Change of Company’s name is handled on various cases through voluntary steps by Board of Directors or the members after Private Limited Company Registration. In addition to this voluntary change of company’s name, the Registrar of Companies, may during or after Private Limited Company online registration mandate the change of name of company, if the name approved is found inappropriate or nearly resembling or identical to the name of existing companies/ LLPs or Trademarks registered under Indian Trade Marks Act, 1999.
The referred circumstances are governed under Section 16 of the Indian Companies Act, 2013, which expressly provides that in any case, if the Central Government may suo motu or on representation of an interested party direct the company to change its name based on the query submitted. Said process of change of name is called rectification of the company name under Section 16. The changes can be directed after online company registration in order to prevent the interested parties and the company from conflict of the goodwill and interest due to conflicting identity in the market. The process of rectification of company’s name under Section 16 of Indian Companies Act is mainly prescribed to make correct the mistake of Registrar of Companies in approving the name.
Direction on Suo Motu action:
Below mentioned are the circumstances under which the Central Government may suo motu direct the company to change the name as per the instructions in the order. The order can be issued after Pvt Ltd Co registration or after approval of name change in the company and any time during the existence of the company:
- The registrar has allowed using the name due to inadvertence or otherwise whether for the incorporation of the company or after its registration change of name; and
- The name approved is found identical or it nearly resembles
1. The name of already existing company; or
2. The name of already existing LLP; or
3. The Trademarks registered under Trademarks Act, 1999.
On application by proprietor of registered Trademarks:
In addition to above mentioned circumstance, where the Government has suo motu issued an order, any party such as owner of the registered Trademark can make representation to the Government to direct the company for change of name within a period of 3 years from the Private Limited Company online registration or 3 years from the change of Company name. The Central Government may issue an order if it finds the name being nearly resembling or identical with the registered trademark of the proprietor. In contrary, if it does not find the grounds of application appropriate or true, the Government can also reject the application of the registered proprietor. The Central Government, before issuing an order of rectification of name to the company, shall give an opportunity of being heard to the company.
On receipt of the order by the Central Government to change the name of the company by whatsoever reason is provided in the order, the company shall initiate the procedure of change of company name by following the procedure laid under the Act and as presented in this article.
The company shall change the name of company within period of three months from receipt of the order from the Government. Further, company shall intimate same to RoC within period of 15 days from change of name.
The change of name of the company will be in force only after grant of approval by the Central Government. Here, the task of name approval is assigned to the Regional Directors of the specified offices of Registrar by notification in force. Upon change of name by the company, the Registrar of Companies will issue a fresh Certificate of Incorporation.
In case the company make default in complying the directions issued by the Central Government, the company and the officers in default, both will be held liable for the default by levy of penalty. The company shall be punished with fine up to Rs 1,000 for each day of default. The officers in default of the company shall be liable for fine of amount being not less than Rupees Five Thousand but which may extent to Rupees One Lakh.
The change of company name shall be passed through the consent of the members in the general meeting of the company before making the application for its approval. Further, the form for application in name change is the redeployed by MCA as web form referred as “RUN” (Reserve Unique Name), which on approval will reserve the name for a period of 60 days for the existing company on name change name application.
The procedure and the effect of change of name in case of voluntary change or on direction of the Government are enumerated in detail at How to change the Name of Private Company – Procedure & effect.