Naming a company and changing the name - An analysis

Dr. SHAKUNTALA MISRA NATIONAL REHABILITATION UNIVERSITY

2018 - 19

Lucknow

Faculty of Law

PROJECT ON

“Naming a company and changing the name - An analysis”

For

CORPORATE LAW – I

Course: B.Com. LL.B (Hons.) 5th Semester

Submitted by

UTKARSH GARG

B.Com LL.B/16-17/28

Roll No. - 164140069

Under the Supervision of

SHAIL SHAKYA
(Asst. Professor in Law)

Faculty of Law

DSMNRU

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 Naming a company and changing the name - An analysis

ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistance from
many people and I am extremely fortunate to have got this all along the completion of my
project work. Whatever I had done is only due to such guidance and assistance and I would
not forget to thank them.

I respect and thank SHAIL SHAKYA SIR , for giving me an opportunity to do the project
work in “Naming a company and changing the name - An analysis”and providing me all
support and guidance which made me to complete the project on time. I am extremely
grateful to him for providing such a nice support and guidance.

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 Naming a company and changing the name - An analysis

TABLE OF CONTENTS

I. RESEARCH METHODOLOGY.............................................................................4
II. INTRODUCTION ...................................................................................................5
III. OVER VIEW OF COMPANY NAMING PROCEDURE .....................................6
IV. NAME AVAILABILITY GUIDELINE ............................................................... .7
V. NAMING OF COMPANY IN INDIA ................................................................. 10
VI. CHANGING NAME OF A COMPANY ............................................................. 13
VII. CONCLUSION ...................................................................................................... 17
VIII. BIBLIOGRAPHY .................................................................................................. 18

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RESEARCH METHODOLOGY

Objectives of Study:

The basic objective of my study is to discuss the procedures involved in the naming of a
company and changing the name of a company under the Companies Act 2013.

Scope of Study:

The scope of my study includes the study various legal issues and the analysis of case laws
with regards to the naming and changing the name of a company under the Companies Act
2013.

Research Methodology:

This project work is descriptive & analytical in approach. The research methodology is
secondary or non-doctrinal in nature. Books & other references as guided by faculty of
Corporate Law are primarily helpful for the completion of this project.

Sources of data

The researcher has relied on both primary and secondary sources of data. Primary sources
include the bare texts of various cases and secondary sources include books, magazines,
journals and web resources.

Mode of writing
The mode of writing is descriptive and analytical.

Mode of citation
A uniform mode of citation has been followed

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 Naming a company and changing the name - An analysis

INTRODUCTION

In India, incorporation of a company is governed by the Companies Act 2013 (Section-7)1. It

is the most important piece of legislation that empowers the Central Government to regulate
the formation, financing, functioning and winding up of companies. It applies to whole of
India and to all types of companies, whether registered under this Act or an earlier Act. But it
does not apply to universities, co-operative societies, unincorporated trading, scientific and
other societies.

The Act is administered by the Central Government through the Ministry of Corporate
Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee,
Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC)
controls the task of incorporation of new companies and the administration of running
companies.

The Official Liquidators who are attached to the various High Courts functioning in the
country are also under the overall administrative control of the Ministry. The set-up at the
Headquarters includes the Company Law Board, a quasi-judicial body, having the principal
Bench at New Delhi, an additional principal bench for Southern Region at Chennai and four
Regional Benches located at New Delhi, Mumbai, Kolkata and Chennai. The organisation at
the Headquarters also includes two Directors of Inspection and Investigation with a
complement of staff, an Economic Adviser for Research and Statistics and other Officials
providing expertise on legal, accounting, economic and statistical matters.

The four Regional Directors, who are in charge of the respective regions, comprising a
number of States and Union Territories, inter alia, supervise the working of the Offices of
Registrars of Companies and the Official Liquidators working in their regions. They also
maintain liaison with the respective State Governments and the Central Government in
matters relating to the administration of the Companies Act, 2013.

Registrar2 of Companies (ROCs) appointed under Section 6093 of the Companies Act,
covering various States and Union Territories, are vested with the primary duty of registering
companies floated in the respective States and the Union Territories and ensuring that such
companies comply with the statutory requirements under the Act. Their offices function as
registry of records relating to the companies registered with them.

1
Incorporation of a company
2
Section – 2(75) companies act 2013
3
Mca.gov.in/contact.html

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Overview of Company and naming procedures

One of the first and very important things one has to do with respect to starting a company is
finding a suitable name. While it is important to be creative and take into account market
research and economic and strategic factors while deciding the name, something that people
often overlook is the law. There are two reasons why you need to understand the law with
respect to naming your company – firstly, because while registering a Company or LLP you
need to register the name with Registrar of Companies, and secondly because you need to
protect the name as a trademark. A trademarked name is something that only one business or
individual can enjoy – if someone else has already registered it – you cannot use it at all. If
you do start a business with the same name by mistake, you may be taken to court and made
to pay compensation apart from being forced to discontinue using that name. That’s
potentially damaging in terms of business because your clients/customers know you by a
name – changing it can confuse them, and in an online market – makes you difficult to find.
Also, if you cannot register a trademark yourself, that opens you up to unfair exploitation by
others who may use the same name and get a free ride on your good will – or make a bad
name for you if they are providing unsatisfactory services or products.

However, how to trademark a name is a different issue which I am not covering here. This
present project is going to tell that how to get a name registered with Registrar of Companies
and what one needs to do for that.

Companies Act, states that no company should be registered with an undesirable name4. A
name is considered to be undesirable if it is identical with or too nearly resembling with name
of a company in existence or a registered trade-mark or a trade mark which is subject of an
application for registration, of any other person under the Trade Marks Act, 1999. Once the
new rules made by Ministry of Corporate Affairs (MCA) is given effect to, before applying
for registration of a company, one would be required to search on the MCA website for
similar names before and be sure that the proposed name is unique before applying. You can
do that on this link. Then you need to do a trademark search which you can do here.

4
EMBLEMS AND NAMES (Prevention and improper use ) ACT,1950

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Name Availability Guidelines

Company Name approval and allotment process in India is administered by the Ministry of
Corporate Affairs (MCA) as per the Company Name Availability Guidelines issued under
Companies Act 2013.

As per the Company Name Availability Guidelines;

THE NAME OF A COMPANY SHOULD

 Be unique

 Contain a noun and an activity word that reflects its objectives

 Be in line with Company Name Guidelines issued by Ministry of Corporate Affairs.

THE COMPANY NAME SHOULD NOT

 Be same, similar, identical or resembling to the name of an existing Company or LLP

registered. Phonetically similar names also to be avoided.

 Be similar of a registered trade mark or a trade mark for which an application has
already been filed

 Be Offensive

 Be Undesirable in the opinion of the Central Government (Undesirability of names

explained separately

Company Name - Undesirable Names

The name shall be considered undesirable, if;

 It Contravenes the provisions of the Emblems and Names (Prevention and Improper
Use) Act, 1950;

 It includes the name of a registered trade mark or a trade mark which is subject of an
application for registration, unless the consent of the owner or applicant for
registration, of the trade mark, as the case may be, has been obtained and produced by
the promoters;

 It includes any word or words which are offensive to any section of the people;

The name shall also be considered undesirable, if-

 the proposed name is identical with or too nearly resembles the name of a limited
liability partnership;

 it is not in consonance with the principal objects of the company as set out in the
memorandum of association; Provided that every name need not be necessarily

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indicative of the objects of the company, but when there is some indication of objects
in the name, then it shall be in conformity with the objects mentioned in the
memorandum;

 the company’s main business is financing, leasing, chit fund, investments, securities
or combination thereof, such name shall not be allowed unless the name is indicative
of such related financial activities, viz., Chit Fund or Investment or Loan, etc.;

 it resembles closely the popular or abbreviated description of an existing company or

limited liability partnership;

 the proposed name is identical with or too nearly resembles the name of a company or
limited liability partnership incorporated outside India and reserved by such company
or limited liability partnership with the Registrar:

 Provided that if a foreign company is incorporating its subsidiary company in India,

then the original name of the holding company as it is may be allowed with the
addition of word India or name of any Indian state or city, if otherwise available;

 any part of the proposed name includes the words indicative of a separate type of
business constitution or legal person or any connotation thereof e.g. co-operative,
sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA,
PTE, Sdn, AG etc.;

 Explanation.- For the purposes of this sub-clause, it is hereby clarified that the name
including phrase ‘Electoral Trust’ may be allowed for Registration of companies to

 be formed under section 8 of the Act, in accordance with the Electoral Trusts Scheme,
2013 notified by the Central Board of Direct Taxes (CBDT):

 Provided that name application is accompanied with an affidavit to the effect that the
name to be obtained shall be only for the purpose of registration of companies under
Electoral Trust Scheme as notified by the Central Board of Direct Taxes;

 the proposed name contains the words ‘British India’;

 the proposed name implies association or connection with embassy or consulate or a

foreign government;

 the proposed name includes or implies association or connection with or patronage of

a national hero or any person held in high esteem or important personages who
occupied or are occupying important positions in Government;

 the proposed name is vague or an abbreviated name such as ‘ABC limited’ or ‘23K
limited’ or ‘DJMO’ Ltd: abbreviated name based on the name of the promoters will
not be allowed. For example:- BMCD Limited representing first alphabet of the name
of the promoter like Bharat, Mahesh, Chandan and David:

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 Provided that existing company may use its abbreviated name as part of the name for
formation of a new company as subsidiary or joint venture or associate company but
such joint venture or associated company shall not have an abbreviated name only e.g.
Delhi Paper Mills Limited can get a joint venture or associated company as DPM
Papers Limited and not as DPM Limited:

 Provided further that the companies well known in their respective field by
abbreviated names are allowed to change their names to abbreviation of their existing
name after following the requirements of the Act;

 the proposed name is identical to the name of a company dissolved as a result of

liquidation proceeding and a period of two years have not elapsed from the date of
such dissolution:

 Provided that if the proposed name is identical with the name of a company which is
struck off in pursuance of action under section 248 of the Act, then the same shall not
be allowed before the expiry of twenty years from the publication in the Official
Gazette being so struck off;

 it is identical with or too nearly resembles the name of a limited liability partnership
in liquidation or the name of a limited liability partnership which is struck off up to a
period of five years;

 the proposed name include words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’,
‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., unless a
declaration is submitted by the applicant that the requirements mandated by the
respective regulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with
by the applicant;

 the proposed name includes the word “State”, the same shall be allowed only in case
the company is a government company;

 the proposed name is containing only the name of a continent, country, state, city such
as Asia limited, Germany Limited, Haryana Limited, Mysore Limited;

 the name is only a general one, like Cotton Textile Mills Ltd. or Silk Manufacturing
Ltd., and not Lakshmi Silk Manufacturing Co. Ltd;

 it is intended or likely to produce a misleading impression regarding the scope or

scale of its activities which would be beyond the resources at its disposal:

 the proposed name includes name of any foreign country or any city in a foreign
country, the same shall be allowed if the applicant produces any proof of significance
of business relations with such foreign country like Memorandum of Understanding
with a company of such country:

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Provided that the name combining the name of a foreign country with the use of India like
India Japan or Japan India shall be allowed if, there is a government to government
participation or patronage and no company shall be incorporated using the name of an enemy
country. Explanation.- For the purposes of this clause, enemy country means so declared by
the Central Government from time to time.

To determine identical name, following shall be disregarded:

(i) Word like Private, Limited, LLP etc;

(ii) Word like company, Corporation etc;
(iii) Plurals of a word;
(iv) Type, case, space, punctuation marks;
(v) Joining two words together or separating them , when it does not make them
distinguishable;
(vi) Different tense of a word, a number written in words or in numbers;
(vii) Different phonetic, spellings of a word or number;
(viii) Addition of internet related designations;
(ix) Addition of New, Modern, Shree, Om, Jai, The etc. or addition of name of any
place unless there is a no objection certificated through board resolution by
existing company;
(x) Different combination of same words;
(xi) Hindi or English translations of same words;

There are some additional features of present guidelines:

(i) No need of main object in proposed name with some exceptions;

(ii) In finance, housing finance, chit fund, leasing, investment, securities, etc. name
should indicate main object;
(iii) No word indicative of misleading constitution of company allowed like society;
(iv) Abbreviated name for news companies not allowed, general (generic) name also
not allowed;
(v) Name of dissolved company not allowed for 2 years and name of struck off
company not allowed for 20 years;
(vi) Inclusion of words like insurance, bank, stock exchange, venture capital, assets
management, nidhi , mutual fund may be allowed when declaration given by
applicant that requirement of sector regulator/law has been complied;
(vii) Name of word "state" is reserved for government companies. Name containing
only name of continent, country, state and city not allowed;
(viii) No word or expression giving any impression of connection with any government
not allowed unless previous approval of central government;
(ix) In case of subsidiary of foreign company original name of the holding company
will be allowed with addition of word India or name of Indian state or city;
(x) Change of name not allowed in case of defaulting companies.

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Naming a company in India

For registration and incorporation of a company, an application has to be filed with Registrar
of companies. Application for registration of a company accompanied by the selected names,
Memorandum of Association and Articles of Association and other necessary documents is to
be filed with the Registrar of companies of the State in which the company is proposed to be
incorporated5.

Under the Companies Act, an entrepreneur can form two types of companies, namely a
private company or a public company.

A Private Company is one, the articles whereof contains the following restrictions:-

 Restricts the minimum paid up share capital to such an amount as may be prescribed
but which shall not be less than rupees one Lakh;
 Restricts the rights of members to transfer its shares, if any;
 Limits the number of its members to fifty excluding the past or present employees of
the company who are members of the company;
 Prohibits any invitation to the public to subscribe for any shares or debentures of the
company;
 Does not invite or accept any deposits from persons other than its members, directors
or their relatives
 Also, the minimum number of members in a private company is two and such a
company must have the words 'Pvt. Ltd' as the last part of its name.

A Public Company, as defined in the Companies Act, has the following features:-

 Its shares are freely transferable;

 There is no ceiling on its membership;
 It can invite general public to subscribe to its shares;
 It has a minimum paid up capital of Rs. 5 lakhs or such higher paid up capital as may
be prescribed;6
 Also, the minimum number of members in a public company is seven and such a
company must have the word 'Ltd' as last part of its name.

Naming of a company must be different from names of existing companies

Remember that names are not distinguished with prefixes/suffixes, tense changes or adding
words like ‘The’ or ‘and’ or ‘co’ or ‘industries’ which are generic. The keyword(s) in the
name must be substantially different.

Even a different spelling of word does not work as long as the sound is the same. If a there is
a company named Intelligent Pvt. Ltd, you cannot name your new company Intelligent Pvt.
Ltd or The Intelligent Pvt. Ltd.
5
mca.gov.in
6
ACCORDING TO COMPANIES ACT 2013( NO MINIMUM PAID UP SHARE CAPITAL REQUIRED)

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Name must not suggest a connection with Government or international

Institutions.
Next you should also ensure that the name does not contain (or imitates or somehow conveys
that there is a connection with) any of the following mentioned in the schedule of Emblems
and Names (Prevention of Improper Use) Act, 1950.

Also, it is not only one name that you can choose. You need to provide to the Registrar on the
e-form no less than six different names in order of preference, and the names should be
indicative of the main objects of the company.

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CHANGING OF THE NAME OF A 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.

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.

INRODUCTION
The Company after incorporation can change their name by following way:

o Conversion of name from private to public, or

o Conversion of name from public to private, or
o Change of name from ABC limited to XYZ limited.

Change in Name clause of the Company involves alteration of Memorandum of Association

(hereinafter referred to as “Memorandum”) of the Company. Section 13 of Companies Act
2013 regulates the process of amendment in Memorandum of Association is applicable to all
companies. All clauses of Memorandum except Capital clause can be altered by following the
provisions of Section 13 of Companies Act, 2013 by passing special resolution.

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.

Sub Section- 2 of Section 4 of the Companies Act, 2013 provides that no company shall
be registered by name which:

 Is identical with or resemble too nearly to the name of an existing company

registered under this Act or any previous company law, or: [Section- 2 (a)]
 will constitute an offence under any law for the time being in force, or:
[Section- 2 (b)(i)]
 Is undesirable in the opinion of the Central Government. [Section- 2 (b) (Ii)].

Sub Section-3 without prejudice (Effect) to the provisions of sub-section (2) [as given above],
a company shall not be registered with a name which contains unless the previous approval of
the Central Government has been obtained for the use of any such word or expression:

 Any word or expression which is likely to give the impression that the company is
in any way connected with, or having the patronage of, the Central Government,

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any State Government, or any local authority, corporation or body constituted by

the Central Government or any State Government under any law for the time
being in force; or [Section- 3 (a)].

 Such word or expression, as may be prescribed. [Section- 3 (b)].

Alteration of Name shall not allow to following Companies:

The change of name shall not be allowed to a company:

 which has not filed annual returns or financial statements due for filing with the
Registrar or

 which has failed to pay or repay matured deposits or debentures or interest thereon

STEPS FOR ALTERATION IN MEMORANDUM OF ASSOCIATION:

STEP – I: Convey Board Meeting of Directors: (As per section 173 and SS-1)

 Issue Notice of Board Meeting to all the directors of company at least 7 days before
the date of Board Meeting.

 Attach Agenda

 Notes to Agenda

 Draft Resolution

STEP – II: Held Board Meeting: (As per section 173 and SS-1)

 Proposed new names for the company.

 Pass Board Resolution after Selection of Names.

 Authorize to Directors of Company to make Application with ROC for Name

approval

STEP-III- File – e-form- RUN with ROC:

File form RUN with ROC for approval of name:

ATTACHMENTS:

 Copy of Board Resolution.

 Approval of Owner of Trade Mark or the applicant of such application

[If proposed name(s) are based on a registered Trade Mark or is a subject matter of an
application pending for registration under the Trade Mark Act, 1999]

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STEP-IV

Name Approval Certificate from ROC, if applied name are available

STEP- V: Issue Notice of General Meeting: (Section 101)

Notice of EGM shall be given at least 21 days before the actual date of EGM. EGM can
be called on Shorter Notice with the consent of at least majority in number and ninety five
percent of such part of the paid up share capital of the company giving a right to vote at
such a meeting:

 All the Directors.

 Members

 Auditors of Company

The notice shall specify the place, date, day and time of the meeting and contain a
statement on the business to be transacted at the EGM.

STEP- VI: Hold General Meeting: (Section 101)

 Check the Quorum.

 Check whether auditor is present, if not. Then Leave of absence is Granted or Not.
(As per Section- 146).

 Pass Special Resolution.[Section-114(2)]

 Approval of Alteration in MOA.

STEP- VII: Filing of form with ROC: (Section 117)

 A. File Form MGT-14 (Filing of Resolutions and agreements to the Registrar under
section 117) with the Registrar along with the requisite filing within 30 days of
passing the special resolution, along with given documents:-

 The name once approved valid for 60 days from the date of making of application.

ATTACHMENTS:7

 Certified True Copies of the Special Resolutions along with explanatory statement;

 Copy of the Notice of meeting send to members along with all the annexure;

 A printed copy of the Memorandum Article of Associations.

B. File Form INC – 24within 30 days of passing of Special Resolution

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STEP- VIII: Issue of New Certificate:

After completing Above Procedure ROC will issue a New Certificate of Incorporation

As per Companies Amendment Act, 2017 In case of alteration of Name. Name shall be
reserved for 60 days from the date of approval of name.

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CONCLUSION
Thus, we can conclude that a company’s name is considered as an identity of a company
which may be changed with the approval of members in the general meeting. 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 Registrars of the Companies).

Some changes have been made in the procedure for the naming of a company after the
enactment of the Companies Act 2013.

Section 4(2) of the Companies Act 2013 deals with the name clause of the memorandum
which talks about the naming of a company.

It states that:

The name stated in the memorandum shall not—

(a) be identical with or resemble too nearly to the name of an existing company registered
under this Act or any previous company law; or
(b) be such that its use by the company—
(i) Will constitute an offence under any law for the time being in force; or
(ii) Is undesirable in the opinion of the Central Government.

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BIBLIOGRAPHY

1. Naming and Registering a Business, business.gov.in

2. Change of company name, Ministry of Corporate Affairs, mca.gov.in
3. NAME AVAILABILITY GUIDELINES,, General Circular No. 45/2011,
Ministry of Corporate Affairs, 8th July, 2011
4. Change of a company name, Intelligent Legal Risk Management , ipleaders.com

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