Change in Company Name

Changing a company’s name is a strategic move that companies may undertake for rebranding, business diversification, or to reflect a shift in their mission or industry. This process is governed by the Companies Act, 2013, and involves securing shareholder approval, amending the Memorandum of Association (MOA), and updating company records with the Registrar of Companies (ROC). The process requires careful adherence to statutory regulations to ensure a smooth transition without interruptions to business operations.

Purpose of Changing Company Name

  1. Rebranding: Companies often change their names to revamp their brand identity and attract new customers.
  2. Business Expansion: When a company diversifies its products or services, a name change may reflect the new business direction.
  3. Mergers and Acquisitions: Companies acquired by other firms may change their names to align with the new parent company’s identity.
  4. Compliance with Legal Requirements: Sometimes, a name change is required to resolve trademark conflicts or comply with regulatory requirements.
  5. Market Repositioning: Changing the company name can also help reposition the company in the market to better represent its current or future goals.

Compliance Requirements for Company Name Change

  1. Board and Shareholder Approval:
  1. The board must pass a resolution approving the proposed name change.
  2. A special resolution must also be passed by the shareholders in a general meeting.
  3. Availability Check and Name Reservation:
  1. The proposed new name should be unique and must comply with the naming guidelines as per the Companies Act, 2013.
  2. Submit RUN (Reserve Unique Name) application to the Ministry of Corporate Affairs (MCA) portal to check and reserve the new name.
  3. Amendment of MOA and AOA:
  1. Amend the company’s Memorandum of Association (MOA) and Articles of Association (AOA) to reflect the new name.
  2. The amended MOA and AOA must be filed with the ROC as supporting documents in the name change application.
  3. Form Filing with ROC:
  1. File Form MGT-14 to record the special resolution for the name change.
  2. File Form INC-24 for ROC approval of the new name, attaching the required documents such as the special resolution and amended MOA.
  3. Update Other Registrations:
  1. Post-approval, update the company name in all relevant licenses, tax registrations (like PAN, TAN, GST), bank accounts, and agreements.
  2. Notify customers, vendors, and stakeholders to avoid any confusion.

Process for Changing Company Name

  1. Board Meeting:
  1. Convene a board meeting to discuss the name change proposal.
  2. Pass a resolution to authorize a representative to file necessary forms with the ROC.
  3. Name Reservation through RUN:
  1. Use the MCA’s RUN service to check the availability of the desired name and reserve it.
  2. Ensure that the new name adheres to naming guidelines, avoiding prohibited terms and trademarked names.
  3. Shareholder Approval:
  1. Hold an Extraordinary General Meeting (EGM) to secure shareholder approval.
  2. Pass a special resolution and document it for submission with Form MGT-14.
  3. File Forms with ROC:
  1. File Form MGT-14 within 30 days of passing the resolution, attaching the board resolution and updated MOA/AOA.
  2. File Form INC-24 to obtain the ROC’s approval for the name change. Attach the updated MOA, AOA, and a copy of the special resolution.
  3. Obtain New Certificate of Incorporation:
  4. Once approved, the ROC will issue a new Certificate of Incorporation with the updated name. This certificate legally recognizes the name change.
  5. Update Business Records and Communicate Change:
  1. Update the new company name in all records, including licenses, permits, bank accounts, and contractual agreements.
  2. Communicate the name change to clients, customers, vendors, and stakeholders via official notifications.

Key Documents Required

  1. Board Resolution: Document of the resolution passed by the board for the name change.
  2. Special Resolution: Copy of the special resolution passed in the general meeting, certified by the chairman.
  3. Amended MOA and AOA: Updated MOA and AOA reflecting the new name.
  4. RUN Application Confirmation: Name reservation confirmation from the RUN application.
  5. Form MGT-14: Filed to record the special resolution with the ROC.
  6. Form INC-24: Primary form to request the ROC to change the company name, including the fee and supporting documents.

Benefits of Changing Company Name

  1. Enhanced Brand Identity: A new name can better reflect a company’s brand, values, or new vision.
  2. Market Adaptation: Aligns the company with evolving market trends and customer preferences.
  3. Improved Reputation: A new name can improve reputation and build trust if the company faced previous issues with its old name.
  4. Compliance: Ensures the company avoids legal issues arising from name disputes or regulatory non-compliance.
  5. Business Growth: New names that reflect a diversified business model can attract a broader customer base and investors.

Penalties for Non-Compliance

  1. Late Filing Penalties: Delays in filing the required forms (MGT-14 and INC-24) may result in penalties and additional fees.
  2. Legal Issues: Operating with an unregistered name can lead to legal complications, including fines and regulatory action.
  3. Operational Disruptions: Failing to update licenses, bank accounts, and contracts with the new name can create confusion, delays, and financial issues.

Timeline for Name Change Process

  • Estimated Duration: 30-45 days, subject to document preparation and ROC processing times.
  • Form Filings and Approvals: Each stage has a fixed timeline, with delays leading to additional costs and penalties.

Cost of Changing Company Name

  1. Government Filing Fees: Charges for Form MGT-14, INC-24, and name reservation fees with MCA vary based on the company’s authorized capital.
  2. Professional Fees: Legal and consultation fees range from ₹5,000 to ₹15,000 for documentation, filings, and handling the process.

Changing a company’s name involves a structured process that requires approval from the board, shareholders, and the ROC. Proper documentation, adherence to timelines, and compliance with regulatory requirements are crucial to a successful name change. A well-executed name change can enhance the company’s brand value, facilitate growth, and strengthen its market position