CHANGE IN NAME CLAUSE

 

NAME – AN IDENTITY OF THE BUSINESS:

The name of the Company is the identity of the business all through its run or time, subsequently, it ought to be thought out well before enlisting in such a way that the name of the company can remain manageable with the development and improvement of the Company. The naming system for the Company is controlled by the Companies Act, right from picking it up to any progressions or adjustments made from that point. Certain do’s and don’ts while picking the strategy to change the name made sense in this article.

Applicability of the Companies (Incorporation) Second Amendment Rules, 2020 on the Change of name of the Company:

CHANGE IN NAME CLAUSEAs indicated by Rule 29 (1) of the Companies (Incorporation) Second Amendments Rules, 2020, a company that has neglected to record the Yearly Returns and the fiscal summaries with the ROC (Registrar of Companies) is limited from changing its name. Besides, a company who has not paid or reimbursed developed debentures or stores or interest consequently isn’t qualified to change its name.’

DOCUMENTS REQUIRED FOR CHANGE COMPANY NAME IN INDIA:

 

The essential documents expected for changing the Company Name in India are as per the following:

  • Digital Signature Certificate of one of the authorized directors to be provided;
  • A copy of the latest amended Memorandum of Association and Articles of Association of the company;
  • Certificate of Incorporation of the company to be provided;
  • Copy of PAN card of the company should be provided;
  • Complete Minutes of the member’s meeting.

 

THE PROCESS OF CHANGING THE COMPANY NAME:

  • Board Resolution

A Board meeting should be met to pass a resolution for a change of name of the company and to approve a Director or Company Secretary to make an application to the MCA for finding out the availability of the proposed name. At a similar Board meeting, a resolution to assemble an extraordinary general meeting for changing the name of the company, and altering the Memorandum of Association and Articles of Association can likewise be passed.

  • Name Availability

The approved Directors or Company Secretary is expected to apply in the RUN form to the Ministry of Corporate Affairs to take a look at the availability of the name and endorse the name of the company. This cycle is equivalent to the interaction that is taken on at the hour of starting name approval of the company.

The registrar of Companies will send a letter expressing that the proposed name by the individuals is accessible. If it’s not too much trouble, note that this won’t be considered the last approval of the company name, it is essentially a confirmation from the Registrar of Companies that the proposed name is accessible.

The name proposed ought not to be like some other existing company name, and it should exclude ” state.” The other fundamental circumstances existing at the hour of starting name approval additionally exist in this present circumstance.

  • NOTICE FOR EGM AND PASSING OF INDIVIDUALS RESOLUTION FOR CHANGING THE NAME OF THE COMPANY

At the point when the name is supported by CRC the company ought to call an EGM to pass an extraordinary resolution for changing the name of the company. The board needs to then give a notification to all Investors, Directors, and Partners of the company as per Section 101 of the Companies Act 2013. It ought to go with an explanatory statement (102) expressing the purposes behind the adjustment of the name with the interest of the directors. The notification ought to be given something like 21 days before the meeting. On the off chance that 95% of the investor’s assent, EGM can be led on more limited notice.

The following resolutions must be passed at the Meeting:

  • Change of name of the Company and alteration of MOA and AOA of the company subsequently.
  • If the name is changed due to a change in the business activity or the object of the company then the main object in MOA also has to be changed.
  • The liability clause of the MOA has to be amended.
  • Delete any other object in the object clause of the MOA of the company.
  • New AOA and MOA have to be adopted which are consistent with the Companies Act 2013.
  • Applying to Registrar

A special resolution is expected to be recorded with the Registrar of Companies within something like 30 days of passing the special resolution. With the passed resolution, Form MGT-14 ought to likewise be recorded which contains the total insights concerning the previous special resolution in the extraordinary general meeting.

The following reports are expected to be submitted with MGT-14:

  • The altered Memorandum of Association;
  • The altered Articles of Association;
  • Notice of the Extraordinary General Meeting;
  • Explanatory statement to the Extraordinary General Meeting;
  • A certified true copy of the Special Resolution;

When Form MGT-14 is documented, the company is expected to record form INC-24 with the Registrar of Companies to take approval from the central government to change the company name alongside the charges recommended for something very similar.

Form INC-24 is expected to be recorded after form MGT-14. Since form INC-24 explicitly requests the SRN of MGT-14 form document with the Registrar of Companies. SRN of RUN is likewise expected to be referenced in form INC-24. Alongside form INC-24, a duplicate of the minutes of the Extraordinary General Meeting where a special resolution was passed, likewise should have been submitted.

In form INC-24, explanations behind the change of company name, insights regarding the absolute number of individuals who went to the Extraordinary General Meeting, the complete number of individuals casting a ballot in favor or against the special resolution, and the all-out level of shareholding is likewise expected to be referenced.

  • Issuance of New Certificate of Incorporation

If the Registrar of Companies is happy with the company name change application, the Registrar would give another approval for joining. It is vital to take note that the company name change is supposed to be finished and powerful on the issuance of a new incorporation testament by the Registrar of Companies.

RESTRICTION ON CHANGING THE NAME OF THE COMPANY:

Rule 29 of Companies Rules 2014 explicitly disallows the accompanying companies from changing their name:

  • A company that has defaulted to file an annual return on time
  • A company that has defaulted in repaying matured debentures
  • Company has not paid or defaulted in paying the interest on deposits or debentures
  • The Company which has failed to repay the matured deposit

FAQs:

Que: Is there any form by which names can enforce consolidated like in the SPICe form?

Ans: No, the name has to be allowed in case of a change of name of an existing Company through RUN as it were.

Que: Might the name approval at any point letter be valid after the expiry of as far as possible to document a resolution with ROC?

Ans: The name supported by ROC stays valid for 20 days within which the special resolution will be passed, and recorded else the approval letter becomes void.

Que: How long does it generally take to change the company name in India?

Ans: It as a rule takes around 15 to 20 working days altogether to change the company name on the Companies register in India as approval by ROC differs relying on state to state.

Que: Imagine a scenario where for a situation of any explanation the held name of the company gets lapsed.

Ans: In such a case the company name must be re-applied. Further, it is generally recommendable to join the past name approval letter that got lapsed.

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