Procedure for Rectification of Name of the Company

Khushboo Sharma

Khushboo Sharma

Published on: Apr 29, 2023

Aakanksha Singhal

Updated on: Apr 29, 2023

★★★★★(4 Rating)

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Introduction:

In terms of Section 16 of the Companies Act, 2013, a company shall rectify its name in the following scenarios:

1. When the existing name or new name, with which registration has been obtained, is identical with or too nearly resembles with the name of any other registered company or
2. When the Regional Directors orders rectification of name if it comes to its notice that the existing name is opted in contravention with Rule 8 of Companies (Incorporation) Rules, 2014 and such orders has to be complied within three months of the date of such order
3. When the owner of a registered trade mark submits an application to the effect that the name is identical or too nearly resembles to his registered trade mark under the Trade Marks Act, 1999.

Any change in the name of a company shall be subject to the approval of the Central Government in writing but, no such approval will be necessary where the only change in the name of the company is the deletion therefrom, or addition thereto, of the word “Private”, consequent on the conversion of any one class of companies to another class in accordance with the provisions of this Act.

Applicable Provisions:

1. Section 4, 13, 15, 16, 96, 100 and 173 of Companies Act, 2013
2. Rule 6, 29 of Companies (Incorporation) Rules, 2014
3. Regulation 45 and 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Mandatory Requirements:

1. Company shall intimate the Registrar of Companies (RoC) about the change of its name.
2. Filing of ROC Annual Return, Financial Statement or any other report/documents to the Registrar of Companies (RoC) on time failing which name change is not permitted. (Rule 29(2) of the Companies (Incorporation) Rules, 2014)
3. Requirements to be met by listed companies in terms of the LODR Regulations:
   • at least one year has elapsed since the last name change (Regulation 45)
   • at least 50% of the company’s total revenue in the preceding one year has been accounted for by the new activity suggested by the new name (Regulation 45)
   • iii. the amount invested in the new activity/project is at least 50% of the assets of the listed entity (Regulation 45)
   • 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 the conditions above (Regulation 45)
   • Listed Company shall disclose the new name along with the old name on its web sites for a continuous period of one year, from the date of the last name change, in order to confirm compliance. (Regulation 46)

Procedure:

1. Convene a Meeting of Board of Directors [As per section 173 & SS-1]:
   The company shall convene a Meeting of its Board of Directors to pass a Board resolution for approving the proposal of rectification of its name.
   Refer to the Procedure for Conducting Board Meeting for a detailed procedure.
2. Alteration of Memorandum and Articles [Rule 6(1) of the Companies (Incorporation) Rules, 2014]:
   The Memorandum and Articles of the company shall be altered by passing a resolution in accordance with the provisions of the Companies Act, 2013 to give effect to the rectification of the name of the company and make necessary changes incidental thereto.
   Refer to the Procedure for Alteration of Articles of Association (AOA) and Procedure for Change in Name of the Company.
3. File e-form- RUN (“Reserve Unique Name”) with ROC:
   The Company shall file e-form- RUN with the Registrar of Companies (RoC) to obtain approval of the proposed new name along with the below mentioned attachments:
   • Copy of Board Resolution
   • If proposed name(s) are based on a registered Trade Mark or is a subject matter of an application pending for registration under the Trade Mark Act, 1999, then a No Objection Certificate of the Owner of such Trade Mark or the applicant of such application.
4. Name Approval Certificate from ROC [(Section 4(5)]:
   The Registrar of Companies (RoC) shall grant Name Approval Certificate subject to certain timelines which will be valid for a period of 21 days from the date of approval. If there is an objection by the Registrar in the applied name, then one more chance of resubmission shall be granted for filing that RUN form.
5. Convene Extra Ordinary General Meeting [Section 96, 100 of the Companies Act, 2013, Secretarial Standard (SS-2) and Rule 37 (1) of the Companies (Incorporation) Rules, 2014]:
   The company shall convene an Extra Ordinary General Meeting (EGM) of its Members to pass a Special resolution for approving the proposal of rectification of the name of the Company and its aftereffect, i.e., alteration required to be made in the Memorandum of Association and Articles of Association in terms of Section 13 of the Act.
   Refer to the Procedure for Conducting General Meeting for a detailed procedure.
6. File Form MGT-14 with ROC:
   The company shall file Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the special resolution in a duly convened General Meeting along with fee as specified in the Companies (Registration offices and fees) Rules, 2014 and the requisite documents.
7. File e-Form INC-24 for Approval of Central Government (Section 13(2)):
   The company shall file an application for rectification of its name in Form INC-24* within 30 days of passing of Special Resolution for obtaining approval from Central Government for changing the name of Company along with fees and the following attachments:
   • Name Approval Letter
   • Certified True Copy of Board Resolution
   • Certified True Copy of Special Resolution
   • Altered MOA & AOA
   • Minutes of General Meeting
   • Copy of Registered Trademark Certificate if any
   • Copy of E-Form MGT-14 with Copy of Challan
   • Any other information can be provided as an optional attachment(s).
   *Note:
   • In certain cases, the Registrar may require the applicant to provide some clarifications or additional document(s) in support of the form and details filed by the applicant which shall be submitted as an addendum for rectification of defects or incompleteness through filing GNL-4 webform.
   • The Ministry of Corporate Affairs (MCA) vide its notification dated: December 26, 2022, has notified the rolling of 56 forms which are required to be filed under the respective provisions of Companies Act, 2013 on the MCA21 V3 portal. So, Form INC-24 and GNL-4 webform is now required to be filed on the MCA21 V3 portal.
8. Issuance of New Certificate:
   The Registrar of Companies (RoC) shall issue a New Certificate of Incorporation with new name of the Company in Form No. INC-25.
9. Post Rectification Compliances:
   • Company shall change its Memorandum of Association and Articles of Association every change made in the Articles of Association & Memorandum of Association. (Section 15(1))
   • Company shall make an application for New Permanent Account Number (PAN) and Tax Deduction Account Number (TAN).
   • Company shall update its New Name with utility services such as telephone and electricity service providers.
   • Company shall update its New Name on new rubber stamps and all the stationery items prepared in the company’s new name.
   • Company shall file an Intimation under the following Acts:
     • Stock Exchanges
     • Goods and Services Act
     • Shops & Establishment Act
     • Factories Act
     • Foreign Exchange Management Act
     • Inter-State Migrant Workmen Act
     • Private Security Agency Act
     • EPF
     • ESI
     • Other Labour Laws
     • Industry Specific Laws.

Note: The change of name of the company does not affect:

1. Any rights or obligations of the company
2. Any legal proceeding against or by the company
3. Liability of the company for any statutory dues.