According to Section 16 of the Companies Act, if a company (whether on its first registration or on its registration under a new name) is registered by a name that is identical to or too nearly resembles the name of a company already in existence, rectification of the name of the company is required to be carried out. If the Central Government orders it at any stage following the registration of the company, the name correction must likewise be made. The corporation must comply with the Central Government’s directive within three months of the directive’s issuance date. Additionally, if a business changes its name or acquires a new name under section 13(2), it must notify the Registrar of the change and the Central Government’s directive within fifteen days of the date of the change. The Registrar will then make the required adjustments to the memorandum and certificate of incorporation. The Registrar shall insert the new name in the register of companies in place of the previous name and shall issue a new certificate of incorporation with the new name, which the company shall use afterwards, if a business is in default in complying with any instruction made by the Central Government.
With the proviso that nothing in this subsection prevents a business from later altering its name in conformity with section 13’s rules.
- The statute states that a company’s name may be changed by passing a special resolution in the general meeting and with the Central Government’s approval.
- The Section 13 of the Companies Act, 2013 states that a company’s name may be changed by passing a special resolution in the general meeting and with the Central Government’s approval.
METHODS TO CHANGE THE NAME
A company may alter its name after incorporation using the following procedures:
(a) Changing the name from private to public after converting a private limited business into a public limited company; or
(b) The name of the firm is changed from public to private upon the conversion of a public limited company;
(c) Change of name from ABC limited to XYZ limited.
PROCEDURE FOR ALTERATION IN NAME CLAUSE OF MEMORANDUM
1. Calling of Board Meeting
(a) Send out a notice in line with the requirements of Section 173(3) of the Companies Act, 2013, calling a meeting of the Board of Directors to discuss the justification for changing the company’s name and obtaining its approval.
(b) Adopt a board resolution giving the Company Secretary/Director the necessary permission to contact the Registrar of Companies.
2. Asking the ROC if the suggested new name is available
(a) The Act’s section 4(4) and Rule 9 of the Companies (Incorporation) Rules, 2014 state that applications for name reservations or availability must be submitted in RUN and include the required fee of Rs. 1,000.
The 2014 Companies (Incorporation) Rules, Rule-8, provides name rules that should be followed while choosing a company name. However, in accordance with the Rule-9 replaced by the 2014 Companies (Incorporation) Amendment Rules, an application for a name reservation must be submitted online using the RUN (Reserve Unique Name) form and the fee specified in the Companies (Registration offices and fees) Rules, 2014. The Registrar, Central Registration Center may approve or reject the application, depending on the circumstances, after receiving it.
(3) Getting ROC approval and a letter of name availability
Following name clearance, ROC will provide a letter confirming the name’s availability for the proposed company. In accordance with the section 4(5), the Registrar may reserve a name for a time period period of twenty days starting from the date of approval or for any other time period that may be imposed on the basis of the information and documents provided with the application.
With the proviso that the Registrar may reserve the name for a period of sixty days starting from the date of approval in the event that an existing company submits a request for name reservation or a name change.
The Company Secretary/Director will call another board meeting once the name has been approved:
- To record the name approval that was granted by the ROC.
- To set the date, time, and location of the Extraordinary General Meeting (EGM), which will be held to get shareholder approval for a change to the Name clause of the Memorandum by a Special Resolution. The 2013 Companies Act’s section 13 requirement will be met by this modification to the Memorandum’s Name provision.
- To approve the EGM notice that will be affixed to the notice of the general meeting in accordance with section 102(1) of the Companies Act of 2013, along with the agenda and an explanation.
- To give the Director or Company Secretary permission to announce the EGM in accordance with the board’s approval.
4. Publishing the Extraordinary General Meeting Notice (EGM)
(a) In accordance with Section 101 of the Companies Act of 2013, give notice of the EGM to all members, legal representatives of any deceased members, assignees of any insolvent members, directors, and auditors of the company.
(b) For listed companies, the SEBI (LODR) Regulations shall apply.
(c) A general notice of the proposed general meeting may also be published in newspapers.
5. Organizing of an Extraordinary General Meeting
Hold the Extraordinary General Meeting on the scheduled date and adopt the relevant Special Resolution in accordance with section 13(1) of the Companies Act of 2013, in order to amend the Memorandum’s Name provision.
6. ROC Fillings
According to section 13(6), the company must submit the special resolution adopted by the shareholders to the relevant ROC, along with Form MGT-14 (certified by a Practicing Professional, such as a CS, CA, or CWA), within 30 days of the resolution’s adoption, with the prescribed fees and the following attachments:
• Explanatory statement required by Section 102, accompanied with a certified true copy of the Special Resolution
• Modified the Memorandum of Association
• A certified true copy of the Special Resolution and the explanation required by Section 102 for the revision of the articles to reflect the change in the company’s name clause
• Modified articles of association.
7. The ROC must issue a new certificate of incorporation that is digitally signed in Form INC-25 after reviewing the submitted documentation.
8. Inform all relevant parties and authorities, including the stock exchanges, National Securities Depository Ltd Central Depository Services (India) Ltd., statutory and other agencies like the inspector of factories, the regional provident fund commissioner, raw material suppliers, clients, banks, etc., about the change in the company’s name.
9. Arrange for a new Common Seal to be created, have it approved by the Board of Directors at a subsequent meeting, retain it in safekeeping, have stationery produced with the new name, and/or rubber stamp the new name on all current documents. It should be emphasized, nevertheless, that using the common seal is no longer required.
10. Have all name boards and signboards, no matter where they are located, painted with the new name of the company.
11. Update all books and papers relevant to the company’s activities and affairs, including the Register of Members, every copy of the Memorandum and Articles of Association, and other registrations, to reflect the new name.
12. It should be emphasized that the corporation must paint, adhere, or print the former name or names that were changed during the previous two years in every document specified above. (The first proviso to Section 12(3).)
Regulation 45 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015’s requirements for name changes
The following requirements must be met by all listed firms that decide to alter their names:
1. At least one year must have passed since the last name change;
2. The new activity suggested by the new name must have contributed at least 50% of the company’s total revenue in the prior year; or
3. The amount invested in the new activity/project (Fixed Assets + Advances + Work in Progress + Inventories + Investments + Trade Receivables + Cash & Cash Equivalents) is at least 50% of the company’s assets. The term “advances” shall only refer to those given to contractors and suppliers in connection with the execution of a project that are unique to the new activity as indicated by the new name;
4. The company would have to submit an auditor’s certificate to the stock exchange.
5.The new name along with the old name shall be disclosed through the web sites of the respective stock exchange/s where the company is listed for a continuous period of one year, from the date of the last name change, in order to confirm compliance. (Regulation 46).
If any listed entity changes its activities in a way that is not reflected in its name, it must change its name to reflect the new activities within six months of the activity change in accordance with the rules of the Companies Act of 2013. (Regulation 45).
Rule 33A. Allotment of a new name to the existing company under section 16(3) of the Companies Act, 2013
In case a company fails to change its name or new name, as the case may be, in accordance with the direction issued under sub-section (1) of section 16 of the Act within a period of three months from the date of issue of such direction, the letters “ORDNC” (which is an abbreviation of the words “Order of Regional Director Not Complied”), the year of passing of the direction, the serial number and the existing Corporate Identity Number (CIN) of the company shall become the new name of the company without any further act or deed by the company, and the Registrar shall accordingly make entry of the new name in the register of companies and issue a fresh certificate of incorporation in Form No.INC-11C:
With the proviso that nothing in sub-rule (1) shall apply if the company’s e-form INC-24 is still pending for disposition three months from the day the Regional Director issued the instruction, unless the aforementioned
The e-form is then declined. A company whose name has been changed in accordance with sub-rule (1) shall immediately comply with the requirements of section 12 of the Act, and wherever its name is printed, affixed, or engraved, the statement “Order of Regional Director Not Complied” (under section 16 of the Companies Act, 2013) shall be mentioned in brackets below the company name:
With the exception that no such declaration will be necessary to disclose if the company later changes its name in accordance with section 13 of the act.
In Pioneer Protective Glass Fiber P. Ltd. vs. Fiber Glass Pilkington Ltd.(cal) 1986 the court stated that the Change in the name of the company does not affect the entity or continuity of the company as same entity. Even after the change of name it remains the same entity with the same rights and privileges as before the change of name for all the practical purposes.
In Malhati Tea Syndicate Ltd. vs. Revenue Officer, Jalpaiguri (1973) (Cal) the court stated that Section 23(3) protects only the continuance of pending legal proceedings which had been commenced by the company in its former name. It will not protect the legal proceedings commenced in such former name, after the change of name has been affected and register in the Register of companies by the ROC, even though the mistake was bona fide.
- Pioneer Protective Glass Fibre P. Ltd. vs. Fibre Glass Pilkington Ltd.(cal) (1986)
- Malhati Tea Syndicate Ltd. vs. Revenue Officer, Jalpaiguri (1973) (Cal)
- Companies act 2013
- Dr. Avtar Singh, “Company Law”, 7 th Edition (2016), Eastern Book Company Publications.
- N. D. Kapoor, “Elements of Company Law”, 30 th Edition (2016), Sultan Chand & Sons. Publications.
- C.R. Dutta, “Company Law”,7 th edition (2016), Lexis Nexis Publications.
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