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 For example, a company with a name associated with outdated technology or practices may choose to rebrand itself with a more contemporary and forward-thinking identity to appeal to modern consumers and investors.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.
Procedure for Changing the Name of a Company
Step 1: Conduct a Board Meeting
A board resolution shall be passed for changing the name of the company and authorizing the Director of the company or Company Secretary, to make an application to confirm the availability of the name proposed. Resolution to hold EGM for change of the name in the Articles of Association & Memorandum of Association can also be passed either in the same Board meeting, conducted for a name change or new Board meeting convened after the approval of a new name.
Step 2: Confirming the Availability of Proposed Name
The authorized person i.e. Director of the Company or Company Secretary Confirms the availability of the proposed name by making an application to the MCA along with the copy of Board resolution passed in the meeting.
Naming Guidelines under Companies Act 2013 govern this activity and at the same time, the procedure of incorporation of a new company needs to be kept in mind. The proposed name can be reserved through web service RUN- Reserve Unique Name service available on the MCA portal.
Step 3: Convene an Extraordinary General Meeting
An Extraordinary General Meeting is convened after receiving approval of a new name from ROC, to pass a special resolution for alterations in the company name, and its aftereffect to the Memorandum of Association and Articles of Association. Section 13(1), Section 13(2), Section 14 & Section 5(3) governs this step.
Step 4: Filing of Special Resolution and Application to the Registrar
In the next step, the following documents shall be filed with the Registrar of Companies:
The special resolution passed by the company u/s 13 (1) in Form MGT-14. An application was made for the name change in Form No. INC-24 along with the fee for a change in the company’s name.
Annexures to the INC-24:
As per Section 13(6) & Rule 29(2) the Companies (Incorporation) Rules 2014, the following documents need to be attached to INC-24.
- Accredited copy of the minutes of the general meeting held among the members to pass the special resolution for the company’s name change.
- Copy of the name change approval order issued by the concerned department or concerned authorities like RBI, IRDA, SEBI, etc.
- Any more details can be given as an optional attachment(s).
Step 5: Obtaining a new Certificate of Incorporation
A new certificate of incorporation shall be issued to the company in Form No. INC-25 after its name change with the allocation of new PAN and TAN numbers.
- As per Section 15(1), every change made in the Company’s AoA & MoA shall be prescribed in every copy of articles and memorandum, respectively.
- Arrange to print new copies of mutated AoA and MoA with a new Certificate of Incorporation.
- As per Section 12(3)(a), the new name of the company shall be painted or affixed outside every office or place the business is carried on. The name should be painted or affixed should be in a noticeable position and in legible letters. It should also be noted that the name should be written in the characters of the language of one of those languages which are in general use in that locality.
- Section 12(3)(b) requires the name engravement in legible characters on the company’s seal (if any).
- Section 12(3)(c) and Section 12(3)(d) mandates to get the new name printed on all the business letters, letter papers, billheads, notices & other publications of the company and on bills of exchange, promissory notes, hundies and other alike documents of the company, respectively.
- According to the first proviso to Section 12(3)(d), when has altered its name/s during the period of last two years, it shall paint/print/ affix the new name along with its previous name/s which has undergone changes during that period as prescribed under clauses (a) and (c).
- Get the new rubber stamps and all the stationery items prepared in the company’s new name.
- Notify the bank where the company’s current account is in operation and concerned government officials or authorities such as stock exchanges, Tax, and Excise Authorities, NSDL, CDSL, PF & ESI officials & so on about the change in the company’s name and intimate them to change the name in the records as well. The concerned parties with which the company has entered into a deal, or where it has made an investment or taken loans, insurance policies from; shall also be informed about the change.
- Get the name updated with basic utility services such as telephone and electricity service providers.
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 on Changing Company Name
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.
