Change in the Name of the Company: Step By Step Procedure

Changing the name of a company is a common phenomenon in the world of business. A company may decide to change its name for many reasons likewise a change in ownership, rebranding, or to better reflect its goods/ services. However, the process of changing company’s name includes certain legal formalities that require to be followed to make sure the changes is identified by the appropriate government authorities and stakeholders. In this article, we will discuss about the procedure of changing in the name of the company that may vary upon the jurisdiction and company type.

Do you want to change your Company Name after its Incorporation?

A company’s name is one of its most critical assets. It’s how clients, shareholders, and stakeholders recognize and interact with the organization. It’s also one of the most visible components of a company’s brand. In some cases, however, a company may decide to change its name. The Companies Act, 2013 governs the process of changing a company’s name in India.

Also, company’s name is its identity, and changing it is a significant decision that requires careful consideration. There may be several reasons why a company may want to change its name. It could be due to rebranding, mergers, acquisitions, or even to reflect a change in the company’s focus or direction. Whatever the reason may be, the Companies Act, 2013, lays down certain procedures and requirements that need to be followed when changing a company’s name.

Reasons for changing the name of the Company

There are several reasons why a company may choose to change its name. One of the most common reasons is that the existing name no longer represents the company’s core values or mission. Another reason may be a change in ownership, which may require a new name to reflect the new leadership. A company may also want to change its name to rebrand itself or to enter into a new market segment.

The reasons for changing a name of the company can also depend upon of various reasons such as: –

• One has changed their goods or industry
• Name suffering from confusion in brand
• When the name is creating or misleading the confusion among consumers
• Disliking the name
• It’s an inherited name and one is nor willing to continue with it
• When the name is too long or too short

There can Change the Company’s name in the following manners:-

• Company name change from PQR Limited to ABC Limited
• Conversion of the Company Public to Private
• Conversion of the Company Private to Public

Changing the name of a company shall not affect the legal status, rights, or obligations of the company or its members. The company’s existing contracts, agreements, and other legal obligations will continue in the same manner and will not be affected by the change of name. The change of name does not affect the company’s structure, management, or ownership. 

The company will retain its existing registration number, and all the assets and liabilities of the company will remain the same. However, it is important to ensure that all legal compliances related to the name change are fulfilled to avoid any legal issues in the future.

 Section 4 of the Companies Act, 2013

This is a significant provision that shows the Memorandum of Association (MOU) of a Company. The MOU is a legal document, which is having the fundamental situations on that a company is incorporated. The following are the important provisions of Section 4:

• Memorandum of Association: The section specifies that every company must have a MOU which shall be in a prescribed form.
• Contents of Memorandum: The memorandum of association must contain the name of the company, its registered office, the objects of the company, the liability of its members, and the amount of share capital with which the company is being registered.
• Alteration of Memorandum: The section also lays down the procedure for alteration of the memorandum of association. Any alteration to the memorandum of association must be made by passing a special resolution in a general meeting of the company and with the approval of the Central Government.
• Effect of Alteration: The alteration of the memorandum of association will only be effective upon the issue of a fresh certificate of incorporation by the Registrar of Companies. 

Overall, Section 4 of the Companies Act, 2013 provides for the essential requirements for the memorandum of association of a company and the procedure for altering it. The memorandum of association is a crucial document for a company as it sets out the fundamental conditions upon which the company is incorporated and operates.

Documents required for Changing the Name of a Company

The documents required for changing the name of a company may vary depending on the jurisdiction and type of company. However, the following is a general checklist of the documents that may be required for changing the name of a company:

• Application for name change in the prescribed form
• Copies of the special resolution authorizing the name change
• The Copy of the existing memorandum and articles of association
• Copy of the new memorandum and articles of association with the proposed name
• The Copy of the minutes of the board meeting approving the proposed name
• Copy of the notice of the general meeting with the proposed name
• The Copy of the fresh certificate of incorporation with the new name
• Copy of the updated PAN card, GST Registration Certificate, and other legal documents with the new name
• Bank letter requesting the bank to change the name of the account holder
• Updated letterheads, business cards, and other stationery with the new name

Procedure for Name Change of a Company

The procedure for changing the name of a company under the Companies Act, 2013 in India involves the following steps:

• Conduct a Board Meeting: The first step is to convene a board meeting and pass a resolution to recommend the proposed name change. The board resolution should authorize the company to file an application for name approval with the Registrar of Companies (ROC).
• Check Availability of the New Name: The next step is to check the availability of the proposed name by searching the name availability database on the Ministry of Corporate Affairs (MCA) website. The new name should not be similar or identical to the name of any other company or trademark.
• Pass a Special Resolution: After the name approval, the company must pass a special resolution in a general meeting of shareholders to approve the name change. The notice for the general meeting must be sent to all shareholders, directors, and auditors at least 21 days before the meeting.
• File the Required Documents: After passing the special resolution, the company must file an application for name approval with the ROC along with the required documents, including a copy of the board resolution, the special resolution, the new memorandum and articles of association, and a copy of the name approval letter.
• Obtain Approval: The ROC will review the application and documents and may request additional information or clarification. If the ROC is satisfied, it will issue a new certificate of incorporation with the new name. The name change becomes effective from the date of issue of the new certificate of incorporation.
• Update Legal Documents: The company must update all its legal documents, including PAN card, GST registration, bank account, letterheads, and business cards with the new name.
• Notify Stakeholders: The company must also notify its stakeholders, including customers, suppliers, vendors, and government agencies, about the name change.

Post Company Name Change Compliance

After changing the name of a company, the following compliance requirements must be fulfilled:

• Update the New Name: All legal documents, including the Memorandum and Articles of Association, share certificates, bank account, PAN card, GST registration, and other registrations or licenses, must be updated with the new name.
• Update the Company’s Website: The company’s website, if any, must also be updated with the new name, and all online platforms where the company has a presence should also be updated accordingly.
• Notify Banks and Financial Institutions: The company must inform all banks and financial institutions with which it has accounts or dealings about the name change and submit the necessary documents for updating their records.
• Inform Customers, Vendors, and Government Agencies: The company must inform its customers, vendors, and government agencies, including the tax authorities, about the name change.
• Amend Contracts and Agreements: All contracts, agreements, and other legal documents entered into by the company in its old name must be amended to reflect the new name.
• Update Stationery: The company must also update all its stationery, including letterheads, business cards, envelopes, invoices, and other printed material, with the new name.
• Update Advertising and Marketing Material: All advertising and marketing material, including brochures, pamphlets, and other promotional materials, must also be updated with the new name.

How can Compliance Calendar help?

A compliance calendar can be helpful in ensuring that all the post-name change compliance requirements are fulfilled within the required timelines. A compliance calendar is a tool that helps to track and manage regulatory compliance deadlines and other obligations.

A compliance calendar can help in the following ways:

• Reminds of Compliance Deadlines: A compliance calendar can be set up to send reminders of upcoming compliance deadlines, such as filing annual returns, tax payments, or other regulatory filings.
• Helps in Planning: A compliance calendar can help in planning the activities and resources required for fulfilling compliance requirements, such as updating legal documents or notifying stakeholders.
• Minimizes Risks: A compliance calendar can help minimize the risk of non-compliance with regulatory requirements, which can result in legal penalties, fines, or reputational damage.
• Provides a Single Source of Truth: A compliance calendar can act as a single source of truth for all compliance requirements, helping to ensure that all relevant information is organized and accessible in one place.
• Improves Communication: A compliance calendar can improve communication between different teams or departments within the company, helping to ensure that everyone is aware of compliance requirements and timelines.

Overall, a compliance calendar can be a useful tool for ensuring that all post-name change compliance requirements are met in a timely and efficient manner, reducing the risk of legal issues and improving the overall compliance posture of the company.

Takeaway

Changing the name of a company can be a relatively simple process, but it is important to ensure that all legal compliances are fulfilled to avoid any legal issues in the future. The procedure for changing the name of a company under the Companies Act, 2013 involves obtaining board and shareholder approvals, filing the necessary documents with the Registrar of Companies, and updating legal documents, licenses, and registrations. After the name change, it is important to fulfil post-name change compliance requirements, as mentioned above.

It is advisable for consulting with a legal professional or corporate services provider of the Legal Window and using a compliance calendar can be helpful in navigating the name change process and ensuring compliance with all relevant laws and regulations.