Overview

The name of a company serves as its identity throughout its existence. Therefore, selecting a name should be a well-thought-out decision that aligns with future growth and sustainability. The Companies Act governs the entire process of naming a company, from selection to any modifications thereafter.

This article provides a brief overview of the do’s and don’ts when choosing a company name, along with the procedure for changing an existing name.

Checklist for Naming a Company as per the Companies Act

The Companies Act, 2013, lays down specific guidelines for naming a company, whether it is a Private Limited, One Person Company (OPC), or a Public Limited Company. The following factors must be considered while selecting a company name:

1.       The Ministry of Corporate Affairs (MCA) ensures that the proposed name does not closely resemble any already registered company or trademark. Simply adding separate words or using plural forms of existing names does not make a name unique.

2.       Generic names such as ‘Cotton Company Private Limited’ are restricted.

3.       A company’s name cannot begin with an individual’s name, e.g., ‘Ankita Private Limited.’

4.       A name will be considered undesirable if it violates any of the following conditions:

o    Contravenes the Emblems and Names Act

o    Infringes upon an existing trademark

o    Contains misleading or offensive words

5.       The company’s name should align with its business activities.

6.       If the company operates in financial services (e.g., chit funds, leasing, financing), the name should reflect such activities.

7.       The name must not include terms suggesting a different legal structure, such as LLP, Trust, HUF, etc.

8.       A Private Limited Company must end with ‘Private Limited,’ an OPC with ‘OPC Private Limited,’ and a Public Company with ‘Limited.’

Registration Procedure for Changing a Company Name

If a company decides to change its name, it must follow these steps:

1.      Conduct a Board Meeting

o    The board of directors discusses the proposed name change. A 7-day notice is issued for the meeting to pass the necessary resolution.

o    Resolutions include:

§  Authorizing a Company Secretary or Director to check name availability with the Registrar of Companies (ROC).

§  Setting a date, time, and venue for an Extraordinary General Meeting (EGM) to approve the new name.

2.      Check Name Availability

o    The company must verify the availability of the proposed name using the MCA portal.

o    The name must not be an already registered trademark or company name. The availability can be checked using the Public Search of Trademark and Check Company Name tools.

3.      Apply for Name Approval

o    If the selected name is available, an application is submitted through the RUN (Reserve Unique Name) web service.

o    A maximum of two names can be applied for with a fee of INR 1,000.

o    If changing an existing name, the company must attach the board resolution as supporting documentation.

o    The ROC will either approve the name or request modifications. Once approved, the name remains valid for 20 days.

4.      Conduct an Extraordinary General Meeting (EGM)

o    Once the name is approved by the ROC, an EGM is held to pass a Special Resolution for name change and amend the Memorandum of Association (MOA) and Articles of Association (AOA).

5.      File with ROC

o    Within 30 days of the EGM, the company must file the Special Resolution with the ROC via Form MGT-14.

o    Documents required:

1.      Certified True Copy (CTC) of the Special Resolution

2.      EGM notice with an explanatory statement

3.      Altered MOA

4.      Altered AOA

6.      Approval from Central Government

o    The company must obtain Central Government approval for the name change by filing Form INC-24.

o    The minutes of the EGM where the Special Resolution was passed must be attached.

7.      Issuance of New Certificate of Incorporation

         o    Once the name change is processed, the ROC issues a new Certificate of Incorporation (COI) with the updated company name. The new name becomes legally effective from the date of issuance of the COI.

Restrictions on Changing the Name of a Company

Under Rule 29 of the Companies (Incorporation) Rules, 2014, certain companies are restricted from changing their name due to non-compliance with legal and financial obligations. The following companies are prohibited from initiating a name change:

1. 1.       Non-filing of Annual Returns – Companies that have failed to file their annual returns within the prescribed timeline.

   2.       Unpaid Matured Deposits – Companies that have not repaid deposits that have reached maturity.

   3.       Default on Matured Debentures – Companies that have not cleared dues related to matured debentures.

   4.       Unpaid Interest on Deposits or Debentures – Companies that have defaulted on interest payments associated with deposits or debentures.