Change Company Name under Companies Act 2013
Understanding the Name Change Process Under the Companies Act, 2013: Importance and Procedure
Introduction
Brief Overview of the
Companies Act, 2013
The Companies Act, 2013,
is a comprehensive piece of legislation that governs the incorporation,
management, and functioning of companies in India.
Enacted by the Indian Parliament,
this Act replaced the Companies Act, 1956, with the aim of modernizing
corporate laws to align with global standards and ensure better transparency,
accountability, and corporate governance.
It provides a legal framework for
various types of companies, including private, public, and one-person
companies, and outlines detailed procedures for compliance, restructuring, and
dispute resolution.
Among its many provisions, the
Act also defines the rules and procedures for altering the key components of a
company's identity, such as its name, Memorandum of Association (MoA), and
Articles of Association (AoA).
Section 13 of the Companies Act,
2013, deals specifically with the alteration of the Memorandum, including the
procedure for changing a company’s name.
Importance of a Company Name
The name of a company is a
critical aspect of its identity. It is not just a legal requirement but also an
essential branding element that represents the company’s ethos, vision, and
reputation in the market. A well-thought-out name can help a company:
- Create a unique identity in the competitive
business landscape.
- Reflect the nature of its business operations and
objectives.
- Create trust and credibility with clients, shareholders,
and other stakeholders.
The company name is also legally
significant, as it is used in all official documents, registrations, and
communications. It is protected under trademark laws and forms the foundation
of the company’s intellectual property.
Reasons for Changing a Company
Name
While a company’s name is chosen
with care during incorporation, various circumstances may necessitate a change
at a later stage. Some of the common reasons include:
- Rebranding:
Companies often change their name to reflect a new brand identity, reposition themselves in the market, or communicate a shift in their business strategy. For example, a company expanding into new industries might want a broader or more inclusive name. - Merger or Acquisition:
After a merger
or acquisition, the new entity may choose a different name to represent the
combined strengths of the companies involved.
- Change in Business Objectives:
If a company
diversifies its operations or shifts focus to a different sector, it may change
its name to better align with its new objectives.
- Legal Issues or Trademark Conflicts:
Sometimes, a
company might face disputes over its name due to similarities with an existing
trademark or legal restrictions. Changing the name in such cases helps avoid
litigation or penalties.
- Regulatory Compliance:
Regulatory
bodies may require a company to change its name if it is deemed misleading or
in violation of naming rules under the Companies Act.
- Public Perception:
A company
might choose to rename itself to overcome negative publicity, distance itself
from controversies, or improve its reputation in the market.
- Simplification:
Long or complex names might be shortened or simplified to make them easier to remember and market.
Procedure for Name Change of Company
under Companies Act 2013
Steps for holding a Board
Meeting and issuing the Notice of Extraordinary General Meeting (EGM) for a
name change, as per the Companies Act, 2013
|
Step No. |
Action |
Description |
|
1 |
Board
Meeting Notice |
Send a notice
of the Board Meeting at least 7 days before the meeting date as per Section
173(3) of the Companies Act, 2013 and Secretarial Standard-1. |
|
2 |
Convening
the Board Meeting |
Convene the
Board Meeting in accordance with the provisions of the Companies Act, 2013
and the company’s Articles of Association (AOA). |
|
3 |
Deciding
Proposed Company Name |
Decide on the
proposed name for the company, ensuring compliance with Section 4(2) of the
Companies Act, 2013. |
|
4 |
Board
Resolution for Name Change |
Pass a Board
Resolution to approve the proposed name and authorize necessary actions for
filing with the Registrar of Companies (ROC). |
|
5 |
EGM Date,
Time, and Day |
Decide the
date, day, and time for holding the Extraordinary General Meeting (EGM) to
take shareholder consent for the name change. |
|
6 |
Notice of
EGM |
Issue the
Notice of EGM, ensuring it is given at least 21 days before the actual date
of the EGM as per the Companies Act, 2013. |
Steps for filing the RUN
application for a name change on the MCA V3 portal:
|
Step No. |
Action |
Description |
|
1 |
Access RUN Application Pathway |
Navigate to the MCA V3 portal: MCA Services > Company e-Filing
> Incorporation & Changes Services > RUN Application for Change of
Name of Existing Company. |
|
2 |
File RUN Application |
After passing the Board Resolution, submit the RUN application for
name reservation to the Registrar of Companies (ROC). |
|
3 |
Propose Names |
It is advisable to suggest two proposed names unless you are very
sure of one name for approval. |
|
4 |
Documents Required for Name Change |
- Copy of the Board Resolution |
|
- NOC from Trademark Owner (if applicable) |
||
|
- Clarification letter for the proposed name (if possible) specifying
the relevance and reason for the name change. |
||
|
5 |
Fee for RUN Application |
Pay the government fee of ₹1000 (subject to any changes by MCA). |
|
6 |
ROC Approval Timeline |
Typically, the ROC takes around 20 days to approve the new name. |
|
7 |
Name Reservation Approval |
If the proposed name is acceptable, ROC approves and issues a name
reservation certificate. |
|
8 |
Name Reservation Validity |
The proposed name is valid for 60 days from the date of approval.
After this, the company will need to pay for a name extension; otherwise, the
name will not be available. |
Steps for issuing the Notice
for an EGM for a name change:
|
Step No. |
Action |
Description |
|
1 |
ROC Approval |
Ensure that the ROC has approved the proposed name and issued a name
reservation certificate. |
|
2 |
Prepare EGM Notice |
Draft and prepare the Notice for the Extraordinary General Meeting
(EGM), including the date, time, place, and details of the business to be
transacted. |
|
3 |
Explanatory Statement |
Annex an explanatory statement as per Section 102 of the Companies
Act, 2013, outlining the reasons for the name change and its potential impact
on the company and its stakeholders. |
|
4 |
Send Notice to Shareholders |
Send the EGM notice to all shareholders at least 21 days before the
actual date of the meeting. It is the responsibility of the Board of
Directors to ensure timely delivery of the notice. |
|
5 |
Shorter Notice (if applicable) |
If required, the EGM can be called on shorter notice with the consent
of: |
|
- A majority in number of members present, and |
||
|
- 95% of the paid-up share capital of the company giving a right to
vote. |
||
|
6 |
Special Resolution Requirement |
Seek shareholder approval by passing a Special Resolution (requires
at least 75% consent). |
|
7 |
Key Details in Notice |
Ensure the notice specifies the following: |
|
- Date, time, place, and day of the meeting. |
||
|
- Details of the business to be transacted. |
||
|
- Explanatory statement. |
|
Step No. |
Action |
Description |
|
1 |
Conduct
EGM |
Hold the
Extraordinary General Meeting (EGM) on the specified date, time, and place as
mentioned in the notice. |
|
2 |
Quorum
Requirement |
Ensure the
meeting has the required quorum as per the Companies Act, 2013, and the
company's Articles of Association. |
|
3 |
Discussion |
Discuss the
agenda of the meeting, including the reasons and implications of the name
change. |
|
4 |
Pass
Special Resolution |
Pass a
Special Resolution to approve the name change and to amend the Memorandum of
Association (MOA) and Articles of Association (AOA). This requires consent
from at least 75% of the voting rights of the shareholders present at the
meeting (either in person or by proxy). |
|
5 |
Record
Votes |
Record the
votes for and against the resolution, ensuring compliance with voting
procedures. |
|
6 |
Prepare
Meeting Minutes |
Prepare and
maintain minutes of the EGM, including details of the resolution passed and
the voting results. |
|
7 |
Post-EGM
Actions |
Proceed with
the next steps, including filing necessary forms with the Registrar of
Companies (ROC) to formalize the name change. |
|
Step No. |
Action |
Description |
|
1 |
Form to File |
File Form MGT-14 with the Registrar of Companies (ROC) to report the
Special Resolution passed in the EGM. |
|
2 |
Time Limit |
Submit MGT-14 within 30 days from the date of passing the Special
Resolution in the EGM. |
|
3 |
Fees for Filing |
The filing fee for MGT-14 depends on the company's share capital as
per the prescribed fee schedule of the Companies Act, 2013. |
|
4 |
Mandatory Attachments |
Include the following mandatory documents with MGT-14: |
|
1. Copy of the Notice of EGM along with the Explanatory Statement. |
||
|
2. Certified True Copies of the Special Resolution passed in the EGM
along with the Explanatory Statement. |
||
|
3. Attendance Sheet of the EGM. |
||
|
4. Altered Memorandum of Association (MOA) and Articles of
Association (AOA). |
||
|
5. Subscriber sheet for e-MOA and e-AOA (if applicable). |
||
|
5 |
Optional Attachments |
- Approval letter received from ROC for the name change (if
applicable). |
|
- Consent for shorter notice (if the EGM was held on shorter notice). |
||
|
6 |
Compliance |
Ensure all attachments are signed and certified as required and the
details in the form are accurate to avoid rejection. |
Process for filing Form INC-24
with the Registrar of Companies (ROC) to seek approval from the Central
Government for the name change:
|
Step No. |
Action |
Description |
|
1 |
Form to File |
File Form INC-24 with the Registrar of Companies (ROC) to seek
Central Government approval for the name change. |
|
2 |
Time Limit |
Submit INC-24 within 30 days from the date of passing the Special
Resolution in the EGM. |
|
3 |
Fees for Filing |
The filing fee for INC-24 depends on the company's authorized share
capital as per the prescribed fee schedule. |
|
4 |
Mandatory Attachments |
Include the following mandatory documents with INC-24: |
|
1. Signed copy of the minutes of the general meeting, detailing
members' votes in favor or against the resolution. |
||
|
2. Certified True Copies of the Special Resolution, Notice of EGM,
and Explanatory Statement. |
||
|
3. Affidavit from directors as per Rule 29(1) of the Companies
(Incorporation) Rules, 2014. |
||
|
4. Altered Memorandum of Association (MOA) and Articles of
Association (AOA). |
||
|
5. If the name change is due to a change in the main activity of the
company, a certificate from a Chartered Accountant (CA) regarding turnover
details from the new activity. |
||
|
5 |
Optional Attachments |
- Copy of any approval order obtained from relevant authorities such
as RBI, IRDA, SEBI, etc., if applicable. |
|
- Any other supporting documents as required. |
||
|
6 |
Compliance |
Ensure all attached documents are signed and certified as required,
and the form details are accurate to avoid rejection. |
Step involving the issuance of
a new Certificate of Incorporation (INC-25) after the ROC approves the name
change:
|
Step No. |
Action |
Description |
|
1 |
ROC
Approval |
The Registrar
of Companies (ROC) reviews the INC-24 application and attached documents. If
everything is in order, they approve the name change. |
|
2 |
Issuance
of INC-25 |
The ROC
issues a new Certificate of Incorporation (INC-25), reflecting the new name
of the company. |
|
3 |
Legal
Confirmation |
The new
Certificate of Incorporation serves as legal confirmation of the name change
and replaces the old certificate. |
|
4 |
Effective
Date |
The name
change becomes effective from the date mentioned on the new Certificate of
Incorporation. |
|
5 |
Record
Maintenance |
The company
must update its records and official documents, including MOA, AOA, and
statutory registers, to reflect the new name. |
|
6 |
Inform
Stakeholders |
Notify
stakeholders, banks, government authorities, and other relevant parties about
the name change. Update the company's name on letterheads, signage, websites,
and other official materials. |
|
Step No. |
Action |
Description |
|
1 |
Update MOA and AOA |
Reflect the new name in all copies of the Memorandum of Association
(MOA) and Articles of Association (AOA). |
|
2 |
Update Common Seal |
Update the company’s common seal (if any) and official seal to
reflect the new name. |
|
3 |
Bank Account Name Update |
Notify the bank and update the company’s name on all bank accounts,
cheque books, and related banking documents. |
|
4 |
Update Tax Records |
Update records with tax authorities, including GST, Income Tax, EPF,
ESI, PAN, and TAN to reflect the new name. |
|
5 |
Website and Social Media Updates |
Ensure the company website, social media accounts, and online
profiles are updated with the new name. |
|
6 |
Update Stationery and Publications |
Replace old stationery with updated versions, including: |
|
- Letterheads |
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|
- Business cards |
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|
- Contracts |
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|
- Licenses |
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|
- Permits |
||
|
- Correspondence and other official publications. |
||
|
7 |
Statutory Registers |
Update the new name in all statutory registers maintained by the
company as per the Companies Act, 2013. |
|
8 |
Notify Stakeholders |
Inform stakeholders, including customers, vendors, partners, and
government authorities, about the name change. |
|
9 |
Compliance for 2 Years |
Ensure that the old name is mentioned alongside the new name (if
required) in all communications and official documents for a period of 2
years from the date of the name change. |
CS Yogesh Hegde
As a part-time company law consultant, I offer guidance on corporate governance, compliance, and legal strategy. With a deep understanding of company law, I assist organizations in navigating legal complexities, drafting contracts, ensuring compliance, and resolving disputes. I am dedicated to helping businesses thrive while mitigating legal risks. Regards, CS Yogesh Hegde Kalyan | Mumbai