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company-compliance

Changing our company's name: what the law needs and how it is done

How an existing company changes its name: special resolution, INC-24, the no-default condition, the new certificate and what must change on your papers.

C

CA Harun Raaj

makeitlegit.in

You started the company with one name. The business has moved on, a co-founder has left, or you found a better brand. Now you want the company to carry a different name.

This is a real change to your company's founding document, not a form update. The new name has no effect until the Registrar issues a fresh certificate. This article covers changing the name of a company that already exists, in the order you will meet each step.

Where you stand today

Your company's name is stated in its memorandum of association, the founding document filed at incorporation (s.4(1)(a), Companies Act 2013). Changing the name therefore changes the memorandum.

Two rules sit on top of that.

First, a company may alter its memorandum "by a special resolution" and only after following the procedure in the section (s.13(1), Companies Act 2013). A special resolution is a resolution passed by a larger majority than an ordinary one. Your articles and the notice of the meeting decide how it is called.

Second, a change of name is subject to s.4(2) and s.4(3) of the Act and "shall not have effect except with the approval of the Central Government in writing" (s.13(2), Companies Act 2013). You apply on the MCA portal in Form INC-24, covered below.

What you can still do

If your company is up to date with its filings, you can usually change the name. If it is not, you cannot yet.

Rule 29(1) of the Companies (Incorporation) Rules, 2014 says the change of name "shall not be allowed" to a company which has defaulted in any of these:

  • filing its annual returns or financial statements;
  • filing any document due with the Registrar; or
  • repaying matured deposits or debentures, or the interest on them.

So the first job is a clean-up. Open the MCA portal and check whether any annual return, financial statement or other form is overdue. File what is pending first. Then apply for the new name.

One exception: dropping or adding "Private"

If the only change is deleting or adding the word "Private" because the company is converting from one class to another, no approval of the Central Government is needed (proviso to s.13(2), Companies Act 2013). That is a conversion matter. If that is your case, speak to a CA before you file anything.

The name must pass the same tests as a first name

The new name is not exempt from name rules just because the company already exists. Section 13(2) ties the change to s.4(2) and s.4(3).

Under s.4(2), the name must not:

  • be identical to, or resemble too nearly, the name of an existing company registered under the Act or any earlier company law; or
  • be such that using it would be an offence under any law, or be undesirable in the opinion of the Central Government.

Under s.4(3), the name must not contain a word likely to give the impression that the company is connected with, or has the patronage of, the Central Government, a State Government or a body they set up. It also must not contain a word or expression the rules prescribe, unless the Central Government's previous approval has been obtained.

The Incorporation Rules list words and expressions that need approval, such as "Board", "Commission", "Authority", "National", "Union", "Central", "Federal", "Republic" and "Municipal" (rule 8, Companies (Incorporation) Rules, 2014). Check the full list in the rule before you fall in love with a name.

A trademark point matters here too. If a registered trade mark owner applies within three years of your incorporation, registration, or change of name, the Central Government may direct you to change the name again (s.16(1)(b), Companies Act 2013). So run a trade mark search on your new name before you spend money on a logo and signage.

The deadline clock

There is no single "file by" date for a voluntary change. The clock runs in pieces.

Reserve the name first, if you wish. Section 4(4) lets a person apply to the Registrar to reserve "the name to which the company proposes to change its name". For an existing company changing its name, the Registrar may reserve it for sixty days from the date of approval (proviso to s.4(5)(i), Companies Act 2013). For a change of name, the reservation application is made through the MCA web service RUN (Reserve Unique Name) (rule 9, Companies (Incorporation) Rules, 2014, as substituted in 2020). Form INC-24 asks for the RUN service request number, so in practice you reserve first. Plan your meeting and your INC-24 within the sixty-day window. Check the current fee on the MCA portal before you file.

File the special resolution within thirty days. A copy of a special resolution must be filed with the Registrar within thirty days of its passing, along with the explanatory statement (s.117(1) and s.117(3)(a), Companies Act 2013). Section 13(6) separately requires the company to file the special resolution and the Central Government's approval with the Registrar for a change of name. The form for filing a resolution under s.117 is MGT-14 (rule 10A, Companies (Registration Offices and Fees) Rules, 2014). Form INC-24 asks for the MGT-14 service request number, so file MGT-14 before INC-24. Confirm attachments on the portal.

Late filing costs money. For failure to file under s.117, the company faces a penalty of ten thousand rupees (₹10,000), plus a further hundred rupees (₹100) for each day after the first, subject to a maximum of two lakh rupees (₹2 lakh) (s.117(2), Companies Act 2013).

Name must follow the business, within six months. If your company has changed its activities so that its name no longer reflects them, rule 8(3) requires it to change the name "within a period of six months from the change of activities" after complying with all provisions that apply to a change of name (rule 8(3), Companies (Incorporation) Rules, 2014).

Step by step

  • Check the filing record. Clear any default under rule 29(1) first. An application filed while you are in default is not allowed.
  • Choose the new name and test it. Run it against s.4(2), s.4(3) and rule 8. Check for similar company names and trade marks.
  • Reserve the name. Apply through RUN for the proposed new name. The reservation window for an existing company is sixty days (s.4(5), Companies Act 2013).
  • Hold the board meeting. The board approves the change in principle and calls a general meeting of members. The board also authorises a director or officer to sign the application. Form INC-24 carries a declaration that you have been authorised by board resolution number and date.
  • Pass the special resolution. The members vote at the general meeting (s.13(1), Companies Act 2013). Record how many members attended, how many voted for, against, or abstained, and how many shares each group holds. Form INC-24 asks for exactly these figures.
  • File the resolution first. File the special resolution in Form MGT-14 within the thirty-day window above (s.117(1), Companies Act 2013; rule 10A, Companies (Registration Offices and Fees) Rules, 2014). Keep the service request number.
  • File Form INC-24. Rule 29(2) says an application "shall be filed in Form No.INC.24 along with the fee". The form asks for the RUN and MGT-14 service request numbers and the reason for the change, and it is digitally signed. The Registrar's Central Processing Centre examines INC-24 applications (rule 10A, Companies (Registration Offices and Fees) Rules, 2014). Check the current fee on the MCA portal before you file. After approval, the company files the Central Government's approval with the Registrar as well (s.13(6)(b), Companies Act 2013).
  • Receive the new certificate. Once approved, the Registrar enters the new name in the register of companies in place of the old one and issues a fresh certificate of incorporation (s.13(3), Companies Act 2013). Under rule 29(2) the certificate is in Form INC-25.

The change is "complete and effective only on the issue of such a certificate" (s.13(3), Companies Act 2013). Until you hold it, the old name is your legal name. Do not print the new name on invoices or sign contracts in it before then.

After the certificate: update everything

Once the new name takes effect, the company must display and print it correctly. Section 12(3) of the Act requires the company to:

  • paint or affix its name and registered office address on the outside of every office or place where business is carried on;
  • have its name engraved on its seal, if it has one; and
  • print its name, registered office address and CIN on business letters, billheads, letter papers, notices and other official publications.

There is also a transition rule. A company that has changed its name during the last two years must paint, affix or print its former name or names along with the new name where s.12(3)(a) and (c) apply (first proviso to s.12(3), Companies Act 2013). So for two years, your letterhead and signboard carry both.

Every alteration of the memorandum must be noted in every copy of it. A company that fails to do so, and every officer in default, faces a penalty of one thousand rupees (₹1,000) for every copy issued without the alteration (s.15, Companies Act 2013).

Your name also sits on your PAN, bank accounts, GST registration and contracts. Those are separate updates; check each portal and keep the new certificate handy.

What not to do

  • Do not start using the new name early. The change is effective only on issue of the fresh certificate (s.13(3), Companies Act 2013).
  • Do not apply while you have overdue filings. Rule 29(1) bars it.
  • Do not ignore the thirty-day resolution filing. The penalty starts at ₹10,000 (s.117(2), Companies Act 2013).
  • Do not pick a name that was just released by someone else and assume you can take it. Rule 8(8) says names released on a change of name remain in the database and are not allowed to be taken by any other company, including the group company of the company that changed its name (rule 8(8), Companies (Incorporation) Rules, 2014). Do not assume an old name you like is free to take.
  • Do not ignore a direction to change the name. If the Central Government directs a change under s.16(1) because the name is too like an existing one, you must change it within three months, after adopting an ordinary resolution. If you do not, a new name can be allotted to you. Under the 2021 rules, it is made of the letters "ORDNC", the year of the direction, a serial number and your CIN, and the company must show "Order of Regional Director Not Complied" below its name (rule 33A, Companies (Incorporation) Rules, 2014). You can later change the name under s.13 (proviso to s.16(3), Companies Act 2013), and the ORDNC statement is then no longer required.

What to do now

  • Next step: check the MCA portal for any overdue annual return, financial statement or other filing, and clear it (rule 29(1), Companies (Incorporation) Rules, 2014).
  • Deadline: file the special resolution within thirty days of passing it (s.117(1), Companies Act 2013). Plan the INC-24 within the sixty-day name reservation window (s.4(5), Companies Act 2013).
  • Consequence of missing it: a penalty of ₹10,000 plus ₹100 a day, up to ₹2 lakh, for the late resolution filing (s.117(2), Companies Act 2013); and the new name has no effect until the new certificate is issued (s.13(3), Companies Act 2013).

Have a CA review your facts before you act or file.

FAQs

Do we need a special resolution to change the name?
Yes. The change alters the memorandum, and a company may alter its memorandum by special resolution (s.13(1), Companies Act 2013). The change also needs the approval described in s.13(2), except the "Private" case in the proviso.

Which form do we file for the change?
Form INC-24 (rule 29(2), Companies (Incorporation) Rules, 2014). The form asks for the members' voting figures and the RUN and MGT-14 service request numbers, and it is digitally signed.

When does the new name take effect?
Only when the Registrar issues the fresh certificate of incorporation with the new name (s.13(3), Companies Act 2013). Under rule 29(2), that certificate is in Form INC-25.

Can a company with pending annual filings change its name?
No. Rule 29(1) says the change "shall not be allowed" to a company that has defaulted in filing annual returns, financial statements or any other document due, or in repaying matured deposits, debentures or interest. File the overdue documents first.

Do we have to show the old name after the change?
Yes, for two years. If the company changed its name in the last two years, the former name must appear with the new one on the premises sign and on printed material (first proviso to s.12(3), Companies Act 2013).

What is the fee for INC-24?
We have not quoted a figure. Check the current fee on the MCA portal before you file.

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See Also

Topics:change of nameINC-24section 13rule 29MGT-14company name

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