new company name through the RUN
facility. This process is the same as the process adopted at the time of
initial name approval.
The
RoC send approval that the proposed name is available. Please note that this
will not be the final approval of the company name, it is just a confirmation
from RoC that the proposed name is available.
The
proposed name shouldn’t be similar to another existing company name or
trademark, and it shouldn’t include the words prohibited under the Companies
(Incorporation) Rules, 2014. Other conditions existing
at the time of initial name approval exist in this situation also.
PASSING
SPECIAL RESOLUTION
Once
the name is approved by RoC regarding the name availability the company should
call for an Extraordinary General Meeting (EGM). A special resolution will be
passed in the EGM for changing the name and making the change in the Memorandum
of Association and Articles of Association.
APPLYING TO
REGISTRAR
A
special resolution will be filed with RoC within 30 days of passing the
resolution. With it, Form MGT-14 will also be filed which contains the details
about special resolution. Following documents are submitted with MGT-14:
Once
MGT-14 is filed, the company needs to file INC-24 with the RoC for taking
approval from the central government for a name change along with the prescribed
fee.
INC-24
will be filed after MGT-14 is filed since INC-24 specifically asks for the SRN
of MGT-14 filed with RoC. Along with the INC-24 form, the following documents
should be filed:
vA
certified copy of the minutes of the EGM where the special resolution was
passed
vNotice
of the EGM
vCopy
of resolution agreement consisting of the members voting for and against the
resolution
vCopy
of approval order received from the authorities such as SEBI, IRDA, RBI, etc.,
if any
vAltered
MoA and AoA with the new company name
vAny
other optional attachments
vIn
INC-24, reasons for the name change, details about the number of members who
attended the EGM, the number of members voting in favour/ against the
resolution, and the percentage of shareholding are also mentioned.
ISSUANCE OF
CERTIFICATE OF INCORPORATION
If the
Registrar of Companies is satisfied with the documents, it will issue a new
certificate of incorporation. The company name change process isn’t completed
until the new certificate of incorporation is issued by the RoC.
DOCUMENTS
REQUIRED FOR CHANGE OF COMPANY NAME
The
following documents are required apart from the documents to be filed with
MGT-14 and INC-24:
vCertificate
of Incorporation
vAltered
MOA and AOA
vList
of shareholders and directors
vDigital
Signature of the authorized director
vProof
of registered business address
TIMELINE FOR
CHANGE OF COMPANY NAME
The
time required to change the company name is approximately 10 to 15 working days
since it involves multiple departmental approvals.
COMPLIANCES
AFTER CHANGE OF COMPANY NAME
Once
the RoC issues the new certificate of incorporation, the new company name must
be incorporated in all the copies of MOA and AOA. The company must also make
changes and put its new name in the following documents:
vThe
common seal of the company and official company seal
