Change in Name Clause
In the fast-paced world of business, change is the only constant. This is especially true when it comes to company names. A company’s name is its identity and should be chosen carefully to reflect its values and vision. However, companies may need to change their names due to a variety of reasons. In India, the process of changing a company’s name is governed by the Companies Act, and it is important for businesses to follow the proper procedure to avoid any legal issues. In this blog post, we will discuss the change in name clause for companies in India and the steps involved in the process.
1. Importance of a Company’s Name
A company’s name is more than just a label – it is an identity that represents your business and its brand. Choosing the right name for your company is of utmost importance. As Warren Buffet once said, “Your premium brand had better be delivering something special, or it’s not going to get the business.” A good name not only makes it easy for customers to remember you, but it also makes you stand out from the crowd.
However, selecting an appropriate company name can be a challenging task, and this is where the Indian Companies Act 2013 comes into the picture. This legislation guides companies in India on the naming process and the conditions that need to be met. The Act ensures that the name of the company is unique, distinguishable, and reflects the company’s activities.
According to the Act, the process of changing the name of a company involves passing a special resolution in a board meeting, followed by obtaining approval from the ROC. This process ensures that no two companies are registered under the same name. Companies must also ensure that they adhere to the conditions laid down in the Act, such as avoiding names that violate the Emblem & Name Act or contain misleading words.
Therefore, it is crucial for companies to invest time and effort into selecting an appropriate name that accurately reflects their brand, aligns with their activities, and complies with the Indian Companies Act. As Steve Jobs said, “A brand is simply trust. A brand is trust, multiplied by time,” and a good name is the foundation for building this trust.
2. Procedure for Changing a Company’s Name
Changing a company’s name can be a significant change, as it requires amendments to be made in the memorandum of association and articles of association. The procedure for changing the name of a company is governed by the Companies Act 2013, which outlines the steps to follow in detail. To change the name of a company, the company must pass a special resolution in a general meeting, obtain the approval of the Registrar of Companies (RoC) and the Central Government.
Before initiating the process, the proposed name must be discussed by the company’s executives, and the board of directors must approve the name change. The company must remember that no two companies can be registered with the same name. Therefore, the title of the company should be chosen wisely, keeping in mind the company’s future growth.
Additionally, the process for name approval includes submitting a list of shareholders and directors, digital signature of the authorized director, and proof of the company’s registered address, among other documents. The ROC will either approve the name or resubmit it after a thorough review of the application. Once approved, the company will hold an extraordinary general meeting to pass the necessary special resolution to approve the name change and execute amendments to the MOA and AOA. After the process is complete, the ROC will issue a new certificate of incorporation with the modified name appearing on it.
In summary, the procedure for changing a company’s name is a step-by-step process involving legal formalities and regulatory requirements. It is crucial to follow the process diligently and consult legal experts if necessary to ensure a smooth and successful transition. As stated by one legal expert, “It is crucial for companies to understand the legal requirements for changing names and adhere to the correct procedures to avoid any legal or reputational damage later on.”
3. Applicable Laws and Regulations
When the name of a limited company in India, it is important to comply with the applicable laws and regulations. The Companies Act 2013 provides for the change in the name of the limited company through a special resolution and written consent of the Central Government, except in the case when the change in the company’s name involves the addition or removal of the word ‘Private’. Rule 29(1) of the Companies (Incorporation) Rules 2014 restricts the name change for companies that have failed to file their annual returns or financial statements or have not paid their matured deposits or debentures or interest thereon.
It is important to note that the company name mentioned in the memorandum should not be indistinguishable from the name of any other existing company registered under the Company’s Act or under any prevailing law. Additionally, the company name should not be undesirable in the Central Government’s opinion or likely to create an offense under any effective law.
Approval of the Central Government is required for public companies. The company needs to obtain prior consent of its shareholders by passing a special resolution in the General Meeting before undergoing the process of changing its name. The process involves conducting a board meeting and obtaining approval of the Board of directors. The authorized director or company secretary will apply in form INC-1 to MCA for checking name availability and approving the name.
Finally, listed companies that change their name due to the addition of a new business line need to comply with the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. It is crucial to obtain the necessary approvals and follow the legal provisions to ensure a smooth and lawful name change for a limited company in India.
4. Acceptable and Unacceptable Names
When comes to naming a new company in India, it is essential to keep in mind the guidelines set forth by the Companies Act of 2013. Failure to comply with these guidelines can result in the rejection of the proposed name, causing unnecessary delays in the company registration process. Therefore, it is crucial to understand what names are acceptable and unacceptable for a newly incorporated company.
– The name of the company should be unique, not resembling the names of existing companies or LLPs.
– The name should not be the plural version of an existing name or include minor variations in spelling or phonetics.
– Combining or detaching words from an existing brand name is also not accepted.
– Use of punctuation, case, and spacing does not make a name unique.
– The name should adhere to the rules and regulations set forth by the Ministry of Corporate Affairs.
– Any name that attracts the provisions of Section 3 of the Emblems and Names (Prevention and Improper Use) Act 1950.
– Any name that includes the name of a subject of an application for registration under the Trade Marks Act 1999, without obtaining consent from the owner or applicant.
– Any name that includes offensive words to any section of the people.
Remember, the name of a company carries its brand value and identity to potential clients and customers. Hence, selecting an appropriate name is essential for the success of a company. By following the guidelines and avoiding undesirable names, one can ensure a smooth registration process.
5. Process for Name Approval
When it comes to changing the name of a company in India, there is a set process that must be followed. The first step in the process is to ensure that the new name is available by conducting a name availability search on the MCA portal. According to the Ministry of Corporate Affairs, “proposed names which are not identical or too nearly resemble any existing company name and do not violate the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950, are considered for approval.”
Once the availability of the name is confirmed, an application for name approval must be filed using Form RUN (Reserve Unique Name). In this application, three proposed names must be included in order of preference. The MCA will then review the application and provide approval for one of the proposed names.
It is important to note that the approval of a new name does not automatically change the name of the company. The new name must be approved at a general meeting of the shareholders. The directors of the company must then file Form MGT-14 with the Registrar of Companies within 30 days of the approval of the new name. This form must include a copy of the resolution passed at the general meeting.
While the process for name approval may seem straightforward, it is important to ensure that all steps are followed properly in order to avoid any complications in the future. As stated by the MCA, “It is the responsibility of the applicant to ensure that the proposed name does not violate any provisions of the Companies Act, 2013 or any other applicable laws.”
6. Role of Directors in Name Change
The role of directors in the process of changing a company’s name is crucial. They are responsible for initiating the name change process and overseeing its implementation. As per the provisions laid down by the Companies Act 2013, the board of directors of a company needs to pass a special resolution for a name change, and this resolution should also include the proposed new name. The directors are the ones who select the new name, which should be distinctive and legally acceptable.
Once the board has approved the proposed new name, the director needs to file an application with the Registrar of Companies (ROC) for the approval of the new name. The ROC will examine the application and determine if the name is available for registration. If the name is available, the ROC will issue a name approval certificate.
After receiving the name approval certificate, the board of directors needs to convene a general meeting of the company and pass a special resolution for the adoption of the new name. The directors need to file the necessary documents with the ROC, including the altered memorandum and articles of association, and the certified true copy of the special resolution.
One of the directors also needs to update the new name on all the relevant documents, publicity materials, bank accounts, and other regulatory authorities. As per the Companies Act, the company needs to affix its name and the address of its registered office on the outside of every office, shop, or other premises where it carries on business.
In conclusion, the role of directors in the name change process is critical to ensure the smooth transition of the company’s identity. As quoted by the Companies Act, “A company may change its name by a special resolution and with the approval of the Central Government signified in writing.”
7. Notice Requirements for General Meeting
When comes to changing the name of a company, a general meeting is essential. Notice requirements for a general meeting must be met before any such meeting can take place. The notice should be given at least 21 days prior to the actual date of the meeting and must include the proposed date, time, and location of the meeting.
According to the Companies Act, passing a special resolution is mandatory to change the name of a company. The company should hold a board meeting to approve the need and reason for changing the name and propose new names for the company. After selecting a name, the company should authorize a Director or Company Secretary to apply to the office of the Registrar of Companies (ROC) for approval.
Once the proposed name is approved by ROC, the company must call and convene an Extraordinary General Meeting (EGM) to pass the necessary special resolution. In this meeting, they need to pass a resolution for the change of name and certain amendments in the Memorandum of Association (MOA) of the company.
The director or company secretary must ensure that the notice requirements for general meetings are met before issuing the notice to the shareholders. The purpose of the meeting should be clearly stated in the notice and circulated to all the members before the meeting is held. The passing of the special resolution in the EGM is of utmost importance, as this paves the way for the company to change its name and update its memorandum of association.
8. Alteration of Memorandum of Association
One of the significant changes that companies can make is to modify their Memorandum of Association. This document contains fundamental elements related to the company’s existence, including its name, objective, location, and legal structure. Companies usually need to alter their Memorandum of Association to keep up with changes in the business environment.
Some reasons for making changes to the Memorandum of Association include expanding the business, changing the business activity, or because of a merger or acquisition. Indian companies should be aware that these modifications require board approval and endorsement from shareholders or members, depending on the type of company.
Importantly, the Companies Act 2013 introduced a simplified process for changing a company’s name in the Memorandum of Association, which was relatively complicated in the past. This allows a company to change its name and rebrand itself more efficiently. For instance, a recent example is that the Tata Group, one of India’s largest conglomerates, changed the name of one of its flagship companies from ‘Tata Global Beverages’ to ‘Tata Consumer Products.’
Nevertheless, companies should be aware that any modification to the Memorandum of Association requires an amendment of the Articles of Association or a special resolution. Mr. Amal Agrawal, Asst. Professor at Amity Law School, explains that “Resolution required for the alteration of the Memorandum of Association and Articles of Association carry similar voting thresholds. It is vital to ensure that the members are informed about these changes and understand the implications.”
In conclusion, Alteration of Memorandum of Association is a critical process for Indian companies, as it reflects changes in their business environment. With the simplified process of changing the company’s name, companies can now rebrand themselves and modify their name clause more efficiently, making the whole process more streamlined and hassle-free.
9. Changes to Company Information
One of the key aspects of running a successful business is keeping the company information up to date. Any changes in the company’s directors, managers, or secretary must be reported to the Registrar of Companies (ROC) through eForm DIR-12 within 30 days of the event. Additionally, if there is a change in the registered office of the company, it must be intimated to the ROC through Form INC-22. But that’s not all; a company can also change its object clause, authorized capital, and paid-up capital by filing the necessary forms approved by the ROC.
One of the crucial aspects of making any changes to the company’s information is changing its name. The Companies Act, 2013, allows a limited company to change its name through a special resolution and with the written consent of the Central Government. The new name must be distinguishable from any other existing company, cannot be undesirable in the Central Government’s opinion, and cannot indicate an association with the central or state government.
“Regardless of reason and time, the name can be changed, but it shall happen under the mutual approval of shareholders,” mentions All About Name Change of Limited Company (Provisions & Procedure). The registrar must issue a new certificate of incorporation with the new name for the changes to be effective.
In summary, keeping company information up to date is vital for running a successful business. Companies must follow the provisions created by the Ministry of Corporate Affairs and the Companies Act, 2013, for making changes to their information and name.
10. Converting a Public Company to Private, and Vice Versa
One of the changes in the name clause of companies in India is the conversion of public companies to private, and vice versa. This conversion process has been transferred from the National Company Law Tribunal (NCLT) to the Regional Director (RD) through Rule 41. This change aims to provide more control in the company and lessen the compliance requirements for private companies. For the conversion process, there are legal provisions and procedures that need to be followed, including the alteration of the Memorandum of Articles (MOA) and Articles of Association (AOA) of the company under Section 14 of the Companies Act 2013. The Regional Director holds the power delegated by the Central Government to approve the conversion through a special resolution passed in a general meeting. The company should issue notices and hold a board meeting to authorize the conversion, approve the necessary amendments, and set a date for the general meeting. A special resolution should then be passed to approve the conversion, the alteration of MOA and AOA, and the issuance of a new certificate of incorporation.
“Conversion of public companies to private and vice versa can provide greater control and lessen compliance requirements. However, legal provisions and procedures must be followed, and the approval must be made through a special resolution passed in a general meeting. The alteration of MOA and AOA is necessary, and the Regional Director holds the power delegated by the Central Government to approve the conversion.”