The name of a company serves as its identity, compressing its essence, values, and aspirations. It is the first impression to stakeholders and customers alike, conveying credibility and purpose. A well-chosen name resonates with the company’s mission, reflecting its uniqueness and setting the tone for its journey ahead.
A limited company’s name can be changed due to any reason with the consent of all the shareholders. Regardless of reason and time, the name can be changed but it shall happen under the mutual approval of shareholders. The reason can be anything like a change in the vision & the mission of the company, change in management, conversion from private limited to public limited and so on. We shall discuss here the provision of the Companies Act,2013 which deals with the change in the name of the limited company.
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- MCA has issued the notification related to new amendment rule 2021 33A for the allotment of a new name to the exiting company. Read PDF
Provisions for the Change in Limited Company’s Name in India
First, let’s go through the general provisions for the company’s name change which are as follows:
Section 13(2) & Section 13(6) – A company can change its name through a special resolution and under the written consent of the Central Government. However, the consent of the Central Government is not needed in the case when the change in the company’s name in relation to the addition or removal of the word ‘Private’ to/from the company’s name which will lead to the conversion of the company from Private to public and vice-versa.
Section 13(3) – When the company’s name is altered u/s 13(2), the old name of the company shall be replaced by the new name in the register of companies and this shall be done by the Registrar. Apart from this, the registrar must also issue a new certificate of incorporation with the new name. Such changes in the company’s name are incomplete and ineffective until a fresh certificate of incorporation is issued.
Section 4(2) – The things which should be taken care of under this section are. The company name mentioned in the memorandum shall not be indistinguishable from the name of any other existing company which is registered under the Company’s Act or any company law prevailing before the Company’s Act. The company name mentioned in the memorandum shall not be that the usage of which will create an offence under any law which is effective at that point in time. The company name mentioned in the memorandum shall not be undesirable in the Central Government’s opinion.
Section 4(3) – This section states that a company shall not be registered with a name that has any word or expression which is likely to indicate that the company is associated or connected to or has the patronage of – the central government/ any state government/ local authority, corporation or anybody formed by state or central government under the law prevailing at that time.
Or
any such word or expression which needs prior approval by the Central Government to use the same or the use of which is restricted by the central government.
Rule 29(1) of the Companies (Incorporation) Rules 2014
This rule restricts the name change act for the company. Which has failed to file the annual returns or whose financial statements are pending filing with the Registrar?
Or
Which has not paid or repaid matured deposits or debentures or interest thereon?
Read Also: Free Download ROC Return Filing Software for Companies
According to this rule, the change in the company’s name shall be allowed only after when the company duly files all required documents & returns and pay/repay matured deposits/debentures or interest thereon (if any).
Provision for the Company’s Name Change Due To Rectification:
Section 16(1) – A company needs to rectify its name if the name or new name, with which it has attained registration or re-registration, is indistinguishable from the name of any other company which is in existence already or registered under the company’s act or any other law effective previously. The company’s name is rectified on orders by the central government also. In such cases, the orders should be executed within the time-limit of 3 months from the date of order issue.
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Section 16(2) – When the company changes its name or gets a new name u/s 16(1), it shall give notice to the registrar along with the central government order. The notice shall be given within the time frame of 15 days from the date of the change. The registrar needs to be notified about the changes because he is responsible for executing the changes in the memorandum and the certificate of incorporation.
Section 16(3) – If a company fails to comply with any direction given under sub-section (1), the Central Government will assign a new name to the company according to the prescribed procedure. The Registrar will then update the company register with the new name, replacing the old one, and issue a fresh certificate of incorporation bearing the new name, which the company must use from then on.
Forms to be Filed to Make the Company’s Name Change Effective in India
- An application for reservation of name shall be made through the Form RUN (Reserve Unique Name) pursuant to Section 4(4) of the Companies Act, 2013 and Rule 8 & 9 of Companies (Incorporation) Rules, 2014 which may either be approved or rejected, as the case may be, by the Registrar, Central Registration Centre.
- The special resolution passed by the company pursuant to Section 13 (1) of the Companies Act, 2013 shall be filed in Form MGT-14;
- An application for approval of the Central Government for a change of name pursuant to Section 13 (2) of the Companies Act, 2013 and Rule 29(2) of the Companies (Incorporation) Rules, 2014 shall be filed by the company in Form INC-24.
A fresh certificate of incorporation pursuant to change of name shall be issued to the company in Form No. INC-25.
Limited Company’s Name Change in India → Extra Obligations for Listed Companies
- Regulation 45 of SEBI (Listing Obligations And Disclosure Requirements) Regulation, 2015: When the listed company is changing its name due to the addition of any new line of business.
- The company shall reveal its net sales/income, expenditure and net profit/ loss (after tax) which belongs to the stated new line of business, separately in the financial conclusions. These separate disclosures shall be maintained for three consecutive years from the date of the change in name. Other compliances for all the listed companies which make changes in their names
- The time duration of a minimum of 1 year must have passed from the date of last name change. A minimum of half of its total revenue in the preceding 1 year should have been reported for by the new activity recommended by the new name, or, the investment in the new activity or project (Fixed Assets + Advances + Work in Progress + Inventory + Investments & Trade Receivables + Cash & Cash equivalents) is a minimum of 50% of company’s assets.
- The ‘advances’ shall encompass only those which has been stretched out to the contractors and suppliers for the execution of project related to new activity or project as reported in the new name. To ensure adherence, an auditor’s certificate shall be submitted by the company to the stock exchange.
- The new name shall be notified along with the company’s old name via the web sites of the concerned stock exchange/s where the company is listed for a steady time-frame of one year from the date of its last change in name.
- It should be noted that If any of the listed companies mutate its activities which are not reported in its name, it shall alter its name in line with the activities within six months from the change of activities in adherence to the provisions as stated in the Companies Act, 2013.
Effects of the Limited Company’s Name Change in India
Change in the company’s name shall not alter any rights & duties of the company. Besides, it shall also not affect and withdrawn any legal proceedings initiated by the company or against the company. This means that such legal proceedings shall be continued in the new name of the company.
[Malhati Tea Syndicate Ltd. v. Revenue Officer]
A new Legal proceedings initiated in the former name of the company shall be considered invalid after the change in the company’s name and registration of the new name of the company by the registrar.
[Pioneer Protective Glass Fibre (P) Ltd. v. Fibre Glass Pilkington Ltd.]
The entity of the company continues to exist after the name change and registration of the new name of the company by the registrar. The company can not be treated as dissolved. If any legal proceeding has been initiated against the company in its former name after the name change, the company should be treated not existing and the complaint should be amended to stand in the new name.
[Solvex Oils and Fertilizers v. Bhandari Cross-Fields (P) Ltd.]
The legal proceedings initiated in the company’s former name can be carried in its new name, according to the courts.
[In Economic Investment Corporation Ltd. v. CIT (WB)]
The constitution of the company remains ineffective with the change in its name. The partnership constitution and legal entity of the company remain the same after the name change.
Procedure for Changing The Name of Limited Company in India
Step 1: Conduct a Board Meeting
A board resolution shall be passed for changing the name of the company and authorizing the Director of the company or Company Secretary, to make an application to confirm the availability of the name proposed. Resolution to hold EGM for change of the name in the Articles of Association & Memorandum of Association can also be passed either in the same Board meeting, conducted for a name change or new Board meeting convened after the approval of a new name.
Step 2: Confirming the Availability of Proposed Name
The authorized person i.e. Director of the Company or Company Secretary Confirms the availability of the proposed name by making an application to the MCA along with the copy of Board resolution passed in the meeting.
Naming Guidelines under Companies Act 2013 govern this activity and at the same time, the procedure of incorporation of a new company needs to be kept in mind. The proposed name can be reserved through web service RUN- Reserve Unique Name service available on the MCA portal.
Read Also: Easy Guide to Convert LLP into Private Limited Company
Step 3: Convene an Extraordinary General Meeting
An Extraordinary General Meeting is convened after receiving approval of a new name from ROC, to pass a special resolution for alterations in the company name, and its aftereffect to the Memorandum of Association and Articles of Association. Section 13(1), Section 13(2), Section 14 & Section 5(3) governs this step.
Step 4: Filing of Special Resolution and Application to the Registrar
In the next step, the following documents shall be filed with the Registrar of Companies:
The special resolution passed by the company u/s 13 (1) in Form MGT-14. An application was made for the name change in Form No. INC-24 along with the fee for a change in the company’s name.
Annexures to the INC-24:
As per Section 13(6) & Rule 29(2) the Companies (Incorporation) Rules 2014, the following documents need to be attached to INC-24.
- Accredited copy of the minutes of the general meeting held among the members to pass the special resolution for the company’s name change.
- Copy of the name change approval order issued by the concerned department or concerned authorities like RBI, IRDA, SEBI, etc.
- Any more details can be given as an optional attachment(s).
Step 5: Obtaining a new Certificate of Incorporation
A new certificate of incorporation shall be issued to the company in Form No. INC-25 after its name change with the allocation of new PAN and TAN numbers.
- As per Section 15(1), every change made in the Company’s AoA & MoA shall be prescribed in every copy of articles and memorandum, respectively.
- Arrange to print new copies of mutated AoA and MoA with a new Certificate of Incorporation.
- As per Section 12(3)(a), the new name of the company shall be painted or affixed outside every office or place the business is carried on. The name should be painted or affixed should be in a noticeable position and in legible letters. It should also be noted that the name should be written in the characters of the language of one of those languages which are in general use in that locality.
- Section 12(3)(b) requires the name engravement in legible characters on the company’s seal (if any).
- Section 12(3)(c) and Section 12(3)(d) mandates to get the new name printed on all the business letters, letter papers, billheads, notices & other publications of the company and on bills of exchange, promissory notes, hundies and other alike documents of the company, respectively.
- According to the first proviso to Section 12(3)(d), when has altered its name/s during the period of last two years, it shall paint/print/ affix the new name along with its previous name/s which has undergone changes during that period as prescribed under clauses (a) and (c).
- Get the new rubber stamps and all the stationery items prepared in the company’s new name.
- Notify the bank where the company’s current account is in operation and concerned government officials or authorities such as stock exchanges, Tax, and Excise Authorities, NSDL, CDSL, PF & ESI officials & so on about the change in the company’s name and intimate them to change the name in the records as well. The concerned parties with which the company has entered into a deal, or where it has made an investment or taken loans, insurance policies from; shall also be informed about the change.
- Get the name updated with basic utility services such as telephone and electricity service providers.
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