Change of Name

Rajeev kumar Nayak (ACS) (283 Points)

11 January 2011

Hi to everyone:

here I am compiling the provisions related to change of name of a company. A pdf file is also attched.

hope that it will be useful.

Thanx

PROVISIONS RELATED TO CHANGE OF NAME OF A COMPANY

BASIC PROVISION

As per Section 21 of the Companies Act, a Company may change its name by passing Special Resolution (SR) and with the approval of Central Government (CG).
Power under this Section is delegated to the ROC by the MCA.[Notification GSR No.507(E), dated 24/06/1985]
However in case of mere addition or deletion of the word “private” approval of the CG is not required.
But due to the implication of Section 31 a public company can be converted into private company only with the approval of CG.
Approval of the CG need not be previous approval and it can be obtained even after the change of name. [In Re: Bihari Mills Ltd., 1985, (Guj)] [CONTROVERSIAL]
In case of Banking Companies a Certificate of “no objection” for change of name is also required from the RBI before approval of CG is granted as per the provision of Sec. 49-B of the Banking Regulation Act, 1949.
If a NBFC wants to change its present name then it has to take prior permission of RBI before approaching the ROC for change of name. Any violation of these directions would attract the serious action against the company as provided under the RBI Act, 1934 including cancellation of the certificate of registration, if already granted, or rejection of its application for registration, as the case may be. [RBI circular dated 13/01/2000]

MCA GUIDELINES REGARDING CHANGE OF NAME

While considering the application for change of name (other than the case of mere conversion of private company or vice- a- versa, CG (power is delegated to ROC) considers the following points:-

Ø Whether the reasons are sufficient.

Ø Whether the propose name is in consonance with the principal objects of the company and with the kind or kinds of business actually carried on.

Ø Whether the proposed name is not desirable.

· A company seeking to change its name shall make a application to the ROC in e- form 1-A along with the fees of Rs. 500 for availability the new name and to check whether the changed name is undesirable under Sec. 20 of the Act.

· ROC shall furnish the required information to the company ordinarily within 7 days of the receipt of the application.

· Where the ROC informs the company that the changed name is not desirable such name shall be available for adoption:

Ø For a period of 60 days; and

Ø Such period may be extended for a further period of 30 days (60+30 days) on the payment of 50 % of the fees i.e Rs. 250.

· In case of Banking company wants to change its name as a result of its decision to give up the business of Banking, firstly it is required to alter its MOA suitably so as deliberately escaping the business of Banking and then apply to CG for alteration of name U/S 21 of the Act. Along with the application company shall also attached a certificate from the RBI that it has no objection to the proposed change of name.

APPROVAL POLICY ABOUT CHANGE OF NAME ON ADOPTION OF NEW BUSINESS.

· In case of change in the name of the company is proposed with a view to undertaking a new line of business not presently authorized by the MOA then new name of the company shall be approved only after necessary amendment is made in the MOA for undertaking the new line of business.

[EXTRACT FROM THE SEVEN ANNUAL REPORT YEAR ENDED 31^ST MARCH 1963]

ABBREVIATED NAMES - NOT ALLOWED FOR THE NEW COMPANIES

· The companies well known in their respective field by the abbreviated names, are allowed to changed their names by way of abbreviation (e.g. ABC Ltd.) by following the provision of Section 21.

NECCESARY ANNEXURE ALONG WITH APPLICATION

· An application for change, (other than the case of conversion) should be made after passing the SR U/S 21 and accompanied by the following particulars:

Ø Details reasons for change of name.

Ø A certified true copy of MOA and AOA.

Ø A certified true copy of SR

Ø A certified copy of confirmation from the ROC regarding the availability of new name

Ø A copy each of Balance Sheet and P/L account for the last two financial years.

Ø A certified copy of Challan received from ROC for filing form 23 in respect of relevant SR.

Ø Prescribed fees.

COMMUNICATION TO THE STOCK EXCHANGE BY THE LISTED COMPANIES

· Where the Company’s Shares are listed on any Stock exchange, the change of name must be notified to the Stock Exchange.

EFFECT OF CHANGE OF NAME

The Change in the name of the company does not affect the entity or continuity of the company as same entity.
Even after the change of name it remains the same entity with the same rights and privileges as before the change of name for all the practical purposes. [Pioneer Protective Glass Fibre P. Ltd. vs. Fibre Glass Pilkington Ltd.(cal) (1986)]

EFFECT OF CHANGE OF NAME ON LEGAL PROCEEDINGS

Sec. 23(3) of the Act provides that the change of name shall not affect any right or obligation of the company or render defective any legal proceedings by or against it.
Any legal proceedings which might have been continued or commenced against the company by its former name may be continued by or against the company by its new name.
However Sec. 23(3) protects only the continuance of pending legal proceedings which had been commenced by the company in its former name. It will not protect the legal proceedings commenced in such former name, after the change of name has been effected and register in the Register of companies by the ROC, even though the mistake was bona fide. [Malhati Tea Syndicate Ltd. vs. Revenue Officer, Jalpaiguri (1973) (Cal)]

ISSUE OF NEW CERTIFICATE OF INCORPORATION

AS per Sec. 23(1) of the Act, where a company changes its name in pursuance of Sec. 21, the ROC shall enter the new name of the companies in the Register in place of old name and issue a fresh Certificate of Incorporation.
The Change of name shall be complete and effective only on the issue of fresh Certificate of Incorporation.

OTHER FORMALITIES ON CHANGE OF NAME

· Change of name necessitates the change in the following:

Ø Old name will be substituted by the new name in the name Board, and all registers and other books, letter head and other document pertaining to the company’s business and affairs.

Ø Change of name will also necessitate the issuing of new share certificates in place of old one issued under the new name and will also require the renewal of debenture, bonds and other credit securities.

Ø The new Common Seal should be arranged in the new name and same should be adopted in the Board Meeting.

Ø In addition to this wherever old name is appeared it should be replaced with the new ones.

Prepared By

Rajeev Nayak