How to Change Your Company Name: A Comprehensive Guide
How to Change Your Company Name: A Comprehensive Guide
In the dynamic business world, a company’s name is more than just an identifier; it’s a powerful symbol of its brand identity and corporate ethos. A well-chosen name can significantly impact customer perception and market presence, creating an indelible imprint in the minds of stakeholders. However, there are times when a change in a company’s name becomes imperative. Such a need may arise due to various reasons. Changing a company’s name isn’t a decision to be taken lightly. It is a strategic move that requires careful consideration and legal compliance. In India, changing a company’s name is governed by the Companies Act 2013. This article explains the company name change process, highlighting its significance and the legal process involved.
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Under the Companies Act 2013, a company can change its name through a special resolution passed in a general meeting, subject to approval from the Registrar of Companies (RoC) and the Central Government. Importantly, this name change does not create a new company or entity. The existing company will operate under its new name, and this change does not impact:
- The rights or obligations of the company
- Any legal proceedings involving or against the company
Legal Provisions for Changing a Company’s Name:
Under Section 13(2) of the Companies Act 2013, a company can change its name by passing a special resolution and obtaining approval from the Central Government (delegated to the Registrar of Companies).
- Section 4(2) of the Companies Act 2013 prohibits a company from having a name that is identical or closely resembles an existing company’s name, violates any existing law, or is considered undesirable by the Central Government (Refer to Rule 8 of Companies (Incorporation) Rules, 2014 for details).
- Section 4(3) of the Companies Act 2013 adds that certain words or expressions in a company’s name require prior approval from the Central Government to avoid creating a false impression of government affiliation.
Restrictions on Name Changes (Rules 29(1) and 29(2) of Companies (Incorporation) Rules, 2014):
- Rule 29(1): Companies that have defaulted in filing documents with the Registrar or in repaying deposits or debentures cannot change their names.
- Rule 29(2): An application in Form INC-24 must be filed along with the fee to change the name. Upon approval, a new certificate of incorporation in Form INC-25 is issued with the updated name.
Changing Company Name: When It’s Permitted
There can be several compelling reasons for a company to contemplate changing its name. Some of the most common motives include:
Changing from Private to Public
Changing from a private limited company to a public limited company may involve altering the company’s name as part of the restructuring process. This change is often made when a private company offers its shares to the public through an initial public offering (IPO) and becomes subject to different regulatory requirements.
Changing from Public to Private
Conversely, a public limited company may change its status to a private limited company. This change may involve altering the company’s name, among other modifications. Companies may choose this route for various reasons, such as reducing regulatory compliance or increasing management control.
Voluntary Name Change
Sometimes, companies opt for a complete name change, which goes beyond altering the company’s status or structure. The company’s board may choose to undergo a voluntary name change, provided all necessary conditions are met.
Adaptation to New Business Activities
When a company modifies its business activities, it may change its name to align with its updated objectives. In such cases, adjustments to the Memorandum of Articles may also be necessary.
Marketing and Rebranding
Companies may decide to change their names for marketing purposes, effective brand positioning, or to stay in tune with current trends and fashions that enhance their brand image. It can also be a strategic move when entering new markets.
Change of Ownership
A change in ownership or an entity taking over the company often results in a name change. This alteration reflects the authority of the new management and serves branding purposes.
Intellectual Property Rights (IPR)
A company may opt for a name change to strengthen its trademark or copyright protection. Conversely, it may avoid potential IPR conflicts by altering its name.
Compliance with the Registrar of Companies (RoC)
RoC may issue a company name change order following a complaint from another company claiming priority in name or trademark usage. In such cases, compliance with RoC’s directive becomes mandatory.
Leveraging Popularity
When a business gains prominence for a specific product or service, it may rebrand the entire company around that product or service to capitalize on its popularity.
Documents Required
The documents required for changing a company name include:
Attachments to Form MGT-14 (For Changing Company Name):
- Certified True Copies of the Special Resolutions along with the explanatory statement.
- A copy of the meeting notice was sent to members, including all annexures.
- Altered Memorandum & Article of Association.
- Copy of the Attendance Sheet of the General Meeting.
- Shorter Notice Consent, if applicable.
Attachments to Form INC-24 (For Name Change Approval):
- Notice along with Explanatory Statements.
- Certified True Copy of the Special Resolution.
- Altered Memorandum & Article of Association.
- Minutes of the General Meeting.
- Affidavit from Directors.
In addition to the documents that need to be filed with MGT-14 and INC-24, several essential documents are required to change the company name successfully. These documents include:
- Certificate of Incorporation
- Altered MOA and AOA
- Digital Signature of the authorised director
- Proof of registered business address
- List of shareholders and directors
- Timeline for Changing Company Name
Changing a company’s name typically takes around 10 to 15 working days due to the need for approvals from various departments.
Procedure for Changing a Company’s Name
Changing the name of a private limited company involves a systematic process, as outlined below:
Step 1: Board Resolution
Initiate the process by convening a board meeting. During this meeting, the board of directors will decide to change the company’s name. They will also authorize a Director or the Company Secretary (CS) to verify the availability of the new name with the Ministry of Corporate Affairs (MCA). Additionally, the board will set the groundwork for conducting an Extraordinary General Meeting (EGM) to pass a special resolution.
Step 2: Checking Name Availability
To ensure the chosen name for the company is available and compliant with regulatory requirements, the authorized director or company secretary will follow these steps:
- Reservation Request: The authorized representative will initiate a request for the reservation and approval of the new name using the RUN (Reserve Unique Name) facility provided by the Ministry of Corporate Affairs (MCA).
- Availability Check: Through the RUN facility, they will verify the availability of the proposed company name. This process mirrors the name approval procedure during the company’s initial incorporation.
- Confirmation from RoC: Once the request is processed, the Registrar of Companies (RoC) will issue confirmation regarding the availability of the proposed name. It’s important to note that this confirmation does not constitute the final approval of the company name; it simply confirms that the requested name is available.
- Compliance Check: The proposed name must adhere to certain guidelines. It should not closely resemble an existing company name or trademark and should not include prohibited words outlined in the Companies (Incorporation) Rules, 2014. All other conditions applicable during the initial name approval process also apply in this situation.
Step 3: Passing a Special Resolution
After obtaining confirmation from the Registrar of Companies (RoC) that the proposed name is available and compliant, the company must proceed with the following steps to formally change its name:
- Calling an Extraordinary General Meeting (EGM): The company must convene an EGM, during which shareholders will discuss and vote on the proposed name change. This meeting should be called with proper notice, and the agenda should include the resolution to change the company’s name.
- Passing a Special Resolution: During the EGM, a special resolution will be proposed and voted upon. This special resolution should explicitly state the company’s intention to change its name and make the necessary amendments to the Memorandum of Association and Articles of Association to reflect the new name.
- Approval by Shareholders: For the resolution to pass, it must receive the affirmative votes of the majority of shareholders present and voting at the EGM. The requirements for passing a special resolution may vary based on the company’s Articles of Association and applicable laws.
- Filing with RoC: Once the special resolution is passed, the company must file the resolution along with the necessary documents, such as the altered Memorandum of Association and Articles of Association, with the RoC.
- Obtaining RoC Approval: After reviewing the submitted documents, the RoC will approve the name change and the associated amendments to the company’s governing documents.
Step 4: Applying to the Registrar for Name Change Approval
After passing the special resolution and conducting the EGM, the company must follow a formal procedure to apply for the name change approval from the Registrar of Companies (RoC). Here are the steps involved:
Filing Form MGT-14
Within 30 days of passing the special resolution, the company is required to file Form MGT-14 with the RoC. This form contains essential details related to the special resolution. The above-mentioned documents should be submitted along with Form MGT-14.
Filing Form INC-24
After successfully filing Form MGT-14, the company should file Form INC-24 with the RoC. This form is used to seek approval from the Central Government for the name change.
In Form INC-24, the company must provide reasons for the name change and specify the number of members who attended the EGM, the number of members voting for and against the resolution, and the percentage of shareholding involved.
By completing these formalities and submitting the necessary documents, the company seeks approval from regulatory authorities for the name change, ensuring compliance with legal requirements.
Step 5: Issuance of Certificate of Incorporation for Name Change
Once the Registrar of Companies (RoC) has reviewed the submitted documents and is satisfied with the name change application, they will issue a new Certificate of Incorporation. It’s important to note that the name change process is considered complete only after the RoC has issued the new Certificate of Incorporation reflecting the updated company name. This certificate serves as an official confirmation of the successful name change and should be retained as a crucial legal document for the company.
Post-Change Company Name Compliance
After receiving the new certificate of incorporation from the RoC, the company should promptly update its name in various documents and records, including:
- MOA and AOA copies
- Common and official seals
- Promissory notes and bills of exchange
- Bank account name
- Tax authorities, EPF, and ESI department
- Website and social media accounts
- PAN and TAN
- Letterheads, business cards, etc.
- Statutory registers
- Employment and business contracts
- Business licenses or permits
These updates ensure legal compliance with the changed company name.
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