The name of a company serves as its enduring identity and should be chosen carefully to support long-term growth and recognition. The Companies Act governs the entire naming process, from initial selection to any future changes. This article provides a concise overview of essential do’s and don’ts for choosing a company name, along with the procedure for changing it as needed.
Guidelines for Naming a Company Under the Companies Act
The name must not resemble an already registered company or trademark. Simply combining different words or using a plural form of an existing name does not make it unique.
- Specificity: Avoid overly generic names like “Cotton Company Private Limited,” which do not provide specific information about the company’s business.
- Personal Names: The name should not begin with an individual’s name, such as “Ankita Private Limited.”
- Compliance: Ensure the name does not violate:
- The Emblems and Names Act
- Trademark laws
- Use of offensive or misleading words
- Alignment: The name must reflect the company’s business objectives. For companies involved in financial services, such as chit funds or leasing, this should be indicated in the name.
- Legal Terms: The name should not include terms suggesting a legal structure like LLP, Trust, or HUF.
- Suffixes: The name of a Private Company must end with “Private Limited,” an OPC with “OPC Private Limited,” and a Public Company with “Limited.”
The Procedure for Changing a Company’s Name
To change a company’s name, follow these steps:
Conduct Board Meeting: Directors must discuss and pass a resolution to approve the new name. Issue a 7-day notice for the Board Meeting. Resolutions include authorizing the Company Secretary or Director to check name availability with the Registrar of Companies (ROC) and scheduling an Extraordinary General Meeting (EGM) for further approval.
Check Name Availability: Verify the availability of the new name through the MCA portal. Ensure the name is not already in use or registered as a trademark by using the ‘Public Search of Trademark’ and ‘Check Company Name’ options.
Apply for Name Approval: Use the RUN web service to apply for name approval, listing up to two preferred names with a fee of INR 1000. Attach the board resolution authorizing the name change. The ROC will review and either approve or request resubmission. The approved name is valid for 20 days.
Conduct Extraordinary General Meeting (EGM): Once the name is approved by the ROC, convene the EGM to pass a Special Resolution for the name change and amendments to the Memorandum of Association (MOA) and Articles of Association (AOA).
File with ROC: Within 30 days of the EGM, file Form MGT-14 with the ROC. Include:
- Certified True Copy (CTC) of the Special Resolution
- Notice of EGM with an explanatory statement
- Updated MOA and AOA
Approval of Central Government: File Form INC-24 for Central Government approval of the name change and MOA alterations. Attach the minutes of the EGM.
Obtain New Certificate of Incorporation (COI): After processing, the ROC will issue a new COI reflecting the new name. The name change becomes effective upon the issuance of this new certificate.
Restrictions on Changing a Company’s Name
When changing a company’s name, it must be unique and not similar to existing names or trademarks. The new name must comply with legal regulations, avoid misleading terms, and reflect the company’s business accurately. It should include the correct suffix based on the company type, such as “Private Limited” or “Limited.” These restrictions ensure the name change is compliant and appropriate.
Conclusion
Changing a company’s name is a crucial step that can refresh its identity and align with its evolving business goals. By following the regulatory guidelines and ensuring the new name is unique, relevant, and legally compliant, companies can smoothly transition to a name that better reflects their vision and growth.