All the companies incorporated under The Companies Act, 2013 are governed by the Companies Act, 2013. And apart from many other provisions, The Companies Act, 2013 has given the liberty for changing the existing name of company in case company is desirous of changing its name.
Now, let us go through its important provisions, in simple question answer method for easy understanding.
What is name change of company?
A company can change its name say example ABC Private Limited to DEF Private limited. This is simple name change, there is no private to public conversion or vice versa. The status of company remains the same, its just the name changes for the company.
Why do companies change the name of company?
The decision of changing the company name varies from company to company, management decide such decisions which can include from syncing the name of company with objects of company to syncing the Brand name and company name. The management has liberty to change the name of company.
What provisions are applicable for name change of company?
Section 4(3) states:-
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.
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.
Section 13 states:-
Any change in the name of a company shall be subject to the provisions of subsections (2) and (3) of section 4 and shall not have effect except with the approval of the Central Government in writing: Provided that no such approval shall be necessary where the only change in the name of the company is the deletion therefrom, or addition thereto, of the word ‘Private’, consequent on the conversion of any one class of companies to another class in accordance with the provisions of this Act.
Rule 29 States:-
(1) Change of name shall not be allowed to a company which has defaulted in filing it Annual Returns or Financial Statements or any document due for filing with the Registrar or which has defaulted in repayment of matured deposits or debentures or interest on deposits or debentures; (2) For the purposes of sub-section (3) of section 13, an application shall be filed in Form INC-24 along with the fee for change in the name of the company and a new certificate of incorporation in Form INC-25 shall be issued to the company consequent upon change of name.
What is the procedure to change the name of company?
The procedure is very simple and is follows:-
1. The Authorised person/officer will send the Board Meeting Notice along with Agenda.
2. Hold a meeting of Board of Directors of the company and passing of Board resolution.
3. Checking the Name Availability and its approval on Ministry of Corporate Affairs (MCA). File form RUN (Reserve Unique Name service), wherein you just need fill the following mandatory columns:-
1) Select the option New Request;
2) Entity type – Select the entity type from the drop down box;
3) CIN – Enter the Corporate identity number (CIN) of the company whose name is to be changed;
4) Proposed Names – Enter new selected name(s) (maximum two names at a time);
5) Comment section – Provide a brief (one line) about the objects of the company;
6) Choose file Tab- Attach the copy of Board resolution passed in the meeting of board of directors of the company (mandatory to attach).
4. Hold an Extra – ordinary general meeting and passing of Special resolution in the meeting.
5. Filing of relevant forms.
6. Approval from Ministry of Corporate Affairs (MCA).
What are the documents required for changing the name of company?
The following documents are required for name change of company:-
What are forms filed for name change of company?
Only two (2) E-forms are required to be filled to ROC i.e. first is E-form MGT-14 for special resolution passed in Extraordinary General Meeting and second is E-form INC-24 for Name change of company.
Note it: SRN of MGT-14 filled will be filled in E-form INC-24.
In how many days name change procedure is completed?
The whole process takes generally Two months maximum. However, due to resubmission, the process may stretch more.
What is penalty if provisions are not complied with?
If any company and directors fails to adhere with provisions as discussed above, the Registrar of Companies may cancel the changed name and/or If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.
Disclaimer: – The above article is prepared keeping in mind all the important and basic question as well as provision of section 54 of the Companies Act, 2013 which comes in mind of a professional or other stakeholder while company doing sweat equity shares allotment. The author has tried to cover all the important and basic question. Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.
(The Author is Corporate Consultant and provides varied array of services including Start-ups mentor, Secretarial, Legal, Trademark, taxation, Audit, GST, Book keeping and other ancillary advisory service in Delhi, Chandigarh as well as The National Capital Region (NCR) and can be contacted through email id:- firstname.lastname@example.org and Contact Number: 91-8178515005)