Company

Changing the name of a company

In terms of section 21, a company (public or private) may change its name by getting the approval of members by a special resolution and the approval of the central government.

Manner of making change in name

Change in name means change in the existing name of the company. The change may be made in any of the following ways :

(a) Changing the name of an existing company by a new name.

(b) Changing the existing name by the abbreviated name.

(c) Changing the name (rectification of the name) on the direction of the central government pursuant to section 22.

(d) Deletion or addition of the word “Private “ in the name.

The first two types of changes need the approval of the central government (Registrar of Companies) in addition to the approval of members by a special resolution. The third requires the approval of the central government

The Procedures for first two changes

The company name changing involves four stages as under :

(i) Consideration by the board and resolution to get approval of registrar for availability of name.

(ii) In general meeting, the approval of the company is by special resolution.

(iii) Central Government approval

(iv) Post-approval registration formalities

Consideration by the board

It is for the reasons for making the change in name. A company may change their name by a new name that is related to a new business.

Approval of the general meeting

The general meeting will be held as per the notice and the approval of members will be taken by a special resolution. It is desirable that the general meeting should be held first as copy of the resolution passed by members . It shall be sent with the application to the Registrar of Companies.

Central Government approval

As already stated the power under section 21 has been delegated to the Registrars of Companies. The application will be made in the Form 1B explaining the reasons for change.

Consideration by the Registrar

It has been seen from experience that the following documents may be required to be sent along with the application for approval of change in name.

(i) Memorandum of Association (MOA)

(ii) Copy of the audited balance sheet and profit and loss account for last 2 years.

(iii) Certified copy of the special resolution passed by the shareholders along with the explanatory statement with indication of the date of filing of the same with the Registrar of Companies.

(iv) Where the change in name is due to the alteration of the objects in terms of section 17 of the act, whether copy of resolution has been registered with the ROC.

The following actions will be taken by the company :

Changing the name of a company

(a) The explanatory statement with the Registrar and special resolution of certified copy with the registrar within 30 days of passing of the resolution pursuant to section 192.

(b) Request the registrar to provide a new certificate of registration. Under section 23, the registrar shall file the new name on the register in place of the old name. The registrar provide the new certificate of your registration.

(c) Also request the Registrar to make necessary correction in the Memorandum and Articles.

(d) After obtaining the fresh certificate of incorporation, make necessary changes in all records.

Change of name on the direction of central government

The central government may come to know that the company name on first registration or another company. The latter company may bring the above fact to the notice of the government. In terms of section 22(1) (b) of the act, the central government is required to give the direction within 12 months of the company registration  or by a new name as given below :

Violation of a registered Trade Mark or the applicant of a Trade Mark

Where the owner of a registered Trademark or the applicant for Trade Mark is of opinion that the company name infringes his Trademark. The said owner may make an application to the government within 5 years of coming to know of the said infringement.

Direction on government to give reason

It has been held by the courts that when the central government (that is the regional director to whom the power under section 22 has been delegated vide GSR No. 288(E), dt. 31-5 -1991) chooses to exercise the power under section 22.

Time within which the central government should act

The power of the central government in respect of cases of the first nature should be exercised within 12 months of the company registration or registration by a new name. In the case of violation of a Trademark, the owner of Trademark must apply to the central government before expiry of 5 years of coming to notice of the company registration in question.

Existing companies with almost “similar” names directed to change name

It was seen that a new company with almost a similar name as that of an existing company registered in West Bengal was allowed to be registered in Tamil Nadu after the new company obtained and produced no-objection. The registration of the two companies was objected to by the West Bengal based companies. After considering the matter, the regional director, within 12 months of registration, directed the two companies registered in Tamil Nadu to change their names in terms of section 22(1).

Period of 12 months in section 22(1) (b) mandatory

In terms of section 22(1) (b) the central government is required to give the direction for rectification of the name of an existing company within 12 months of the date of its first registration or of the date of registration by a new name.

Change in name by deletion/addition of the word “PRIVATE”

The above change will become necessary when a private limited company is converted into a public limited company or vice-versa. For making this change, the initial support of the company in general meeting is necessary by way of a special resolution. In terms of section 21, the prior approval of the central government is not needed. But addition of the word “Private” to a name means that a public company is being converted into a private company to a name means that a public company is being converted into a private company.

After getting the special resolution passed, the following actions shall be taken :

(i) File certified copy of the particular resolution with informative statement and the fees with the Registrar of Companies.

(ii) Make application for conversion of a public limited company to private.

(iii) Request the registrar to issue a new registration certificate and also obtain the memorandum and articles corrected by the registrar.

Corpstore Business Solution is one of the leading consultants in Coimbatore, to register all the business entities in all major cities like Salem, Madurai and Chennai. 

 

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