Procedure Change Companies Act 2013: Under the Parliament of India initiative, the Companies Act was put into effect on August 29th of 2013, after reforming the Companies Act of 1956. It deals with incorporating companies, their responsibilities, and renewed features as a functional.
- Alteration of Company name under Companies Act, 2013
- The ways to Alter names under Companies Act, 2013
- Section 4 under Companies Act, 2013
- Section 16 under Companies Act, 2013
- Rule 29 under Companies Act, 2013
- Which Companies cannot alter names, according to the Companies Act of 2013?
- Steps to Alter Company names
The topic of modifying the name of a company is also included in the Companies Act, 2013. Through this process, any limited company can alter its names with the due consent of all members and directors. A solid reason has to be provided along with the necessary documents to complete the process of the name change.
Different sections of the Companies Act of 2013 are dedicated to aiding other purposes. For example, section 13 of the Act deals with an amendment in the Memorandum of Association, whereas Section 14 regulates Articles of Association.
Under the Companies Act of 2013, section 13 deals with the change of company names with the approval of the Central Government via a special resolution. After completing the process of incorporation, the company may change their names according to the ways listed below:
- Converting its name from Private to Public
- Converting its name from Public to Private
- Converting its name from XYZ limited to ABC limited
Note: The company with ‘Private’ attached to its name does not need the approval of the Central Government.
Topics to Consider under Subsection 2
- The name mentioned in the memorandum must match the name of any other existing company that is registered under the Company’s Act.
- The name mentioned in the memorandum must not create any offense under any effective laws.
- The name mentioned in the memorandum must not be unsuitable in the Central Government’s opinion.
Topics to Consider Under Subsection 3
- The company must not be registered with any name that indicates its connection to the patronage of the state government or central government, the local authority, or the corporation.
- A company needs to verify its new name that has been registered or re-registered.
- The new name must be unique and different from the name of any other company that exists already.
- The central government must rectify the company’s name.
- After changing its name, the company must notify the registrar (because he is responsible for changes in the incorporation certificate and the memorandum) and the central government order within 15 days from the verification date.
- Levying penalty up to Rs.1000 per day and Late Fine on defaulted companies as per the directions issued by the central government.
- Change of name should be prohibited to any company that has defaulted in filing the Annual Returns or Financial Statements or any other significant document with the Registrar.
- Any company that has defaulted in repaying the matured deposits or debentures or the interest on deposits cannot complete the name change procedure.
- Sub-section 3 under section 13 requires the process of filing an application in Form INC-24 additional to the fee for change in the company name.
- A fresh certificate of incorporation in Form INC-25 must be issued to the company right after the change of name.
Rule 29 under the Companies Rules of 2014 perfectly summarizes the rules applying to the prohibition of the process of the name change for companies that fall under the categories as mentioned below:
- Companies that have defaulted in filing an annual return in time.
- Companies that have failed to riposte matured deposits
- Companies that have defaulted in repayment of matured debentures.
- Companies that have not paid or have defaulted in paying the additional interest on debentures or deposits.
Step 1: Coordinating a Board Meeting
- The company must pass a board resolution to hold EGM for changing the company’s name (in the same board meeting or a new board meeting) and authorize the Director of the company or the Company Secretary to issue an application confirming the availability of the name proposed.
Step 2: Verifying the availability of the selected name
- Authorized persons such as the Director of the Company or Company Secretary shall confirm the availability of the proposed name by applying to the MCA along with the copy of the Board resolution passed in the meeting.
- Naming Guidelines under the Companies Act 2013 supervise this activity, and simultaneously the incorporation of any new company needs to be noted.
- The company can reserve the proposed name through the Reserve Unique Name web service available on the MCA portal.
Step 3: Congregating a General Meeting
- After receiving the approval of a new name from the MCA, the company should arrange a General Meeting to furnish a special resolution and reflect it on the Memorandum of Association and Articles of Association.
Step 4: Filing a Special Resolution and an Application to the Registrar
- The company should file the documents as stated below with the Registrar of companies:
- The special resolution legislated by the company u/s 13 part (1) in Form MGT-14.
- The application made for the name change in Form No. INC-24 and the additional fee.
The following documents are required to be attached to INC-24.
- A certified copy of the postulates of the General Meetings and name change approval order previously issued by the concerned department or authorities such as RBI, IRDA, SEBI, etc.
- Any such details may be furnished as optional attachments.
Step 5: Securing a fresh Certificate of Incorporation
- As per subsection 3b under Section 12, the company needs an engraving of the company name in readable characters on the company’s seal (if there is any).
- The company must notify the bank where their current account is in operation and the concerned government officials or any authorities such as stock exchanges, Excise Authorities, Tax, or any such parties with whom the company has struck a deal or made investments or secured insurance policies; about the change in the company’s name and intimate them to in the records as well.
- The company must apply for a new PAN and TAN.
Is Stamp Duty a must for change in MOA?
This Act does not consider a new memorandum of association. Where it implies to be so, it is nothing else but a special resolution and, as such, does not need to be stamped.
After the verification of the company name, up to what time is the name available for use by the company?
According to the Companies Amendment Act of 2017, in the case of alteration of the name of the company, the name shall be reserved for a duration of 60 days from the date of approval.