Introduction:

In the dynamic business environment of Bangalore, companies often find it necessary to alter their names due to various reasons such as rebranding, mergers, or changes in business focus. However, altering a company name involves legal procedures that must be followed to ensure compliance with the regulatory framework established by the Companies Act, 2013, and other relevant laws. This article explores the legal aspects surrounding the alteration of company names in Bangalore.

A company’s name is its unique identifier, and it is typically included as the first clause in the Memorandum of Association (MOA). This document outlines the company’s objectives and sets out its rules and regulations. For a private limited company, the name clause specifies the name that the company will operate under. However, there may be occasions when a company’s management decides to change the name of the company. This could be for various reasons such as rebranding, expanding into new markets, or reflecting a change in the company’s focus. In such cases, the company must follow a specific process to obtain approval for the name change.

Common Reasons for Change of Company Name

1. Voluntary Change of Name

The company may, on its own, decide to change the name of the company, subject to fulfilment of all other conditions it is very much legal and normal to change the company name voluntarily.

2. Change in Business Activity

To reflect the new or additional business objects, the company may decide to change its name. In the instant situation, the company also alters its MOA to change the main object.

3. For Rebranding/Marketing

For marketing reasons or to effectively position the company's brand, sometimes companies also change their name to bring it as per the latest trend and fashion for better brand positioning.

4. Change of Ownership

It is seen that after the change of ownership or takeovers, the company name also changes to reflect upon the authority of the new management and for branding purposes.

5. To Avoid IPR Issues

The companies may change their name to re-enforce their trademarks or copyrights in their name. Similarly, the company name is also changed to avoid a potential IPR Conflict.

6. In Compliance of ROC Direction

The ROC can also make an order directing the change in the name of company subsequent to a complaint filed by any other company claiming priority of use of name or Trademark.

Procedure for Company Name Change

STEP 1 – Held Board Meeting

When a company seeks to change its name, the board of directors plays a key role in the process. Initially, the board of directors decides on the proposed name for the company. Once a proposed name has been selected, the board of directors passes a resolution formally approving the name change.

STEP 2 – File RUN Application

After the board of directors has agreed on a new name for the company, the next step is to submit a request for Reservation of New Name to the Registrar of Companies Bangalore (ROC) through the RUN (Reserve Unique Name) facility. This request must include a copy of the Board Resolution as well as a No Objection Certificate (NOC) from the trademark owner, if applicable.

To file the RUN application, the company is required to pay a government fee of Rs. 1000/-. The ROC then evaluates the application to ensure that the proposed name is unique and not already in use by another company, limited liability partnership (LLP), domain, or trademark. If the proposed name is deemed acceptable, the ROC approves the new name and issues a name reservation certificate. This certificate confirms the company’s right to use the new name for a specified period, typically 20 days.

STEP 3 – Hold EGM

Once the Registrar of Companies (ROC) approves the new name, the company must seek approval from its shareholders by convening an Extraordinary General Meeting (EGM). The board of directors is responsible for sending a notice of the EGM to every shareholder at least 21 days prior to the meeting date.

The notice for the EGM must include the proposed resolution to be passed as a special resolution and an explanatory statement. The explanatory statement should provide details about the reasons for the name change and its potential impact on the company and its stakeholders. During the EGM, shareholders will have an opportunity to discuss the proposed name change and vote on the special resolution. A special resolution requires approval by at least 75% of the shareholders present at the meeting, either in person or by proxy.

STEP 4 – Filing of MGT-14 (Registration of Special Resolution)

A special resolution is a decision that requires the approval of at least 75% of the voting rights of the shareholders present at the EGM. Once the special resolution to change the name of the company is passed at the EGM, the company must file it with the Registrar of Companies (ROC) for approval.

To file the special resolution, the company must use Form MGT-14 and pay the prescribed fee. The company must file the form with the ROC within 30 days of passing the resolution at the EGM. The Form MGT-14 should include a copy of the special resolution passed at the EGM, along with other required documents such as the notice of the EGM, the explanatory statement, and the minutes of the EGM.

STEP 5 – Filing of INC-24 (Seeking Approval of Central Government)

To officially change a company’s name, the company must file an application with the Registrar of Companies (ROC) using Form INC-24. The form should include an amended copy of the Memorandum of Association (MOA) and Articles of Association (AOA), along with a copy of the notice of the EGM and the special resolution approving the name change.

STEP 6 – Issue of Fresh Certificate of Incorporation by ROC

With the approval of MGT-14 and INC-24, the ROC issues a fresh Certificate of Incorporation with the changed name. It’s important to note that the company cannot use its new name until it receives the fresh Certificate of Incorporation from the ROC. Until then, the company should continue to use its old name for all legal and business purposes.

After the company receives the fresh Certificate of Incorporation, it should update all relevant legal and financial documents with the new name. This includes licenses, permits, bank accounts, contracts, and any other legal documents that reference the company’s name. It’s also important to inform all stakeholders, including customers, vendors, and employees, about the name change to avoid any confusion or misunderstandings.

Documents Required for Company Name Change

List of Documents Required

1. Current Certificate of Incorporation.
   
2. MOA and AOA in word format
   
3. List of Directors and Shareholders.
   
4. Proposed Name(s) in order of preference.
   
5. Digital Signature of the authorized director.
   
6. Letterheads and rubber stamp of director
   

Documents to be Attached With ROC Form

1.RUN Form.

1. Copy of Board Resolution.
   
2. Consent of TM Owner (If applicable)
   

2.MGT-14 and INC-24.

1. EGM Notice Along With Explanatory Statement.
   
2. Certified Copies of EGM Resolution.
   
3. Altered MOA & AOA.
   
4. Attendance Sheet of EGM.
   
5. Consent for Shorter Notice (If applicable)
   

Legal Provision

In most cases, companies, whether they are new or have been in existence for some time, are eligible to apply for a change in their company name. However, it’s important to note that certain legal requirements must be met before a name change can be granted. Under Section 13(2) of the Companies Act, 2013, read with Rule 29(2) of the Companies (Incorporation) Rules, 2014, a company may not be permitted to change its name if it has failed to file its Annual Return, Financial Statement, or any other report or document to the Registrar of Companies (ROC) on time.

This means that a company must ensure that it is compliant with all the legal and regulatory requirements before applying for a name change. If the company has not filed the necessary reports or documents within the prescribed timelines, it may face penalties and legal repercussions. Moreover, the ROC may reject the application for name change until the company meets its legal obligations.

Therefore, it’s essential for companies to ensure that they are up to date with their filing requirements and compliance obligations before seeking a name change. This will help them avoid unnecessary delays, penalties, and legal issues, and ensure a smooth and efficient process for the name change application.

Conclusion

The alteration of a company name in Bangalore is a procedural matter governed by the Companies Act, 2013, and other relevant laws. By following the prescribed legal process and ensuring compliance with regulatory requirements, companies can successfully alter their names and adapt to changing business needs while mitigating legal risks. It is advisable for companies seeking to alter their names to seek legal counsel to navigate the complexities of the process effectively.