Table of Contents
Introduction
A company, being a separate legal body, must have its own name in order to establish its distinct identity. The company’s name is a representation of its independent corporate existence. A company incorporated in India may choose to change its name for a variety of reasons, including rebranding, a shift in business emphasis, or for any other lawful reason.
The Companies Act, 2013, lays down the legal framework for this process, ensuring transparency and compliance. In this article, we delve into the intricacies of company name changes under the Companies Act, 2013, shedding light on the key steps involved and the importance of a seamless transition.
Procedure for Company Name Change as per Companies Act, 2013
Below is the detailed procedure for changing the name clause of a company:
- Convening the Board Meeting: Send notice as per the provisions of section 173(3) of the Companies Act, 2013, for convening a Board Meeting of Directors of the company to consider the proposal for company name change and getting the same approved.
- Filing application for name reservations: The next step is to file an application for name reservation in E-Form RUN (Reserve Unique Name) with the Ministry of Corporate Affairs. The Ministry of Corporate Affairs as the case may be accept or reject the name reservation application.
- Name reservation application approval: Upon receiving the letter for approval of application for name reservation, next step is to send notice for conducting a Board meeting to consider and approve following items:
- To take note of the name approval
- To pass Special resolution for alteration of Memorandum of Association
- To pass Special resolution for alteration of Articles of Association
- To fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of shareholders
- To approve the notice of Extra-ordinary General meeting (EGM) along with the agenda and explanatory statement as per section 102 of the Companies Act, 2013 and also authorize the director or secretary to issue the notice of such EGM for company name change.
- Holding the Extra ordinary General Meeting: Hold the Extra-ordinary General meeting and pass the necessary Special Resolutions under section 13(1) of the Companies Act, 2013 to authorize company name change. File E-Form MGT-14 available on the MCA portal within 30 days of passing the Special Resolution with the following attachments:
- Altered Memorandum of Association
- Altered Articles of Association
- Certified True copy of the Special Resolution
- Extracts of the minutes of such meeting
- Any other attachment as required from time to time mentioned in the E-Form
- File E-Form INC 24: File E-Form INC 24 within 30 days of passing the Special resolution with the Registrar of Companies (ROC) along with the prescribed fees. Following a scrutiny of the documents submitted, the ROC will issue a new certificate of incorporation in Form INC-25.
- Intimation to all the Stakeholders: Upon change name of the company, intimate all the interested stakeholders like stock exchanges, depositories, statutory offices, raw material suppliers, banks, customers, lenders, debtors etc.
Arrange for a new common seal after adopting the same at a board of directors meeting. Get the new company name painted on all of the signboards or name boards that are displayed. Correct all records and registers displaying the name of the company, including the Register of Members, Memorandum and Articles of Association, and other books and documents relevant to the company’s operations and affairs.
As per first proviso to Section 12(3) of the Companies Act, 2013 the company must paint, attach, or print the prior name or names that have changed in the last two years.
Additional requirement for company name change under Regulation 45 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
In addition to the procedure mentioned above the listed companies shall also take into consideration the following requirements for company name change:
- A time period of at least one year should have elapsed from the last company name change.
- At least fifty percent. of the total revenue in the preceding one-year period has been accounted for by the new activity suggested by the new name; or
- The amount invested in the new activity/project is atleast fifty percent. of the assets of the listed entity
- The company shall submit an auditor’s certificate to the stock exchange to confirm that all the compliances related to changing the name of the company has been done.
Definitions for the purpose of this regulation –
- ‘Assets’ of the listed entity means the sum of fixed assets, advances, works in Progress / Inventories, investments, trade receivables, cash & cash equivalents;
- ‘Advances’ shall include only those amounts extended to contractors and suppliers towards execution of project, specific to new activity as reflected in the new name.
If a listed entity changes its activities that are not represented in its name, it must alter its name to reflect the changes within six months of the change of activities in accordance with the rules of the Companies Act, 2013.
Effects of Company Name Change
- Any rights or obligations of the company shall not be affected by the change of name, nor shall any legal proceedings by or against it be rendered invalid, and any legal proceedings which might have been continued or commenced by or against the company in its former name may be continued or commenced by or against the company in its new name.
- The constitution of the company is not changed by changing its name; all rights and liabilities under the name of the previous company are transferred to the new company.
Sample Resolution for Company name change
Sample Board Resolution for Company name change:
“RESOLVED THAT pursuant to the provisions of section 13 and other applicable provisions of the Companies Act, 2013 if any and the rules framed there under, and subject to the approval of the Registrar of Companies, Ministry of Corporate Affairs and the approval of the members, the consent of the board be and is hereby accorded to change the name of the company from …………………….. to ………………………… .
FURTHER RESOLVED THAT any director of the Company be and is hereby authorized, on behalf of the Company, to make an application to the Registrar of Companies and Ministry of Corporate Affairs for ascertaining availability of proposed name and to do all acts, deeds, and things as may be necessary and to sign and execute all necessary documents, applications and returns, e-forms for the purpose of giving effect to the aforesaid resolution.”
Sample Special Resolution to be passed for Company Name Change in the General Meeting
“RESOLVED THAT pursuant to Section 13 (2) of the Companies Act, 2013, (including any statutory modification or re-enactment thereof for the time being in force) and subject to the approval of the Registrar of Companies and subject to the approval of Central Government and any other regulatory authorities as may be necessary, the consent of the members be and is hereby given to change the name of the Company to “……………………………….”
“RESOLVED FURTHER THAT the Name clause in the Memorandum of Association of the Company be altered accordingly.”
“RESOLVED FURTHER THAT in terms of Section 14 of the Companies Act, 2013, the Articles of Association of the Company be altered by deleting the existing name of the Company wherever appearing and substituting it with the new name of the Company.”
“RESOLVED FURTHER THAT any Directors of the Company be and are hereby authorized severally to communicate change in the name of the Company to all the statutory authorities and to sign all relevant documents or papers in this regard and to do all acts, deeds and things as may be necessary in this regard.”
“RESOLVED FURTHER THAT any Director of the Company be and is hereby authorized to take such steps and actions as may be considered necessary for the purpose of giving effect and implementation of the aforesaid resolution.”
Sample Letter Format to Intimate Regarding Company Name Change
To
Mr or M/s XYZ
Subject: Important Notification: Company Name Change and Continuity of Business Relationship
Dear [Recipient’s Name],
We hope this message finds you well. We are reaching out to inform you about a recent development within our organization – a change in our business name. Formerly known as [Old Company Name], we are now operating under the new name, [New Company Name], effective as of [Month DD, YYYY].
It is essential to emphasize that despite this change, there have been no alterations in our management team or the range of products and services we provide. Your current collaboration with us remains unaffected, and all previously agreed-upon terms and conditions persist. This rebranding initiative is a direct result of [Reason For Company Name Change], aimed at strengthening our market position.
We kindly request your assistance in disseminating this information to the relevant department. For your convenience, we have attached a copy of the resolution passed by the company for your reference.
Moreover, we would like to express our gratitude for the valuable partnership we share with [Recipient’s Name]. Your continued support is highly valued, and we anticipate your cooperation in this transitional phase.
Thank you for your understanding and cooperation. Should you have any questions or require further clarification, please feel free to reach out to us.
Best regards,
[Your Name]
[Your Position]
[Your Contact Information]
[New Company Name]
Conclusion
A company name change under the Companies Act, 2013, is a multi-faceted process that demands meticulous adherence to legal protocols. By navigating these procedures with precision, companies can embark on a new chapter with a refreshed identity legally.
