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When choosing a name for a company, it is important to carefully consider its identity for the entire duration of its existence. The name should be chosen in a way that ensures it can adapt and remain sustainable as the company grows in the future. The process of naming a company, from the initial selection to any subsequent changes, is governed by the Companies Act. This article provides a brief overview of the dos and don'ts when selecting a name, as well as the procedure for changing it.
Name: The Company's Identity
The Companies Act 2013 sets out the guidelines for naming a company, whether it is Private Limited, OPC, or Public Limited. The following considerations must be taken into account when choosing a company name:
- The MCA ensures that the proposed name is not similar to any existing registered company or trademark. Simply combining separate words or using the plural form of an existing name does not make it unique.
- Names that are too general, like "Cotton Company Private Limited," are restricted by the MCA.
- Company names cannot begin with a person's name, for example, "Ankita Private Limited."
- The proposed name will be considered undesirable if it violates the Emblem & Name Act or infringes on trademarks, includes offensive or misleading words.
- The chosen company name should reflect the company's objectives.
- If the company is involved in financial services like chit funds, financing, leasing, etc., its name should indicate such activities.
- The name should not contain terms indicating any legal entity such as LLP, Trust, HUF, etc.
- A Private Company should end its name with Private Limited, an One Person Company with OPC Private Limited, and a Public Company with Limited.
Rules Under the Companies Act for Naming a Company
Here is the detailed procedure that a Company must follow if it wishes to change its name:
Conducting a Board Meeting: The directors of the Company discuss the proposed name. A 7-day notice is issued to convene the board meeting for passing the necessary resolution to approve the name change. The following resolutions are passed during the board meeting:
To authorize either the Company Secretary or a Director to apply to the ROC to confirm the availability of the selected name.
To schedule the date, time, and venue for an Extraordinary General Meeting (EGM) to approve the new name after it has been approved and for amending the Memorandum of Association (MOA). The Company must ensure that no two companies can be registered with the same name.
Checking Name Availability: The Company must verify the name's availability through the MCA. It can be checked if the same name is registered as a trademark or a company from the drop-down menus of "Public Search of Trademark" and "Check Company Name".
Online Application for Name Approval: Once the name is confirmed to be available, it can be applied for through the new web service RUN. Up to two names can be applied for using this form, with a prescribed fee of INR 1000. In the case of a name change, the Company must attach the board resolution authorizing the change to this form. After a thorough review, the ROC will either approve the name or request resubmission. The name approved by the ROC is valid for 20 days from approval.
Conducting an Extraordinary General Meeting: Once the name is approved by the ROC and the name approval letter is received, the Company must convene an EGM to pass the necessary Special Resolution for the name change approval and amend the MOA & AOA.
Filing with the ROC: Within 30 days of the EGM, file the special resolution with the ROC in form MGT-14 (available on the official MCA website as a downloadable zip file), along with the following documents attached:
Certified True Copy (CTC) of the Special Resolution passed
EGM Notice along with an explanatory statement
Amended MOA
Amended AOA
Central Government Approval: The Company must obtain Central Government approval for the name change and MOA alteration by filing form INC-24. A copy of the EGM minutes with the passed Special Resolution must be attached to this form.
New Certificate of Incorporation: Upon completion of the name change process, the ROC will issue a new COI with the updated name. The new name becomes effective upon the issuance of the new COI.
The Procedure for Changing the Name of a Company
Under Rule 29 of Companies Rules 2014, certain companies are prohibited from altering their names:
Companies that have failed to submit an annual return promptly
Companies with outstanding matured deposits
Companies that have defaulted on repaying matured debentures
Companies that have not paid or have defaulted on paying interest on deposits or debentures
Restrictions on Changing the Name of a Company
Before deciding on a name for a company, it is important to carefully consider that the name will be its identity for the entire duration of its existence. The name should be chosen in a way that allows it to endure and remain relevant as the company grows in the future. The process of naming a company is regulated by the Companies Act, starting from the initial selection of the name to any subsequent changes that may be made.
The Companies Act of 2013 establishes the requirements for naming a company, whether it is a Private Limited, One Person Company (OPC), or a Public Limited company.
Summary
Can changing Companies name has any Import on it?
Changing of existing name doesn't have any impact on the legal identity of the Company. Changing the name is not creating a new entity. The changed name doesn't
Affect the existing rights of Companies
Affects the legal proceedings against the Company pending in the old name
Affects the legal proceeding initiated by the Company in the old name.
Can the name approval letter be sustained after the expiry of the time limit to file a resolution with ROC?
What can be the reasons in general for a name change?
What is the expected time taken to complete the process of the name change?