Jyoti Malik (ACCOUNTANT) (2644 Points)
23 February 2010What is the process of Change in Name of already exist Pvt Ltd company?
Thanks in advance.
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 23 February 2010
1.11 ALTERATION OF THE MEMORANDUM
The memorandum may be altered only to the extent and in the manner provided by the Act
[Section 16] which allows alterations by a special resolution followed by confirmation thereof
by the Company Law Board only for the undermentioned purposes.
A resolution which is passed by 3/4th of the members present is known as Special Resolution.
Special resolution and the Company Law Board’s confirmation are not necessary in thecircumstances mentioned in paras (c), (f) and (h) :
(a) Changing the place of its registered office from one State to another - Section 17.
(b) Changing the object - Section 17.
(c) Change of registered office within a State ( Section 17A)
(d) Changing the name - Sections 21, 22 and 23 (approval of Central Government
necessary).
(e) Changing any other provisions contained in the memorandum including those relating to
the appointment of managing director or manager in the same manner as the articles of
the company (that is by special resolution) or in any other manner provided by the Act -
Section 16(3).
(f) Creating reserve liability - Section 99.
(g) Increasing, consolidating, sub-dividing or otherwise altering the share capital Section 94.
(h) Reducing the share capital - Section 100.
(i) Rendering unlimited the liability of its directors or of any director or manager Section
323.
Shareholder’s right can be altered or modified according to the provisions contained in
Sections 106 and 107, which will be dealt in Study Paper III.
An alteration that has the effect of increasing the liability of a member to contribute to the
share capital, or requires him to take more shares, or otherwise to pay money to the company,
shall not bind an existing member, unless he agrees to it in writing [Section 38].
According to the proviso to Section 38 where the company is a club or any other association
and the alteration requires the member to pay recurring or periodical subscripttions at a higher
rate, although he does not agree in writing to be bound by the alteration, it will bind him.
(a) Name Clause
No company shall be registered by a name which, in the opinion of the Central Government, is
undesirable - Section 20(1). Under the Emblems and Names Act, 1950, names like U.N.O. and
W.H.O. cannot be used by the companies without the prior sanction of the Central
Government. If the proposed name of the company is identical with or too nearly resembles
the name of another company which is already in existence, the Central Government may
refuse to register it [Section 20 (2) ; Ewing vs. Buttercup Margarine Co. Ltd.]. The company
must also be permitted to mention the fact that it is the successors to proprietary concern or
firm, etc. In this way, goodwill is preserved.
The name of public limited company must end with the word “Limited” and that of a private
limited company with the word “Private Limited”. But, as you have already noticed earlier, theCentral Government may, by a licence, authorise a company which is non-profit making
association to change its name so as to omit the words, “Limited or Private Limited” as the
case may be, by passing a special resolution.
The name and the address of the registered of office must be printed or affixed outside every
office or place of business in the characters of one of the languages in general use in the
locality and mentioned in all business letters, bill heads, letter papers, notices and other
official publications. The name alone must be engraved on the seal and mentioned in all bills
of exchange, promissory notes, endorsements, cheques and orders for money or goods,
invoices, receipts, etc. The characters must be legible. The address of the registered office is
also required to be shown [Section 147].
The use of words “Limited” and “Private Limited” by any person or body of persons not
incorporated with a limited liability or as a private limited company, as the case may be, is an
offence punishable with a fine - [Section 63].
(b) Change of name
A company may, by special resolution, and with the approval of the Central Government,
signified in writing, change its name [Section 21]. [*Power under Section 21 has been
delegated to the registrar of company. Vide notification GSR 507(E) dt. 24-6-85] The
application for change of name is required to be made to me ROC in four IA with a fee of Rs.
500. Where the Registrar is satisfied with the company’s proposal, he may accord to me
proposal which will be valid for a period of six months. However, such an approval of the
Central Government would not be necessary where the only change in the name of the
company is the addition thereto or the deletion there from of the words “private” consequent
upon the conversion as per the provisions of this Act of a public company into a private
company or vice versa [Proviso to Section 21]. It may be noted that this proviso is designed to
obviate the technical necessity of obtaining Government’s approval for the mere addition or
deletion of the word “private” to and from a company’s name in the aforesaid circumstances.
If through inadvertence etc., the name is identical with, or too nearly resembles, the name by
which a company, in existence, has been previously registered, it may be changed by ordinary
resolution with the sanction of the Central Government within twelve months of the
registration. The company shall make the change by ordinary resolution and with the previous
approval of the Central Government within three months of the date of the direction of the
Central Government being received or such longer period as the Central Government may
deem fit to allow [Section 22(1)].
Where the name of a company has been changed, the Registrar shall issue fresh certificate
with the change embodied therein. The change in name shall not affect any of the company’s
rights or obligations of the company or render any legal proceedings by or against it. Any legal
proceedings, which might have been continued or commenced by or against the company byits former name, may be continued by its name [Section 23].
Alteration of registered office
The address may be changed within the local limits of any city, town or village where such
office is situated by just giving a notice to the concerned Registrar within 30 days after the
date of the change. But a special resolution will be required if the change of the registered
office is from one village, town etc., in the same State [Section 146].
Where the place of registered offices is to be altered from one State to another State, the
company may do so by passing special resolution and getting confirmation of the Company
Law Board besides. The change can be permitted only if it is to achieve any of the purposes
mentioned in Section 17(1). [Mentioned on subsequent pages of this book].
The Company is required to give an advertisement in the spapers indicating the change
proposed to be made and also a notice is to be given to the State Government when it is
proposed to transfer the registered office from one State to another. (Vide Rule 36 of the
Company Law Board) (Bench) Rules, 1975 (App. IV).
The law, as contained in Section 17(3), requires notice for this to be served on all
shareholders. In an Orissa High Court case, only two shareholders out of three had passed
the special resolution and as such, the resolution was held to be invalid. Again, when an
application is made for a change in registered office of a company form one State to another,
the former State is the authority whose interests are affected by this change and thus has the
locus standi to such an application [Orient Paper Mills Limited vs. State AIR 1977 Orissa
582].
The Court (now the Company Law Board) must be satisfied as to the bona fides, of the
company’s application for the proposed change. Thus where a company, proposing to change
the location of registered office from Orissa to Andhra Pradesh had relied on Section 17(1)(a)
for the change on the ground of more direct and economic administration but had failed to
clarify how the expenses would be curtailed or how the administration from Andhra Pradesh
could be more direct, while the factory or unit or production was in Orissa, it was held that
bona fides of the company’s application for the change were questionable [Orissa Chemicals
and Distilleries Private Ltd. In re. AIR 1961 Orissa 62].
(e) Steps to be taken by a company: (i) for transfer of its registered office from one
State say West Bengal to another State say Tamil Nadu.
(i) The Company may, by a special resolution, alter the provisions of its memorandum so as to
change the place of its registered office from West Bengal to Tamil Nadu; this change alone
needs confirmation of the Company Law Board. When an application is made for a change as
aforesaid, it is the State where the registered office is at present situated, whose interests are
likely to be affected by the change and thus will have the locus standi to oppose such an
application [Orissa Paper Mills Ltd. vs. State AIR 1957 482]. Furthermore, it shall be
necessary to satisfy the Company Law Board as to the bona fides of the company’s
application for the proposed change [Orissa Chemicals and Distilleries Pvt Ltd., in Re. AIR
1961 Orissa 621].
As per the Companies (Amendment) Act, 1996, the C.L.B. has the power either to confirm or
refuse to confirm alteration relating to change of registered office.
(ii) Section 17 inserted by the Companies (Amendment) Act, 2000
(a) The amended provision shall apply only to companies that change their registered office
from the jurisdiction of the Registrar of Companies to the jurisdiction of another registrar
of Companies within the same State. (At present the provision shall be applicable to the
States of Maharashtra & Tamilnadu which have more then one office of ROC namely at
Mumbai & Pune and Chennai & Coimbatore respectively).
(b) The company cannot do such change of office unless the Regional Director confirms it.
(c) To obtain confirmation, the company has to apply in the prescribed form.
(d) The confirmation must be communicated to the company within 4 weeks from the date of
receipt of the application.
(e) Certified copy of the confirmation along with the attested copy of the memorandum of
Association must be filed with the ROC for registration within 2 months from the date of
confirmation.
(f) Within one month of filing, the ROC shall certify registration, which shall be the
conclusive evidence that all requirements with respect to alteration and confirmation
have been complied with.
(g) Alteration of objects: The members of a company may rightly expect that their money
would be employed only for the objects for which the company has been established.
Accordingly, the Act permits alteration of the objects, only so far as is considered necessary
for specified purposes. Section 17(1) permits a company to alter its objects for the under
mentioned purposes:
(a) to carry on business more economically :
(b) to attain the main purpose of the company by or improved means :
(c) to carry on some business which under the existing circumstances may conveniently or
advantageously be combined with the existing business.
(d) to change and enlarge the local area of operations;
(e) to restrict or abandon any of the existing objects;
(f) to sell or dispose of the whole or any part of the undertaking;
(g) to amalgamate with any other objects or body or person.
Certain amendments have been made by the Companies (Amendment) Act, 1996 in Sections
17 and 18. Accordingly, as per Section 17(2), only, the alteration of the provisions of
memorandum relating to change of place of its registered office from one State to another
requires to be confirmed by the Company Law Board on petition. In other words, Companies
are now under liberty to alter the object change of the memorandum without confirmation of
CLB. However, alteration can be made only on grounds stated above in Sub-section (1) of
Section 17.
In addition, according to the amended Section 18(1), a company shall file with the Register a
copy of the special resolution passed by the company in relation to clauses (a) to (g) of Subsection
(1) of Section 17 within one month from the date of such resolution. The Registrar
shall register the same and certify the registration under his hand within one month firm the
date of filing such documents. Such certificate shall be conclusive evidence that all the
requirements with respect to alteration have been complied with, and memorandum so altered
shall be the memorandum of the company.
If the documents required to be filed with the Registrar under Section 18 are not filed within
the prescribed time, the alteration shall at the expiry of such period, become void and inoperative.
[Section 19].
Steps to be taken by a company for starting a business for which there is no provision in the
objects clause of the memorandum of association:
Since the present “objects clause” of the company in question does not contain any enabling provisions for the company to carry on proposed business, the objects clause will have to be
altered. The alteration can be only for any one or more of purposes specified in Section 17(1)
discussed earlier.
Debenture holders and creditors are entitled to be heard by the Company Law Board unless it
decides otherwise. However, the Registrar of Companies has a right to be heard. As Mitra J.
Observed in Re Ganeshberi : Tea Co. (Pvt.) Comp. Case 556 “ in deciding as to whether a
company should be allowed to start additional business an application made in this behalf is
not to be disallowed merely because the business is wholly different form and bears no
relation to the existing business of the company. All that is essential is that it should be
capable of being conveniently and advantageously combined with the existing business and is
not destructive of or inconsistent with the existing business”.
According to the amended Section 18(1) of the Principal Act (as stated previously), a company
shall file with the Registrar a special resolution passed by the company relating to clauses (a)
to (g) of Sub-section (1) of Section 17 within one month from the date of such resolution or a
certified copy of the order of the Company Law Board made under Sub-section (5) of that
section confirming the alteration, within three months from the date of order as the case may
be, together with a printed copy of the memorandum as altered and the Registrar shall register
the same and certify the registration under his hand within one month from the date of filing of
such documents.
It should be noted that on the objects being altered as aforesaid, the company would not be
automatically entitled to commence the proposed business since the provisions of Section
149(2A) would also require compliance therewith.
Section 149 (2A) prohibits a public limited company from commencing any business other than
that covered by the main objects of the company, unless it has by a special resolution,
approved of the commencement of such business and a duly verified declaration by one of its
Directors or its Secretary in the prescribed form that such a resolution has been passed or as
the case may be the provisions of Section 149(2B) have been complied with, has been filed
with the Registrar. In the context of this prohibition, a distinction has been made between a
company existing immediately before the commencement of the Amendment Act, 1965 and
one formed after such commencement. In the former case, the special resolution is required
for commencing a business, in relation to any of the objects mentioned in its memorandum,
which is not germane to the business it was carrying on at the commencement of the
Amendment Act. In the latter case, the special resolution is necessary to set up a business in
relation to any object other than its main objects, or ancillary to it, on its memorandum.
Thus, for commencing the proposed business, a special resolution of the company would be
necessary. An ordinary resolution would be sufficient if, in addition the Central Government,
on an application by the Board of Directors, allows the company to commence such a
business [Section 149(2B)].
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 23 February 2010
Please find enclosed herewith a checklist for change in name of the company.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 23 February 2010
In case of change in registered address of the company within the same city you have to pass a board resolution and file form 18 with ROC within 30 days of passing board resolution.
Find below sample board resolution:
Board resolution for change in Regd Office within the same city
“RESOLVED THAT in pursuant to provisions of section 146 of the Companies Act, 1956 and any other provisions applicable, if any, the registered office of the Company be and is hereby shifted w.e.f. March 01, 2006
From
_______
_______
_______
To
_______
_______
_______
FURTHER RESOLVED that any director of the Company be and is hereby authorised to furnish necessary paper and documents with the Registrar of Companies of New Delhi & Haryana and do all such act and things as may be considered necessary incidental and ancillary for the above mentioned purpose.”
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 23 February 2010
Procedure for change in object clause
This process involves alteration of MOA
1. First Call a board meeting and pass following 3 resolutions
a) resolution for change in object
b) calling of General Meeting.
c) authorisation to sign digital form
2. On due date hold General Meeting and pass the Special Resolution.
3. File form23 with in 30 days of passing Special Resolution in General Meeting.
4. Prepare new MOA with new clause and attach the same in form-23 along with notice of General Meeting.
Regards
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 23 February 2010
Thanks Ankur Sir................Every Type of Material is Ready With U.
shashank garg
(Article )
(49 Points)
Replied 24 February 2010
Step 1: With the consent of Board approach CG for seeking its Approval in form 1A.
Step 2: After seeking approval from CG, call an EGM of the company in which the members pass a Special Resolution for change of name and authorize its directors for making necessary amendments in the MOA and file the required forms with the ROC.
Step 3 : After EGM is being conducted the company shall register the Special Resolution with the ROC in form 23.
Step 4 : The final step is to file form 1B for change of name.
Note: With Form 23 Altered copy of MOA and AOA should be attached.
Sneha
(Company Secretary)
(210 Points)
Replied 24 April 2010
Can the special resolution for change of name even include required change in MOA AOA (inserting new name) or is a separate resolution required for it?
NISHANT SHAH
(Tax Practioner)
(235 Points)
Replied 17 December 2011
i want to know that what the formalities to be done after getting certificate of name change from Registrar of companies
NIKHIL PILANIA
(COMPLIANCE EXECUTIVE)
(580 Points)
Replied 19 May 2014
CHANGE IN NAME OF THE COMPANY
A Company being a legal entity must have a name of its own to establish its separate identity.
The name of the Company is a symbol of its independent corporate existence. The first clause in the Memorandum of Association of the Company states the name by which a Company is known. The Company may adopt any suitable name provided it is not undesirable.
Section 4 of the Companies Act, 2013 provides that no Company shall be registered by name which, in the opinion of the Central Government, is undesirable. A name which is identical with or too nearly resembles the name by which a Company is in existence has been previously registered, will be deemed to be undesirable. The object is to prevent the use of name likely to mislead the public.
The Company after incorporation can change their name by following way:
(a) Conversion of name from private to public, or
(b) Conversion of name from public to private, or
(c) Change of name from ABC limited to XYZ limited
Section 13 of the Companies Act, 2013 deal with change of name which says that the name of the Company can be changed by a special resolution and with the approval of the Central Government. Approval of Central Government is not required if the change relates to the addition/deletion of the words “private” to the name.
A Company’s name is considered as identity of the Company (Public or Private), which may be changed with the approval of members in the general meeting. According to section 13 of the Companies Act, 2013, a special resolution is required to be passed at the general meeting along with the approval of the Central Government (Powers have been delegated to the Registrar of Companies).
Steps involved for change in the name of a Company:
Procedure for altering name clause of Memorandum and Articles of Association of the Company:
STEP 1: Board meeting for deciding the agenda for change in name:
The Board of directors of a Company should first consider the need and reason for changing name of the Company. Change of name for an existing Company may be due to:
(a) The new name is corresponding to a new business which it has proposed to undertake;
(b) a Company, which has been carrying on its business for a long time and has established a standing in the market, may decide to shorten its name and may like to be known by its abbreviated name as for example "LIC Ltd." in place of Life Insurance Corporation of India Ltd., etc.
STEP 2: Seeking name availability for proposed new name from the ROC An application in e-Form INC-1 is required to be made along with necessary filing fee of Rs. 1000 to the ROC for getting confirmation regarding availability of the proposed new name. The Registrar shall intimate the applicants about the status of availability of name.
STEP 3: Approval of members in general meeting after getting name availability confirmation from the ROC, the Board shall convene a general meeting of members for the purpose of getting member’s approval through passing special resolution u/s 13. The resolution so passed shall be subject to approval of the Central Government. (Powers have been delegated to the Registrar of Companies). As change of name of Company involves amendment in Memorandum (MOA) and Articles of Association (AOA) etc., so special resolutions also required to be passed for alteration of MOA and AOA.
STEP :4 Registration of Special Resolution with ROC through form-MGT-14 As desired by section 117 Company shall also file certified copy of the special resolution along with explanatory statement with ROC through form- MGT-14 within 30 days of passing or making thereof in such manner and with such fees as may be prescribed within the time specified under section 403.
STEP :5 Filing of form-INC-27 with ROC u/s.13:-
In accordance with section 13 an application in form INC-27 is to be made to the ROC (Powers delegated to the ROC by Central Government) for approval of change of name of the Company along with requisite fee.
Some important points to be observed for quick ROC approval are:
(a) Company should furnish sufficient reasons for change in name;
(b) proposed name should not be undesirable as per the Govt. guidelines;
STEP: 6 On being satisfied the Registrar shall accord his approval for the change in name and shall issue a certificate of such effect. Continuation of all legal proceedings by or against the Company with the new name. As per section 13 change of name in the Company shall not affect any rights or obligations of the Company. Any legal proceedings, which might have commenced in the former name, shall be continued with the new name. Change of name by Non-Banking Financial Company for name change As per RBI guidelines, the NBF Companies are required to collect approval of RBI for change in their names. Therefore, the ROC shall require the "No Objection Letter" from the RBI before confirming name availability. Such companies are required to submit an application to the RBI at their Regional Office, where the registered office of the Company is situated.
Annexure to be filed with application are:
1. Reason for change in name
2. Copy of the Board resolution
3. Auditors' certificate for non-acceptance of public deposit
4. Future business plans of the Company.
STEP: 7 After collecting "No Objection Letter" from the RBI, the same is required to be submitted to the ROC, in order to allow ROC to decide availability of name. Rectification of name of an existing Company (Section-16) In case if the name of a Company on its registration or on registration with changed name, it has come to the knowledge of the Company or if in the opinion of the Central Government the name of the Company is identical or closely resembles the name by which a Company in existence has been already registered, whether under this Act or any previous Company law, it may direct the Company to change its new name within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose
Procedure for rectification of name is as follows:—
(a) Apply to the ROC in Form INC-1 for name availability along with fee of Rs. 1000;
(b) Hold a board meeting and collect the approval of board by passing a board resolution to change the name.
(c) Also fix the date and time for a general meeting and adopt the notice to be sent to the members.
(d) after getting the member’s approval through an ordinary resolution, apply to the Regional Director in e-Form RD-1, (to whom power is delegated under section 13), for obtaining approval for the change in name.
(e) After receiving the approval from the Regional Director, apply to the Registrar for issuance of a fresh certificate of incorporation.
B.SAKTHIVEL
(Accountant)
(26 Points)
Replied 28 January 2015
Dear Sir,
I want know, how to fill the form INC-22, DIR-12 AND SH-7 For Existing Company Name Changes
CAclubindia
