Any shareholder may agree to change the name of a limited business for any reason. The name may be changed at any time and for any cause, but only with the consent of all shareholders. Any number of factors, including management changes, conversion from private limited to public limited, changes in the company’s vision and mission, and others, may be to blame. Here, we’ll talk about the Companies Act, 2013, clause that addresses changing a limited company’s name.
Provisions for Changing the Name of a Limited Company in India
Let’s start by going over the basic guidelines for the company’s name change, which are as follows:
Sections 13(2) and 13(6) allow a corporation to change its name with the Central Government’s written authorization and the use of a special resolution. However, if the business’s name is changed in relation to the inclusion or deletion of the word “Private,” which will cause the company to transition from Private to Public and vice versa, the Central Government’s approval is not required.
Section 13(3) – The Registrar must update the former name of the company in the register of companies when the name of the company is changed pursuant to Section 13(2). In addition, a new certificate of incorporation with the new name must be issued by the registrar. Until a new certificate of incorporation is obtained, such name changes for the company are incomplete and ineffective.
Section 4(2) – The items covered by this section should be taken care of are. The company name stated in the memorandum must be distinct from any other existing company with a name that is registered under the Company’s Act or any company law that existed prior to the Company’s Act. The company name indicated in the memorandum shall not be one that, if used, would constitute a violation of any legislation in force at the time. The Central Government shall not consider the company name indicated in the memorandum to be undesirable.
Section 4(3) states that a company may not be registered with a name that contains any words or expressions that are likely to suggest that the company is connected to, associated with, or receiving support from the federal government, any state government, any local authority, any corporation, or any other individual or entity created by a state or federal government in accordance with the law in effect at the time.
Section 16(1) – Provides for Name Change of the Company Due to Rectification.
If the name or new name under which a company has obtained registration or reregistration is identical to the name of another business that already exists or that has been registered under the company’s act or another law in effect in the past, the company must change its name. The federal government also issues instructions to change the company’s name. In some situations, the instructions must be carried out within six months of the day they were issued.
All About Limited Company Name Change (Provisions & Procedure) If the name or new name under which a company has obtained registration or reregistration is identical to the name of another business that already exists or that has been registered under the company’s act or another law in effect in the past, the company must change its name. The federal government also issues instructions to change the company’s name. In some situations, the instructions must be carried out within six months of the day they were issued.
Section 16(2) – The firm must notify the registrar along with the central government order when changing its name or obtaining a new name pursuant to Section 16(1). The notice must be delivered within 15 days of the change’s effective date. Because he is in charge of carrying out the amendments to the memorandum and certificate of incorporation, the registrar must be informed of the modifications.
The corporation that is found to be in violation of the central government’s directives is subject to punishment and a fine under Section 16(3). The fine may increase to Rs. 1000 every day if the default continues during that time. A fine of between Rs. 5000 and Rs. 1,00,000 will also be assessed against officers who are in default.
Forms to Be Filed in India for the Effectiveness of the Company’s Name Change Chapter 13 (6)
- If the modifications have been made to the company’s memorandum or name,
- the special resolution adopted by the company pursuant to Section 13(1) in Form MGT-14 and approved by the Central Government pursuant to Subsection (2) must be filed with the registrar by the company.
Rule 29(2) of the Companies (Incorporation) Rules 2014 states that:
- For a name change of the company, an application in Form No. INC-24 must be submitted along with the required fee.
- The firm that has changed its name will receive a new certificate of incorporation in Form No. INC-25.
Limited Company’s Name Change in India → Extra Obligations for Listed Companies
- Regulation 45 of the SEBI (Listing Obligations And Disclosure Requirements) Regulation, 2015, Extra Obligations for Listed Companies, Limited Company’s Name Change. when the listed firm changes its name as a result of the introduction of any new business line.
- The company must individually disclose in the financial conclusions its net sales/income, expenses, and net profit/loss (after tax) related to the declared new line of activity. These distinct disclosures must be kept on file for three consecutive years following the name change. Additional requirements for all listed companies that change their names
- A minimum of one year must have passed since the last name change to qualify. The new activity suggested by the new name should have accounted for at least 50% of the company’s total revenue in the previous year, or the investment in the new activity or project (Fixed Assets + Advances + Work in Progress + Inventory + Investments & Trade Receivables + Cash & Cash Equivalents) should represent at least 50% of the company’s assets.
- The term “advances” shall only refer to those that have been extended to contractors and suppliers for the performance of projects associated with new activities or projects, as indicated by the new name. The corporation must present an auditor’s certificate to the stock exchange in order to assure compliance.
- For a continuous period of one year from the date of the company’s most recent name change, the new name must be announced along with the company’s previous name via the websites of the relevant stock exchanges where the firm is listed.
Procedure for Changing The Name of Limited Company in India
Arrange A Board Meeting.
A board resolution must be adopted to change the company’s name and authorise the director or company secretary to submit an application to verify the proposed name’s availability. It is also possible to pass the resolution to call an EGM to change the name in the Articles of Association and Memorandum of Association at the same board meeting, during the name change process, or at a new board meeting called after the new name has been approved.
Verifying that the Proposed Name is Available
By submitting an application to the MCA with a copy of the Board resolution adopted at the meeting, the authorised person, such as a director of the company or the company secretary, confirms the availability of the proposed name. The Companies Act of 2013’s Naming Guidelines govern this activity, and at the same time, it’s important to keep in mind the steps involved in forming a new business.
Through the web service RUN- Reserve Unique Name service, which is available on the MCA site, the proposed name may be reserved.
Call a special general meeting.
After getting MCA’s approval for a new name, an Extraordinary General Meeting is called to pass a special resolution authorising changes to the business name and their impact on the Memorandum of Association and Articles of Association. This action is governed by Sections 13(1), 13(2), 14, and 5(3).
Submitting a Special Resolution and Registrar’s Application
The following paperwork must be submitted to the Registrar of Companies in the following step:
The company’s extraordinary resolution pursuant to Section 13(1) of Form MGT-14. a request for a name change submitted in Form No. INC-24 together with the required cost for doing so.