changing the company or business name

The Entire Procedure of Changing a Company or Business Name in India

Online Legal India LogoBy Online Legal India Published On 14 Mar 2023 Category Company Registration

Changing a company or business name is a substantial change since the Memorandum of Association & Articles of Association must be changed. A business may change its name under The Companies Act 2013 by passing a special resolution at the general meeting and gaining clearance from the Registrar of Companies (RoC) and the Central Government.

However, changing a company or business's name does not result in forming a new corporation or organisation. Instead, the existing business will continue to operate under the new name.

Reasons for Changing A Company’s Name

The reasons for changing a company’s name are-

Change of Name Voluntarily

The corporate board may freely modify the company name. It is permissible to alter the business name freely if all prerequisites are met.

Changes in Commercial Activity

When a company's business operations change, the board of directors may opt to alter the name. It may modify the name to reflect the inclusion of new or existing business items. In such cases, the corporation should amend its Memorandum of Articles to reflect the change in its primary purpose.

For Marketing or Rebranding Purposes

A company's name might be changed for marketing purposes or to position the company's brand better. It may also update the name to reflect current fashion and trends to improve brand positioning. When a business prepares to enter a new market, it may alter its name to reposition its brand.

Transfer of Ownership

Typically, when a firm's ownership changes or an entity takes over the company, the company name changes to represent the authority of the new management and for branding considerations.

Stay Away from IPR Concerns

A company's name may be changed to strengthen its trademark or copyright in its name. Similarly, to avoid an IPR problem, the firm might alter its name.

Observance of RoC Directives

Following a complaint made by another firm claiming the primacy of the use of the name or trademark, the RoC might issue an order mandating the change in the company name. In this instance, the firm must alter its name.

Taking Advantage of a Service or Product's Popularity

When a firm becomes well-known for a specific product or service, it may elect to rename the company to capitalise on that success.

The Procedure for A Company’s Name Change

The following is a step-by-step procedure for altering the name of a private limited company:

Adoption of a Board Resolution

A board meeting should be convened to vote on changing the company name. The board of directors will consider & approve the name change, allowing a Director or the company's CS to check name availability with MCA and calling an Extraordinary General Meeting (EGM) to adopt a special resolution.
The authorised director or company secretary will request that the new name be reserved and approved using MCA's RUN (Reserve Unique Name) function. In addition, they might use the RUN facility to see if the new company name is available. This procedure is the same as the one used for first-name approval.

The RoC sent confirmation that the suggested name was accessible. Please remember that this is not the final approval of the company name; only RoC confirms that the proposed name is accessible.

The proposed name must not be identical to another existing business name or trademark and must not contain any phrases forbidden by The Companies (Incorporation) Rules, 2014. In this case, other conditions that existed at the time of first name approval are also present.
Special Resolution Adoption
Once the RoC has approved the availability of the name, the company will conduct an Extraordinary General Meeting (EGM). At the Extraordinary General Meeting, a special resolution will be voted on to change the name and modify the Memorandum of Association & Articles of Association.

Making an Application to the Registrar

Within 30 days of the resolution's passage, a special resolution will be lodged with the RoC. Form MGT-14, which provides information regarding the special resolution and will also be filed with it. The following documents accompany MGT-14:

  • A Certified Copy of Special Resolution
  • Notice of the EGM,
  • EGM explanation statement,
  • Changes to the Memorandum of Association (MOA),
  • Changes to the Articles of Association (AOA)

After filing MGT-14, the firm must file INC-24 with the RoC and the specified fee to obtain central government permission for a name change.

Because INC-24 expressly requests the SRN of MGT-14 submitted with RoC, it will be filed after MGT-14. Therefore, the following papers should be filed with the INC-24 form:

  • A verified copy of the EGM minutes at which the special resolution was approved
  • Notification of the EGM
  • Copy the resolution agreement, including the members who voted for and against the proposal.
  • If applicable, a copy of the approval order received from the authorities such as SEBI, IRDA, RBI, and so on.
  • With the new corporate name, the MoA and AoA have been modified.
  • Any additional optional additions

INC-24 also mention the reasons for the name change, the number of members who attended the EGM, the number of members voting in favour/against the resolution, and the shareholding percentage.

Certificate of Incorporation

If the Registrar of Companies is pleased with the documentation, a new certificate of incorporation will be issued. The business name change procedure is only complete once the RoC issues a new certificate of incorporation.

Checklist of Documents for Company’s Name Change

The following items are on the checklist for changing the company/business name:

  • The business's incorporation certificate.
  • Memorandum of Association & Articles of Association.
  • In order of preference, proposed names for the company/business
  • The company's directors' digital signatures.
  • List of shareholders and directors.
  • The company/business letterheads.

Grounds for Changing A Company’s Name

  • The name is affected by trademark confusion.
  • When you shift industries or products.
  • When it is an inherited name, you do not want to keep it.
  • When the company/business name needs to be longer or longer.
  • Customers need clarification when the name is deceptive or is.
  • Other additional reasons, such as dislike for the name.

The Companies Act of 2013

Section 4 of The Companies Act of 2013 states unequivocally that when naming the firm, ensure that the new name is utilised.

  • It must not be the same as or similar to the name of an existing registered firm.
  • It will not break any laws and will not be criminal.
  • In the view of the central government, it is not undesirable.
  • The text has no terms or phrases that indicate a relationship between the corporation and the federal, state, or municipal governments.
  • Any more phrases or expressions that are necessary.

Compliance Following a Name Change

Once the name change procedure is complete, the business will be awarded a certificate of incorporation with the new name. The following compliances must be met:

  • Every copy of the memorandum of association should include the company's new name.
  • All invoices, letterheads, documentation, and corporate documents should have new and old names.
  • The new and previous names must be displayed outside the company's registered office for a year following the date of the name change.
  • The new company name should be changed on all bank accounts and licences obtained from various agencies.
  • Set up a new Permanent Account Number and a tax deduction & collection account number (TAN).
  • Update the new term to cover all providers of essential utility services, such as electricity, phone bills, internet connections, etc.
  • Should notify all relevant authorities and the company's/business stakeholders.

Conclusion
Because changing a company or business's name is a legal procedure under The Companies Act 2013, it is preferable to have it done by a professionally managed organisation.

We have a team of experienced legal professionals at Online Legal India that can assist you with the complete name change procedure, including altering the primary objects.
 

 


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