A company may change its name for reasons such as rebranding, restructuring, business diversification, mergers or acquisitions, or aligning its name with its business objectives. Such a change of name requires the approval of shareholders and the Registrar of Companies (ROC). For listed entities, additional compliances under the SEBI (LODR) Regulations, 2015 are applicable.
Statutory Framework Governing Change of Name of a Company
The legal framework governing a company's change of name is primarily contained in the Companies Act, 2013 and the Companies (Incorporation) Rules, 2014. In the case of listed entities, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also apply.
Sections 4(2) and 4(3) of the Companies Act, 2013 provide that a company cannot be registered with a name that is identical to or too closely resembles the name of an existing company, is undesirable or prohibited by law, or implies an association with the Central or State Government without the requisite approval. Section 13(1) permits a company to alter its Memorandum of Association, including its name clause, by passing a special resolution. Under Section 13(2), a change of name additionally requires the approval of the Central Government, a power presently delegated to the Registrar of Companies, except in specified cases relating to the conversion of companies. Section 117(3) requires the filing of the special resolution with the Registrar.
Rules 8 and 8A of the Companies (Incorporation) Rules, 2014 prescribe the criteria for determining name availability and specify names that are not eligible for registration, while Rule 29 governs the procedure and conditions for change of name.
For listed entities, Regulation 45 of the SEBI (LODR) Regulations, 2015 prescribes the conditions applicable to a change of name. Regulation 30 requires disclosure of material events and information to the stock exchanges, while Regulation 44 mandates submission of voting results and the scrutinizer's report within two working days of the general meeting.
Conditions Precedent for Change of Name under Rule 29 of the Companies (Incorporation) Rules, 2014
Under Rule 29 of the Companies (Incorporation) Rules, 2014, a company may change its name only if it has filed all due annual returns and financial statements with the Registrar and has not defaulted in the repayment of matured deposits, debentures, or interest thereon.
Procedure for Change of Name of a Company
Board Meeting and Approval (Section 173 of the Companies Act, 2013 and SS-1) -
The Board of Directors meets and approves the new name, authorises the application for name reservation, and approves the notice for the General Meeting.
Disclosure to Stock Exchanges under Regulation 30 of the SEBI LODR Regulations, 2015 -
Regulation 30(6) sets three different timelines based on the nature of the event. A decision taken at a Board Meeting must be disclosed within 30 minutes of the meeting closing. An event or information from within the company (not a board decision) must be disclosed within 12 hours. An event or information that is external to the company must be disclosed within 24 hours.
Name Reservation under Section 4(4) and Rule 9 -
Once the board approves the new name, the company must have it reserved with the ROC. This is done by filing Form RUN (Reserve Unique Name) on the MCA portal, along with the required fee as per Rule 9 of the Companies (Incorporation) Rules, 2014.
CA Certificate Requirement under Regulation 45 of the SEBI LODR Regulations, 2015 -
The explanatory statement to the notice seeking shareholders' approval for a change of name must include a certificate from a practising Chartered Accountant, confirming that the company complies with the conditions specified under Regulation 45(1).
Shareholders’ Approval under Section 13(1) -
At the general meeting, shareholders pass a special resolution approving the new name and the change in the MOA. But passing this resolution alone doesn't change the name. Section 13(2) says the company also needs approval from the Central Government, a power now given to the ROC, before the new name actually becomes effective.
Disclosure to Stock Exchange on Change in MOA -
Once shareholders give their approval through the special resolution, the company has to inform the stock exchange about the change in the Memorandum of Association within 12 hours, since this is an event taking place within the company itself.
Filing of MGT-14 (Section 117) -
Once the special resolution for the name change is passed, the company has to file Form MGT-14 with the ROC. This has to be done within 30 days of passing the resolution.
Filing of INC-24 (Rule 29) -
The company submits Form INC-24 to the ROC to seek final approval for the name change. This is filed after MGT-14 has been completed.
Fresh Certificate of Incorporation (Section 13(3)) -
The ROC issues a fresh Certificate of Incorporation in Form INC-25, carrying the company’s new name. The name change becomes legally effective only from the date this certificate is issued, not before.
LODR Requirements under Regulation 45
A listed entity may change its name if-
- At least one year has elapsed since its last name change, and
- At least 50% of its revenue in the preceding year came from the new activity, or
- At least 50% of its assets are invested in it.
Once the Registrar of Companies confirms name availability, the listed entity must seek approval from the stock exchange before filing the formal name-change request with the ROC. This approval is sought by submitting a certificate from a chartered accountant confirming compliance with the conditions under Regulation 45(1).
Stock Exchange Compliances
Throughout this entire process, the company has to keep the stock exchange in the loop at every major step. This is governed mainly by two provisions of SEBI's LODR Regulations — Regulation 30 deals with disclosure of material events relating to the proposed name change, including Board approval, shareholders' approval, and receipt of the fresh Certificate of Incorporation, while Regulation 44 deals with submission of voting results and scrutinizer's report, within 2 working days of the general meeting.
Post Name Change Compliances
A name change doesn't end with the new Certificate of Incorporation. The company needs to update the MOA, AOA, and all its statutory registers. It also has to get its PAN, TAN, GST, IEC, EPFO, ESIC, and other registrations updated with the new name. Banks, lenders, and financial institutions need to be informed, too, since they hold records under the old name. Existing agreements with customers, vendors, and employees should be amended to reflect the change. Trademarks and IP registrations also need updating. Records with the stock exchange, NSDL, CDSL, and the RTA have to be revised. Updating the website, email domain, letterheads and signboards is also required.
Compliance Timeline
There are a few key timelines to keep in mind. RUN is filed before the General Meeting to reserve the new name, MGT-14 is filed within 30 days of the Special Resolution, INC-24 is filed after MGT-14, INC-25 is issued once the ROC approves INC-24, and the Regulation 44 filing is done within 2 working days of the shareholders' meeting.
Key Takeaway
To sum it up, the process flows like this. It starts with Board Approval, followed by Name Reservation, then the Special Resolution, then filing of MGT-14, then INC-24, and finally the Fresh Certificate of Incorporation. Once the new name is in place, the company still has to go through a round of post-name-change updates, covering statutory, regulatory, and operational aspects, to ensure the new name is reflected everywhere it needs to be.