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Schedule A Demo

Procedure for Change in Name of the Company

Background 

  • Name clause is the first clause in the Memorandum of Association (MOA) which contains the name of the company. 
  • Any change in the name of the company requires alteration of MOA and AOA of the company as per Section 13 and 14 of the Companies Act, 2013. 

Section/Rules/Regulations 

  • Section 4, 13,14, 96, 100 173 of the Companies Act, 2013. 
  • Rule 8, 9, 9A, 29 of the Companies (Incorporation) Rules, 2014 
  • Regulation 30, 45, 44, 46 of the SEBI (LODR) Regulations, 2015 
  • Clauses of Secretarial Standards-1,2 

Pre-requisites & Important Points 

  • The change of name shall not be allowed to a company which has not filed annual returns or financial statements due for filing with the Registrar, or which has failed to pay or repay matured deposits or debentures or interest. (Rule 29(1) of the Companies (Incorporation) Rules, 2014). 
  • The change of name shall be allowed upon filing necessary documents or payment or repayment of matured deposits or debentures or interest thereon as the case may be (Proviso to Rule 29 of the Companies (Incorporation) Rules, 2014). 

Important Points w.r.t Change in name of the listed entity. 

  • Regulation 45 of the SEBI (LODR) Regulations, 2015 states that: 
    • The listed entity shall be allowed to change its name subject to compliance with the following conditions: 
  • a time period of at least one year has elapsed from the last name change; 
  • at least fifty percent of the total revenue in the preceding one year period has been accounted for by the new activity suggested by the new name;                 or 
  • the amount invested in the new activity/project is atleast fifty percent of the assets of the listed entity 
  • If any listed entity has changed its activities which are not reflected in its name, it shall change its name in line with its activities within a period of six months from the change of activities in compliance of provisions as applicable to change of name prescribed under Companies Act, 2013. 
    • Listed Company to obtain prior approval from Stock Exchange before filing application with Registrar of Companies
    • Upon compliance with the conditions for change of name laid down in Companies Act, 2013 and rules made thereunder, the listed entity, in the explanatory statement to the notice seeking shareholders’ approval for change in name, shall include a certificate from a practicing Chartered Accountant stating compliance with conditions provided in Regulation 45(1)

Procedure for change of name of a Company:

1) Convening of Meeting of Board of Directors 

  • As per Section 173 of the Companies Act, 2013 and Secretarial Standard-1: 
    • Notice of the Board Meeting shall be issued to all Directors at their registered addresses by post or hand delivery or by electronic means at least 7 days before the date of the board meeting, with provision for shorter notice in case of urgent business. 
    • The notice shall include Agenda, Notes to Agenda, and Draft Resolution. 
    • The Board at its meeting shall pass resolutions for  
      • Selecting the most appropriate name for the company. 
      • fixing the day, date, time, and venue of the General Meeting 
      • approve the draft GM Notice along with Explanatory Statement as per Section 102 of the Companies Act, 2013. 
      • Authorizing directors of the company to file required forms with ROC and to prepare a new set of amended MOA and AOA. 
    • Listed companies shall disclose the outcome of the Board Meeting to the Stock Exchange within 30 minutes of Board Meeting/ 3 hours as applicable*[Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015] and also on website of the Company within 2 working days from the date of passing of resolution for the alteration of the name clause. [Regulation 46 (3) of LODR 2015]. The listed entity may provide the exact link to the webpage of each of the recognized stock exchanges where such information has already been made available by the listed entity. 

 

*If the Board meeting is concluded after normal trading hours but more than 3 hours before the beginning of the normal trading hours the outcome to be disclosed within 3 hours from the closure of the board meeting. 

    • Listed Companies also to obtain the prior approval of the Stock Exchange for change in name and shall submit an application for the same along with Board resolution, date of last name change, reasons for change, confirmation from CA/CS as mentioned in Clause 45 of LODR. The Listed Entity to seek such approval before filing request of change of name with Registrar of Companies
    • Draft Minutes shall be prepared and circulated within 15 days from the conclusion of the Board Meeting. 

2) An application for reservation of name shall be made through the web service available at MCA website by using web service RUN (Reserve Unique Name) along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 (Rule 9 of the Companies (Incorporation) Rules, 2014) 

  • The application shall be accompanied with a copy of Board resolution. 
  • NOC of owner of trademark or the applicant if the proposed name is based on a registered trademark. 
  • The application may either be approved or rejected by the Registrar, Central Registration Centre after allowing re-submission of such web form within fifteen days for rectification of the defects. (Rule 9 of the Companies (Incorporation) Rules, 2014). 

Intimation/Application, seeking prior approval shall be made to the Exchange for change in name, prior to making an application to the Registrar of Companies (ROC) in case of Listed Entities

3) ROC shall then issue a Name Approval Letter with timeline up to which the name shall be available for adoption.

4) Approval of members of the Company for change in name can be obtained via Postal Ballot or by holding a General Meeting.

For more details on conducting business by way of Postal Ballot, one must refer to Rule 22 of the Companies [Management and Administrative Rules], 2014.) which provides for the procedure to be followed for conducting business through Postal Ballot.

For Companies conducting General Meeting, following procedure to be adopted:

  • As per Section 96 & 100 of the Companies Act and Secretarial Standards-2 (SS-2) 
    • Notice of general meeting shall be given at least 21 clear days prior to the conduct of meeting in the specified mode (as per Section 101 of the Companies Act, 2013 and Rule 18 of the Companies (Management & Administration) Rules, 2018). A shorter notice can be issued with the consent is given as specified under Section 101 of the Companies Act, 2013. 
    • The Notice shall be sent to all the directors, members and auditors of the company. 
    • The notice shall specify the day, date, time, full address of the venue, and include a statement on the business to be transacted. 
    • The General Meeting shall pass a Special Resolution for:  
      • Changing the name of the company subject to the approval of the Central Government. 
      • Altering the name clause of MOA 
      • Altering the AOA of the Company. 
    • Listed companies shall disclose the outcome of the General Meeting to the Stock Exchange within 12 hours of conclusion of General Meeting [Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015] and also on website of the Company within 2 working days from the date of passing of resolution for the alteration of the name clause. [Regulation 46 (3) of LODR 2015]. The listed entity may provide the exact link to the webpage of each of the recognized stock exchanges where such information has already been made available by the listed entity. 
    • Voting results shall be submitted to the stock exchange within two working days from the conclusion of the General meeting. (Regulation 44 of the SEBI (LODR) Regulations, 2015). 
    • Minutes of meeting shall be prepared with the specified procedure. 

Post Alteration Requirements 

  • Company shall file the form MGT-14 with ROC within 30 days of passing of Special Resolution along with certified true copy of resolution, explanatory statement, Notice of meeting, altered MOA and AOA, shorter notice(if meeting conducted at short notice)
  • Form No. INC-24 to be filed within 30 days of passing of Special Resolution (Rule 29 of the Companies (Incorporation) Rules, 2014) along with the following:
    • Notice and explanatory statement
    • Certified true copy of resolution
    • Altered MOA and AOA
    • GM Minutes
    • Approval letter from RBI/IRDA/SEBI, etc if applicable
    • CA Certificate where the change in name is due to change in main activity of company regarding turnover details from new activity
  • A new certificate of incorporation in Form No INC-25 shall be issued to the company consequent upon change of name by ROC. (Rule 29 of the Companies (Incorporation) Rules, 2014). 
  • Update company name in stock exchange records, demat records (NSDL/CDSL), and RTA and also submit  CTC of EGM resolution, Fresh COI consequent to change of name, Amended MOA & AOA etc to the S.E.

Penalties & Punishments 

  • As per section 4 of the Companies Act, 2013 
    • Where after reservation of name is found that name was applied by furnishing wrong or incorrect information, then the Registrar may, after giving the company an opportunity of being heard— 

(i) either direct the company to change its name within a period of three months, after passing an ordinary resolution. 

(ii) take action for striking off the name of the company from the register of companies. or 

(iii) make a petition for winding up of the company. 

    • Section 117(2): For failure to file the resolution(MGT14), penalty of Rs. 10,000/- on the company and Rs. 100/- per day of continuous default subject to max Rs. 2 lac. Every officer in default is liable to a penalty of Rs. 10000/-and Rs. 100/- per day of continuous default subject to max Rs. 50,000/-
    • Section 15: For failure to note alteration in every copy of MOA/AOA , the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every copy of the memorandum or articles issued without such alteration.
  • As per SEBI (LODR) Regulations: 

Regulation 

Penalty & Punishment 

30  

General penalty:  

Listed entity/any other person who contravenes any provision of the regulations shall be liable for one or more of the following penalties/actions as deemed fit by the regulator : a) action as per Securities Law, b) fine, c) suspension of trading, d)freezing of promoter/promoter group holding of designated securities, as may be applicable, in coordination with depositories, e) any other action specified by Board  

44  

Rs. 10,000/- per instance of non-compliance  

45(3)

Non-obtaining approval of stock exchange(s) before filing  request  for  change  of  name  with  Registrar  of Companies – ₹25,000 per instance

46  

Advisory/warning letter per instance of non-compliance per item₹10,000 per instance for every additional advisory/warning letter exceeding  the four advisory/ warning letters in a financial year 

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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