Case Study on Change of Main Objects and Change of Name of the Company under the Companies Act, 2013
A Company which intends to change its name or change its main objects at any time after the incorporation can do so only after complying with the applicable provisions of Companies Act, 2013 (the Act) as discussed below.
Change of name of the Company
As per Section 13(2) of Companies Act, 2013, any change in the name of a company shall be subject to the provisions of sub-sections (2) and (3) of Section 4 and the Companies Incorporation Rules and it shall be effective only with the approval of the Central Government in writing.
However, no such approval shall be required where the change in the name of the company is due to addition or deletion of the word ‘Private’, as result of conversion of the company from Private to Public or vice-versa.
An application must be filed in Form INC-24 along with the fee for change in the name of the company and a new certificate of incorporation in Form INC-25 will be issued to the company after the name change as per Rule 29(2) of the Companies (Incorporation) Rules, 2014.
Pursuant to Section 13 (3), the Registrar shall replace the old name of the Company with the new one in the Register Of Companies maintained by him and issue a new certificate of incorporation with the new name. Any such change of name is incomplete and ineffective until unless the fresh Certificate of Incorporation is issued.
Rule 29(1) of the Companies (Incorporation) Rules, 2014 restricts the name change, if the company has defaulted in filing its Annual Returns or Financial Statements or any document is due for filing with the Registrar or has defaulted in repayment of matured deposits or debentures or interest on deposits or debentures.
Change of Object Clause
The Memorandum of Association (MoA) is the chartered document that defines the purpose and range of activities of a company in its object clause. The change of an object clause requires alteration of the MOA.
As per Section 13(9) of the Companies Act, 2013, the Registrar shall register any alteration of the memorandum with respect to the objects of the company and certify the registration within a period of thirty days from the date of filing of the special resolution.
The client was engaged in the business of portfolio management and security investments. However, due to losses in the above business the client wanted to change its activity to software and so wanted an alteration of its main objects and change of name.
In this regard, the client approached SimplyBiz for this exercise and after understanding the facts of the case in detail, we initiated the process.
On a high level, the objective of the company can be achieved by taking up two broad processes. Firstly -changing the main objects and the secondly – Change in the name of the company. Each process involves a sequence of activities to be undertaken and the same are mentioned below:
- As a first step, we had to understand the business that client wants to undertake and analyse whether it was a lawful business in India. Further, we also had to analyse whether the new business required any approval from the sectoral regulators viz., Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDA) etc.,
- In the present case, the client wanted to change its objects to software business. Therefore, there was no requirement to obtain any approval from the sectoral regulators.
- We initiated the process by coordinating with the client and drafted the main objects that reflect the software business. Further, after receipt of confirmation on the draft object we initiated preparation of the requisite documentation for this exercise i.e., Board meeting and general meeting related documents, Altering the MOA, and other miscellaneous documents. As there was a change in the industrial activity of the company in present case, therefore one of the major point was to determine “main division of new industrial activity of the company and description of the main division” which is required to be mentioned in the Form MGT-14. Thereafter, filed Form MGT-14 with the Registrar of Companies (RoC).
- The Form MGT-14 was approved by the RoC within 30 days of submission without any resubmission and new Certificate of incorporation was issued by the RoC to the client
- Further, after change of main objects we proceeded with change of name of client. First of all we conducted preliminary search of the two new names that client proposed on the MCA website and IP India to determine whether the new names meets the requirements of Section 4(2) of the Act. The names met the requirements of Section 4(2) of the Act.
- Further, we prepared requisite Board meeting documents and filed application for reserving the new names of client by filing Form Reserve Unique Name (RUN) on the MCA Website. The applied names were approved and reserved by the CRC for 60 days.
- Thereafter, we initiated preparation of the requisite documentation for change of name i.e., Board meeting and general meeting related documents, Altering the Articles of Association (AoA) and Memorandum of Association (MoA), detailed application and other miscellaneous documents. Thereafter, filed Form MGT-14 which was approved by RoC with 30 days of filing and post approval of Form MGT-14 filed Form INC-24 with the RoC.
- However, some additional questions/queries were raised by the RoC officials on the application and the Form INC-24 was put up for re-submission. We replied to the queries raised by RoC and re-submitted Form INC-24. Thereafter, the Form INC-24 was approved, and new Certificate of incorporation was issued by the RoC to the client.
- Thereafter, we guided the client on the change of name on the name boards & letter heads and also intimation to various central and state, PAN, TAN, and GST etc. authorities,
The entire assignment was completed in a smooth & seamless manner. Our experience of handling various assignments of change of main objects and name of the Companies has given us considerable exposure on the critical aspects to be looked into, in the process. We have undertaken similar assignments for other companies as well and the process has been smooth & seamless.
If you are looking for compliance support, we can help you with the same. SimplyCorp is a solution that offers comprehensive and end-end management of Corporate Governance & Secretarial Compliances covering all stages of entity life cycle. If want to know more on the compliance requirements and outsource the same to us, please write to our Product Head – Ms. Vaishali Vohra at the mail ID email@example.com or SimplyCorp@simplyBiz.in.