The name of the company is the building block for its existence and to maintain its separate legal entity. The first clause of the Memorandum of Association of the company states the name of the company from which it is known in the Public domain.
In the global business environment, restructuring and arrangements are very crucial to muddle through the changing business needs. In fact, businesses should embrace change. Change is important for any organization because, without change, businesses would likely lose their competitive edge and fail to meet the needs of what most hope to be a growing base of loyal customers.
This change calls for changing in the activities and also changing the name of its business. The can be changed with the approval of members in general meeting. According to Section 13 of the Companies Act 2013, the name of the company can be changed by alteration of Memorandum by approval of members through special resolution in general meeting and with the approval of Central Government.
Background and Analysis
Section 13 of the Companies Act 2013 and Rule 8,9 and 29 of the Companies (Incorporation) Rules, 2014 specifically contains the provisions relating to change of name of company
According to Section 13(1) and 13(2), the company can change the name of the company by altering the memorandum by passing special resolution in the general meeting. Also change of name shall not have effect unless the approval of Central Government is taken. Approval of Central Government is not required when name of the company is changed consequent to conversion of Public co. into Private Co. or vice versa i.e addition of the word Private at the end or deletion of that.
The process of change shall be completed only when the Registrar enter the new name in the Registrar of Companies and issue a fresh certificate of incorporation consequent to change of name having a date from which the new name shall come into effect.
Key deliberations
- Company has not defaulted in filing of Annual Returns or Financial Statement or any other document due for filing with the Registrar. [Rule 29(1) of Companies (Incorporation) Rules, 2014]
- Company has not defaulted in repayment of matured deposits or debentures or interest on deposits or debentures. [Rule 29(1) of Companies (Incorporation) Rules, 2014]
- If any Company has changed its activities which are not reflected in its name, it shall change its name in line with its activities within a period of six months from the change of activities. [Rule 8(3) of Companies (Incorporation) Rules, 2014]
- The names released on change of name by any Company shall remain in data base and shall not be allowed to be taken by any other Company including its group company for a period of three years from date of Change subject to specific direction from Tribunal in course of merger or reconstruction or demerger. [Rule 8(8) of Companies (Incorporation) Rules, 2014]
- Power of Central Government u/s 13(2) has been delegated to Registrar of Companies
Procedure for change of name
♠ Issue notice for convening of Meeting of Board of Directors in accordance with section 173(3) of Companies Act 2013 and consider the justification for changing the name of the Company and the Board shall give its in-principle approval for initiating the process of changing the name of the company.
Also, the in-principle approval to be taken by means of resolution passed by board can be taken by passing resolution by circulation in accordance with section 175 of Companies Act, 2013 and Secretarial Standard -1 issued by Institute of Company Secretaries of India (ICSI);
♠ In accordance with Section 4(4) of Companies Act 2013 and Rule 9 of the Companies (Incorporation) Rules, 2014, an application for the availability/reservation of the new name has be made in eform no. INC-1 giving proper reasons for change of name along with a prescribed fee of Rs 1,000/- .
The Selection of Name of the company shall be in accordance with Rule 8 of the Companies (Incorporation) Rules, 2014. Also, the new name reserved shall be valid for 60 days from the date of making an application for change of name;
♠ After getting the name availability from the Registrar of Companies (ROC) , call another Board Meeting to discuss and pass following Resolutions:
- Place the name approval letter issued by ROC before the Board of Directors;
- Change the name of company and its consequent alteration in the name clause of the Memorandum of Association of the company in accordance with Section 13 of the Companies Act, 2013;
- To Approve draft notice and explanatory statement and to fix day, date and time for convening extraordinary general meeting of the company and to authorize any Director or the Company Secretary to issue Notices and Explanatory statement to the shareholders of the company;
♠ Call an Extraordinary General Meeting of the company by giving 21 days clear notice to the shareholders in accordance with Section 101 of the Companies Act 2013.
Also, the aforesaid meeting can be called on shorter notice if 95% of members entitled to vote consent for it in writing to the company;
♠ Hold the EGM and pass Special Resolution for changing the name of company and its consequent alteration in the name clause of the Memorandum of Association of the company in accordance with Section 13 and 14 of the Companies Act, 2013;
♠ File eForm No. MGT 14 within 30 days of passing of Special resolution with the concerned RoC along with following attachments:
- Notice of EGM along with explanatory statement;
- Minutes of EGM;
- Altered Memorandum of Association & Articles of Association;
- Certified True Copy of Special Resolution passed in the EGM;
- Shorter Notice consents from all shareholders, if the EGM called on shorter notice;
♠ File eForm No. INC – 24 within 30 days of passing of Special resolution for obtaining approval of Central Government (Power delegated to Registrar of Companies) for change of name of the Company.
Kindly note that this form is filed after form INC-1 and MGT-14 as this form compulsorily ask for SRN of form MGT-14
The following documents shall be filed as an attachment to the eForm No. INC – 24:
- Notice of EGM along with explanatory statement;
- Minutes of EGM;
- Altered Memorandum of Association & Articles of Association;
- Shorter Notice consents from all shareholders, if the EGM called on shorter notice
Also, it is advisable to attach challans of eform MGT-7 and eform AOC-4 as an optional attachment.
♠ After all the necessary forms and papers are filed and reviewed by the RoC, the RoC may require certain clarifications by way of resubmission of eforms. These clarifications or enquiry need to be satisfied for obtaining approval of RoC;
♠ Once all clarifications are provided, the New Certificate of Incorporation is issued by the RoC and the new name of the Company shall be deemed to be effective from the date of issue of certificate.
Author- (Inderpal Singh Sethi , Intern- New Delhi Television Limited, Email- Inderpalsethi2@gmail.com)
If the company has filed an application before NCLT for merger and the change of name is mentioned in the approved scheme..
Then also the same procedure has to be followed or some additional approval is required?
Please answer as its very urgent I am not finding any proper solution.
Thanks & Regards