A company may opt to change its name for various strategic reasons. One common motive is to align the company’s branding with its evolving business objectives, reflecting changes in its products, services, or target market. Additionally, a name change might be necessitated by a merger, acquisition, or restructuring, signaling a shift in ownership or corporate identity as well. A name change can serve crucial legal purposes, such as avoiding trademark conflicts or complying with regulatory directives as well. Whatever the reason, changing a company’s name can be a proactive step toward revitalizing its image, strengthening its market presence, and adapting to changing business dynamics.
The name of a company serves as its identity, compressing its essence, values, and aspirations. It is the first impression to stakeholders and customers alike, conveying credibility and purpose. A well-chosen name resonates with the company’s mission, reflecting its uniqueness and setting the tone for its journey ahead.
A limited company’s name can be changed due to any reason with the consent of all the shareholders. Regardless of reason and time, the name can be changed but it shall happen under the mutual approval of shareholders. The reason can be anything like a change in the vision & the mission of the company, change in management, conversion from private limited to public limited and so on. We shall discuss here the provision of the Companies Act,2013 which deals with the change in the name of the limited company.
Why is Changing a Company’s Name Important?
- Evolution & Expansion of Business: As companies evolve and expand their operations, they may find their existing name limiting in capturing the full scope of their activities. For instance, a technology startup initially focused on software development may later diversify into hardware manufacturing or cloud services. In such cases, a name change becomes imperative to reflect the broader spectrum of the company’s offerings and market positioning.
- Brand Repositioning and Image Enhancement: Companies may opt for a name change as part of a broader strategy to reposition their brand and enhance their market image. For example, a company with a name associated with outdated technology or practices may choose to rebrand itself with a more contemporary and forward-thinking identity to appeal to modern consumers and investors.
- Mergers, Acquisitions, and Strategic Partnerships: Mergers, acquisitions, and strategic partnerships often necessitate a name change to reflect the new ownership structure or to create a unified brand identity. For instance, when two companies merge, they may consolidate under a new name that symbolizes their combined strengths and shared vision, facilitating integration and fostering a sense of unity among stakeholders.
- Legal Compliance and Intellectual Property Protection: Legal considerations, including trademark conflicts, copyright issues, and regulatory directives, can compel companies to change their names. For example, if a company discovers that its existing name infringes on another entity’s trademark rights, it may opt for a name change to avoid litigation and protect its brand reputation.
- Cultural Sensitivity and Global Expansion: In an increasingly interconnected world, companies expanding into new markets must consider cultural nuances and linguistic meanings associated with their brand names. A name that resonates positively in one region may have negative connotations in another. Therefore, companies may choose to rebrand themselves with culturally neutral or universally appealing names to facilitate global expansion and cross-cultural communication.
Provisions for the Change in Limited Company’s Name in India
Section 13(2) & Section 13(6) – A company can change its name through a special resolution and under the written consent of the Central Government. However, the consent of the Central Government is not needed in the case when the change in the company’s name in relation to the addition or removal of the word ‘Private’ to/from the company’s name which will lead to the conversion of the company from Private to public and vice-versa.
Section 13(3) – When the company’s name is altered u/s 13(2), the old name of the company shall be replaced by the new name in the register of companies and this shall be done by the Registrar. Apart from this, the registrar must also issue a new certificate of incorporation with the new name. Such changes in the company’s name are incomplete and ineffective until a fresh certificate of incorporation is issued.
Section 4(2) – The things which should be taken care of under this section are. The company name mentioned in the memorandum shall not be indistinguishable from the name of any other existing company which is registered under the Company’s Act or any company law prevailing before the Company’s Act. The company name mentioned in the memorandum shall not be that the usage of which will create an offence under any law which is effective at that point in time. The company name mentioned in the memorandum shall not be undesirable in the Central Government’s opinion.
Section 4(3) – 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.
Or
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.
Guidelines & Principles To Change Company Name
- Unique and Distinctive Name: According to MCA guidelines, the new name chosen by a company must be unique and distinctive, distinguishing it from existing company names and trademarks. The name should not be identical or deceptively similar to the names of other registered companies or trademarks to prevent confusion among consumers and investors. Conducting a thorough search of existing company names and trademarks through the MCA portal or professional services is recommended to ensure the proposed name’s uniqueness.
- Compliance with the Companies Act, 2013: The chosen name must comply with the provisions of the Companies Act, 2013, and other relevant regulations prescribed by the MCA. This includes avoiding the use of prohibited words or phrases listed in the Companies (Incorporation) Rules, 2014, and ensuring that the name reflects the company’s business activities and objectives accurately. Additionally, the name should not imply any illegal or offensive activities or contravene public policy or morality.
- Prohibition of Names under the Names and Emblems Act: Companies must ensure that the proposed name does not violate the provisions of the Names and Emblems (Prevention of Improper Use) Act, 1950, and its associated rules and regulations. This legislation prohibits the use of certain names, emblems, and symbols that are reserved for exclusive use by the government or have national significance. Therefore, companies must conduct thorough research to avoid proposing names that incorporate prohibited words, symbols, or phrases listed under the Names and Emblems Act to prevent potential legal complications and ensure compliance with statutory requirements.
- Reservation of Name through RUN Facility: To streamline the process of selecting a new name, the MCA offers the Reserve Unique Name (RUN) facility, allowing companies to reserve a proposed name for up to 20 days. Companies can submit up to two proposed names through the online portal and receive instant feedback on the availability and suitability of the names. This enables companies to make an informed decision when selecting a new name and reduces the risk of rejection by the RoC.
Detailed Company Name Change Procedure
Step 1: Passing Board Resolution
Step 2: Name Availability Check
Step 3: Passing Special Resolution
Step 4: Submitting Special Resolution to ROC
Step 5: Approval for Name Change From the ROC
Step 6: Issuance of New Certificate of Incorporation
Documents Required to Change Company Name
| Document | Purpose |
|---|---|
Board Resolution | Resolution passed by the board of directors approving the change of company name. |
Special Resolution | Resolution passed by shareholders in an Extraordinary General Meeting (EGM) approving the name change. |
Altered Memorandum of Association (MOA) | Updated MOA reflecting the new company name and any changes to the company’s objects and activities. |
Altered Articles of Association (AOA) | Updated AOA reflecting the new company name and any changes to the company’s internal regulations. |
Certified Copy of Special Resolution | Copy of the special resolution passed in the EGM, certified by a director or company secretary. |
Notice of EGM | Notice convening the EGM to pass the special resolution for the name change. |
Minutes of EGM | Minutes of the EGM where the special resolution was passed, certified by the chairman of the meeting. |
Resolution Agreement | Document detailing the members voting for and against the resolution, along with their shareholding. |
Approval Order from Authorities (if any) | Copy of approval order received from authorities such as SEBI, IRDA, RBI, etc., if applicable. |
Certificate of Incorporation | Certificate of incorporation reflecting the existing company name. |
List of Shareholders and Directors | List of shareholders and directors updated to reflect changes resulting from the name change. |
Digital Signature of the Authorised Director | Digital signature of the authorized director used for filing documents with the RoC. |
Proof of Registered Business Address | Document confirming the registered business address of the company, such as utility bills or lease agreements. |
FAQs
Do I need shareholder approval to change the company's name?
Yes, shareholder approval is required to change the company’s name. A special resolution must be passed in an Extraordinary General Meeting (EGM) to approve the name change, as per the provisions of the Companies Act, 2013.
How long does it take to change a company's name?
The timeline for changing a company’s name typically ranges from 10 to 15 working days. However, the actual duration may vary depending on factors such as name availability, scheduling of board and shareholder meetings, and processing time of government authorities.