How Does Changing Your Company Name Work For You?
The change of name of a company cannot go on without complying the requirements for
choosing a company name set by the Registrar of Companies.
What Does Changing of Name Mean To a Company?
As per the provisions in Section 13 of the Companies Act of 2013, a company may change its name by simply passing a resolution in its general meeting. But, approval from the Central Government and updating with the Registrar of Companies (RoC) is necessary for the change to come into effect. Also, the Articles of Association and the Memorandum of Association of the company go through a significant alteration.
However, please note the following points related to the changing of name by a company-
- The change of name, by no means, shall affect any rights/obligations of the company and any legal proceedings continued against/by the company in its former/new name.
- However, the commencing of any fresh legal proceedings against the company in the former name is not valid, after the new name has been registered by the Registrar of Companies (RoC). The company in its old name should be treated to be non-existent. However, the new name can be substituted by amending the plaint.
- The legal proceedings commenced by the company in its old name can be continued under the new name.
- The entity of the company continues despite the change in name.
What are the Benefits of Changing a Company Name :
When You Can’t Get A Copyright
Acquiring copyright and trademark is essential to the success of a business as these are integral parts of its branding and marketing strategies. If the company cannot get the copyright for its present name, it will affect the revenue streams and future earning potential of the company. Therefore, if the company is struggling to get a copyright for an existing name, it can very well consider changing the company name. For new names, the company needs to check the company name availability with the Ministry of Corporate Affairs (MCA), before it proceeds to change the company name.
Memorable Business Name
You may have heard the catchphrase, “What’s in a name?”, many times. Well, when it comes to marketing and business standpoint, ‘everything lies in a name’. The name of your business or company is the first thing people often mention while talking about it. So, if you think your company name is not causing people to take notice of it, you can change it to a different one, to strike the right chord with your potential customers. Choose a name that is easy to remember.
Changing the company name or a brand’s name, especially when your business is ready to move into a new market, helps in the repositioning of the brand/company. This is done to focus on one particular product or niche that is doing better than the others, or when entering a new market.
Specific Product Or Service
Sometimes, a business gains popularity for one particular product or service. In such a situation, the business or the brand can be renamed to capitalize on its popularity and generate more demand or sales.
Location Friendly Name
If your business is moving to a new location then it would be prudent to rename your business to something more friendly and acceptable with the new locality.
Change Of Ownership
When a business passes on its ownership, it is only natural for the new owner to change the company name. The new owner may want to come out of the legacy of the previous owner. A new name would also help the new owner to ‘stamp his authority’ on the business and also to give a whole new direction to the business.
What Is The Procedure To Change A Company Name?
The step-by-step procedure of changing a company name is described below-
Passing A Board Resolution
In the first step, the company needs to call a board meeting and pass a resolution to change the company name. The directors should approve the new name and authorize either a director or a company secretary (CS) to check the availability of the new name with the MCA.
Checking The Name Availability
One of the most important steps before registering a company name with the Registrar of Companies (RoC) is to check the company name availability. For this, the authorized director or the CS should apply to the MCA in form INC-1 for checking the availability of the proposed name and subsequent approval. In case the proposed name is available for use, the company will get a letter from the RoC. But, this is not the final approval for the change of name.
To check the company name availability you can also click the following link, and it will check that particular name with the MCA portal and the trademark databases.
It is advised that you should shortlist four to five business names before checking the availability, to cover for the event of these names being taken or in use already.
Passing Special Resolution
Once the availability of the new name is confirmed by the RoC, the company should convene an extraordinary general meeting. A special resolution will be passed by the meeting for changing the name and making appropriate changes to the Articles of Association and the Memorandum of Association.
Applying To The Registrar
The special resolution will be submitted to the RoC within 30 days of passing, along with the form MGT-14, which will contain the details related to the special resolution.
Within 30 days of filing the MGT-14, another form, namely, INC-24 needs to be filed with RoC as well, along with the requisite fee. This is required for obtaining approval from the Central Government for the change in name. Certain documents also need to be enclosed with these two forms.
Issuance Of The Certificate Of Incorporation
Upon being completely satisfied with the application and the accompanying documents, the RoC will issue a new Certificate of Incorporation, reflecting the change in name.
What Are The Documents Required For Company Name Change?
The following documents are needed to accompany the MGT-14 and INC-24 forms-
- MGT-14: This e-form can be filed with the Registrar of Companies on the Ministry of Corporate Affairs portal. Along with the MGT-14 form, the following documents have to be submitted as well.
- Notice of the Extraordinary General Meeting (EGM).
- Certified copy of the special resolution passed in the EGM.
- The explanatory statement to EGM
- Copy of altered Memorandum of Association (MoA) and Article of Association (AoA) with the new company name.
- INC-24 – After the MGT-14 is approved, the INC-24 e-form is filed within 30 days with the Registrar of Companies on the Ministry of Corporate Affairs portal. Along with the INC-24 form, the following documents have to be attached as well.
- A certified true copy of the Minutes of the EGM of the company
- Notice of EGM
- Copy of any approval order received from other authorities such as IRDA, SEBI, RBI, etc, if any.
- Copy of resolution agreement, along with the mention of the members voting for and against the resolution
- Copy of altered MoA and AoA, with the new company name.
- Any other documents regarding any other information sought to be provided, as optional attachments
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