Procedure for name change of public limited Company
shakunthala thota
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Thanks & Regards,
Shakunthala
Executive
shakunthala thota
CS Shainshad Aduvanni
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Change of Name of a Company |
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A company desiring to change its name may do so in accordance with the provisions of Section 21 of the Companies Act, 1956. The section lays down that a company may, by special resolution and with the approval of the Central Government signified in writing, change its name. The power of the Central Government to approve change in the name has been delegated to Registrar of Companies.However, if the only change required is the addition thereto or deletion therefrom, of the word “Private”, consequent upon conversion of a public company into a private company or vice versa, no such approval of Central Government is required. |
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In the light of the above provisions of Section 21 of the Act, the company has to take the following procedural steps: |
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2. Hold the Board meeting to — |
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(i) consider and approve the proposed name by passing a resolution. Considering that the proposed name may not be made available by the concerned Registrar of Companies (ROC), the Board must consider and decide at least five more names in order of their preference. These names are required to be given in the application for availability of name to be made to the Registrar of Companies in e-form 1A, as prescribed in the Companies (Central Government’s) General Rules and Forms (Amendment) Rules, 2006, for his consideration. If the proposed name is not available, the five additional names may be considered by the Registrar and whichever of those names is available, the same be reserved for the company. A formal Board resolution is required to be passed at the meeting. |
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(ii) to authorise the Company Secretary/Director to make the required application to the Registrar of Companies in e-form 1A for seeking availability of the proposed name and pay the prescribed application fee of Rs.500/-. [For specimen, please see Annexure I(a)] |
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3. The application in e-Form 1A, accompanied by a fee of rupees five hundred to the Registrar of Companies should have the following documents as attachment: 1. In case of change of name of an existing company, a copy of Board resolution; 2. Trademark or authorization to use trade mark, if the name of the company is based on trade mark or application for deed of assignment; 3. If change is due to a direction received from the Central Government, then a copy of such direction; 4. Optional attachment(s) - if any. |
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The Registrar is required to inform the applicant, about the availability or otherwise of the name applied for, within three days of the receipt of the application vide rule 4A(1). |
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If the proposed name is available, the same should be adopted, that is to say, the adoption of such name should be effected, within sixty days from the date of intimation by the Registrar vide rule 4A(2)(a). The applicant may apply for extension for retention of such name for a further period of thirty days on payment of fifty per cent of the fee prescribed for the application at the initial stage, no further extension will be granted after expiry of ninety days from the date the name is allowed in the first instance. The name allowed shall lapse after expiry of sixty or ninety days, as the case may be, from the date it is allowed first. |
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On filing e-form 1A, the system will process and generate a Service RequestNumber (SRN) which shall be used for tracking the status of name clearance. |
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4. On receipt of approval of name, the Company Secretary/Director must, in consultation with the Chairman of the Board meetings, fix time, date and venue for holding another Board meeting for transacting the following business: |
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(i) To take note of the approval received from the ROC. |
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(ii) To fix time, date and venue for holding a general meeting (annual or extraordinary) of the shareholders of the company— |
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(a) for passing a special resolution required under Section 21 of the Act for changing the name of the company; and |
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(b) for passing another special resolution under Section 16 of the Act for altering clause I (name clause) in the memorandum of association of the company in accordance with Section 16 of the Act. |
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(iii) To approve notice of the general meeting and the explanatory statement to be annexed to the notice under Section 173 (2) of the Act for the general meeting and to authorise the Company Secretary/Director to issue the notice on behalf of the Board. |
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5. Issue notice of the general meeting to all the members of the company, its directors and the auditors. |
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6. In the case of listed companies, send three copies of the notice to each stock exchange where the securities of the company are listed (Refer Clause 31 of the Listing Agreement). |
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7. A general notice of the general meeting may also be published in news- papers. |
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8. Hold the general meeting and pass the resolutions as contained in the notice. |
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9. Send to each stock exchange, six copies of the alterations of the memorandum (one of them must be certified) soon after the conclusion of the general meeting, in case shares of the company are listed (Refer Listing Agreement). |
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10. Send to each stock exchanges, a copy of the proceedings of the general meeting in case shares of the company are listed (Refer clause 33 of the Listing Agreement). |
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11. File with the ROC e-form 23 with a certified true copy of each special resolution passed at the general meeting along with the explanatory statement under Section 173 and altered copy of Memorandum of Association and Articles of Association and prescribed filing fee. |
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12. Make an application to the concerned Registrar of Companies alongwith the prescribed application fee, for obtaining Central Government’s approval to the change of name of the company. New e-form 1B has been prescribed for this purpose. The attachments with e-form 1B are as below: |
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1. Minutes of the members' meeting; |
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2. Certified copy of the order for condonation of delay; |
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3. Optional attachment(s) - if any. |
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Note: Following particulars will be filled up in the form itself: |
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(a) Reasons for change of name (Column 5 of the Form). |
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(b) Particulars of filing e-form 23 (Column 6 of the Form). |
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(c) Name of the Company at the time of Incorporation (Column 7 of the Form). |
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(d) Number of members present, numbers voted in favour and number voted against (Column 8 of the Form). |
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(For specimen of the e-form 1B for obtaining Central Government’s approval to the change of name of the company, please see Part B of this Study). |
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13. On receipt of the Central Government’s approval to the change of name, the company should surrender to the ROC, the existing Certificate of Incorporation with a request for the issue of a Fresh Certificate of Incorporation consequent upon change of name of the company. |
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14. Issue a general notice in newspapers informing all concerned, about the change of name of the company. |
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15. Inform all concerned persons/authorities about the changed name of the Company, particularly the Stock Exchanges, National Securities Depository Ltd., Central Depository Services (India) Ltd., Central Excise Authorities, Sales-tax Authorities in various States, Customs Authorities, Chief Inspector of Factories, Regional Provident Fund Commissioner, suppliers of raw materials, customers, banks etc. |
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16. Arrange for a new Common Seal and have the same adopted at a meeting of the Board of directors and keep both the old and the new Common Seals under lock and key. |
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17. Get stationery printed with the new name and/or affix rubber stamp of the new name on all the existing stationery including the blank share certificates. |
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18. Get the new name of the Company painted on all the signboards wherever they are displayed. |
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19. Correct all records, registers including the Register of Members, share certificates, every copy of Memorandum and Articles of Association. |
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Effect of change of name of a Company |
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1. Generally: Sub-section (3) of section 23 of the Act provides for the effect of a change of name of a company. According to this section, the change of name: |
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— Shall not affect any rights or obligations of the company; |
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— Shall not render defective any legal proceedings by or against the company; and |
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— Shall not affect any legal proceedings by or against the company and pending in the old name; they may continue in the old name. |
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Sub-section (3) recognizes the continued existence of a company which has changed its name. The effect of the issue of the certificate of incorporation on change of name is not to reform or re-incorporate the company as a new entity. When the section refers to the company changing "its" name, it recognizes the continued existence of the company notwithstanding the change. |
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A change of name of a company does not result in its dissolution and incorporation of a new company under a new name. Section 21 permits a company to change its name in the manner as prescribed. Sub-section (3) expressly provides that the change of name will not affect any right or obligation of the company and that legal proceeding in the old name will not be rendered defective but will be continued by or against the company in its new name. The expression used in the section is "the company" and not "old company", or "new company", or "dissolved company". There
are further indications that despite change of name, the entity continues. |
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Section 21 enables a company to change its name by a given method, viz., by a special resolution and with the approval of the Central Government signified in writing. It does not provide for altering the entity but only the name. This is also made quite clear by the provisions of section 23. Sub-section (1) of section 23 states that where a company changes its name in pursuance of section 21 or section 22, the Registrar shall enter the new name on the register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein and the change of name shall be complete and effective only on the issue of such a certificate. It would be observed that the emphasis is on the expression 'change of name'. (Kalipada Sinha v Mahalaxmi Bank Ltd. AIR 1966 Cal 585) |
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2. Right to sue: A change of name under section 21 does not affect the rights and obligations of the company or render defective any legal proceedings by or against it, and any legal proceedings, which might have been continued or commenced by or against the company by its former name, may be continued by or against the company by its new name. |
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When a company is converted into a public company, apart from the change in its name, the constitution and the entity of the company is not affected in any other manner and the legal proceedings instituted by its former name can be continued by its new name.(Solvex Oils & Fertilizers v Bhandari Cross-Fields (P) Ltd. (1978) 48 Comp Cas 260 (P&H)) |
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In case of change of name during the pendency of legal proceedings by or against the company, the question which arises before the court is whether the proceedings are initiated by an entity which is not in existence or by an entity in existence but only misdescribed in the plaint.[Pioneer Protective Glass Fibre P. Ltd. v Fibre Glass Pilkington Ltd. (1986) 60 Comp Cas 707 (Cal) (DB): (1985) 3 Comp LJ 309 (Cal)] If a company ceases to be in existence, the plaint is liable to be rejected [Shree Choudhary Cold Storage (1972) v Ruby General Insurance Co. Ltd. AIR 1982 Cal 124], but if the company continued to exist, the cause title of the plaint suffers from misdescription, which could be corrected by amendment of the plaint [Patel Roadways (P) Ltd. v Bata Shoe Co. (P) Ltd. 1979 (2) Cal HCN 279] |
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The first part of sub-section (3) protects the rights and obligations of the company, already acquired before the change of its name and also protects legal proceedings by or against it. The second part of the sub-section authorises the continuation of a pending legal proceeding, which was commenced by the company in its former name. The second part provides that legal proceedings commenced by or against the company in its former name, may be continued by the company after the change of its name. Nothing in this sub-section authorised the company to commence a legal proceeding in its former name at a time when it had acquired its new name, which has been put on the register of companies. Therefore, after the change of name, the company is not authorised to sue in its old name [Malhati Tea Syndicate Ltd. v Revenue Officer, Jalpaiguri (1973) 43 Comp Cas 337 (Cal): AIR 1973 Cal 78] |
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3. Tax liability: There is no substitution or succession of one legal person by another legal person in the instant case. It is only a change in name. Even in the absence of any special provision in the Income-tax Act, the change does not affect the liability of the company to pay income tax arrears.[Economic Investment Corporation Ltd. v CIT (1970) 40 Comp Cas (Cal) (DB)] |
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Assessment of tax against a private limited company is no valid explanation to contend after becoming public limited company, that the assessment is not valid. [Rajamoni Amma (N.) v DCIT (1991) 2 Comp LJ 77 (Ker): (1991) 72 Comp Cas 728] |
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4. Execution of decree: The object of the section is to provide that notwithstanding the change in the name, there is no alteration in the constitution or the legal status of the company. Even after the name of a company is altered by special resolution and sanction by the Registrar is accorded under this section the company continues to possess the same rights and is subject to the same obligations as before the change. Therefore, if a company has the power to execute a decree in its old name it has a right after the change to execute the decree in its new name. The fact that alteration in the name was not brought to the notice of the court would not in any manner render defective or irregular proceedings initiated by a company in its former name. A decree obtained by a company in its former name can be executed by it in the new name after it has obtained a certificate for the altered name. The change of the name does not affect the rights of the company. It is not necessary that the new name should have been entered in the decree. [Abdul Qayum (F S) v Manindra Land & Building Corporation Ltd. (1955) 25 Comp Cas 143 (All): AIR 1955 All 192] |
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5. Shareholding by company: The company which has changed its name would be entitled to ask those companies in which it is holding shares, to substitute its old certificates by new ones.[Sulphur Dyes Ltd. v Hickson & Dadajee Ltd. (1995) 83 Comp Cas 533 (Bom)] |
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2. Change of Objects of a Company |
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A company may change its objects as enshrined in its memorandum of association in accordance with the provisions of Sections 17, 18 and 19 and any other applicable provisions, if any, of the Companies Act, 1956. |
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Section 17 of the Act lays down that a company may, by special resolution, alter the provisions of its memorandum with respect to its objects so far as may be required to enable it – (a) to carry on its business more economically or more efficiently; or (b) to attain its main purpose by new or improved means; or (c) to enlarge or change the local area of its operations; or (d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company; or (e) to restrict or abandon any of the objects specified in the memorandum; or (f) to sell or dispose of the whole or any part of the undertaking or of any of the undertakings, of the company; or (g) to amalgamate with any other company or body of persons. |
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Section 18 (1) of the Act requires such a company to file with the Registrar a copy of the special resolution passed by the company in relation to clauses (a) to (g) of Sub-section (1) of Section 17, within one month from the date of such resolution 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. |
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Sub-section (2) of Section 18 states that the certificate shall be conclusive evidence that all the requirements of the Act with respect to the alteration have been complied with and henceforth the memorandum so altered shall be the memorandum of the company. |
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Section 19 of the Act lays down that no such alteration made under Section 17 of the Act shall have any effect until it has been duly registered in accordance with the provisions of Section 18. |
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Sub-section (2) of Section 19 states that
if the documents required to be filed with
the ROC under Section 18 are not filed within the time allowed under that section
such alteration made under Section 17 and all proceedings connected therewith, shall, on the expiry of such period, become void and
inoperative. |
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SPECIMEN BOARD RESOLUTION FOR CHANGE OF NAME |
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RESOLVED THAT (a) subject to the approval by the Company by a special resolution to be passed at a general meeting and of the Central Government under section 21 of the Companies Act, 1956, the name of the Company be and is hereby changed from '..... Ltd' to '..... Ltd'; (b) the Company Secretary be and is hereby authorised to make the application in e-form 1A to the Registrar of Companies for ascertaining the availability of the proposed name and an application for approval for the change of name as above and to do such other acts, things and deeds as may be necessary to do to give effect to this resolution. |
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SPECIMEN OF THE SPECIAL RESOLUTION FOR CHANGE OF NAME OF THE COMPANY |
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“RESOLVED THAT – (i) subject to the approval of the Central Government, pursuant to the proviso to Section 21 of the Companies Act, 1956, as a consequence of the conversion of the company from a private limited company into a public limited company, the name of the company be and is hereby changed from “............ Private Limited” to “.......... Limited”; and (ii) clause I (name clause) in the memorandum of association of the company be and is hereby altered by substituting the same with the following: I. The name of the company is .....................Limited.” |
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Explanatory Statement |
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The Board of directors of the company had, at its meeting held on ......., resolved that the consequent upon conversion of the company from private limited company to public limited company, the name of the company be changed from “............ Private Limited” to “……………….......... Limited” and accordingly clause I (name clause) in the memorandum of association of the company is to be altered by substituting the same with a clause as set out in the notice for approval of the shareholders of the company. |
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I. The name of the company is .................Limited. |
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No director is concerned or interested in the proposed resolution. |
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Note: The above special resolution is a composite one for change of name of the company and also for change of name clause in the memorandum of association of the company. Alternatively, the company may pass two separate special resolutions viz., (i) for change of name of the company and (ii) for change of clause I (name clause) in the memorandum of association of the company. In such a case part (ii) of the resolution need not be incorporated in the above resolution and in addition the following special resolution (Annexure II) may also be passed. |
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SPECIMEN OF THE SPECIAL RESOLUTION FOR ALTERING THE MEMORANDUM OF ASSOCIATION (NAME CLAUSE) OF THE COMPANY |
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RESOLVED THAT pursuant to Section 16 of the Companies Act, 1956, and consequent upon conversion of the company from a private limited company into a public limited company, clause I (name clause) of the memorandum of association of the company be and is hereby altered by substituting the same with the following: |
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“Clause I. The name of the company is ............... Limited.” |
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Explanatory Statement |
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The Board of directors of the company had, at its meeting held on ......., resolved that the consequent upon conversion of the company from private limited company to public limited company, the name of the company be changed from “............ Private Limited” to “.......... Limited” and accordingly clause I (name clause) in the memorandum of association of the company is to be altered by substituting the same with new clause I as set out in the notice. |
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Hence, the proposed special resolution is commended for approval by the members. |
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No director is concerned or interested in the proposed resolution. Regards |
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Company Secretary
Coimbatore