What’s in a name? Everything â€” particularly when it comes to oneâ€™s business. And that should make extreme caution the bedrock of oneâ€™s thinking when considering change of name of your company. Granted, there are justifiable reasons for a name change. Perhaps one might have bought a business with someone else’s name and heâ€™d like the operation to reflect upon. May be those operations have changed so that the current name simply misrepresents the products or services. Rule of thumb: Approach a name change carefully. Here are issues to bear in mind: Identify a substantive reason to change the name– Never change the business’ name simply because the current one has created boredom. Instead, think carefully about what might warrant such a decision â€” and make sure it’s genuinely compelling. Oneâ€™s name is a brand that touches a lot of people, and that’s a major consideration. Know what a name change really entails– Don’t ignore all the consequences of change of name of company. It doesn’t just affect the sign over oneâ€™s front door. Think about business cards, stationery, sales material and, in particular, any relevant web sites that will have to be updated. All those taken together can run into a fairly hefty price tag. Any business changing its name must maintain two web sites for at least several months so that customers going to the old site can be redirected. Can a brand name be re-established? – Even the smallest business brands its products and services with its name. If, for instance, one has acquired a family-named business with a long-established history associated with that name, determine whether it’s feasible to expect that a new name will hold onto even a portion of that valuable branding. Keep an eye on your core functions– Up to now, a fairly compelling case can be made to stick with an existing name under most circumstances. But that’s not always the case. An effective name must always mirror the primary focus of oneâ€™s business’ activity. With that in mind, give some thought to a fresh name if what one has to do have changed substantially so that a new name would better reflect that activity. Check out if a new name makes sense – If circumstances suggest that a new name may, in fact, benefit oneâ€™s business, one should not just slap on. If oneâ€™s name is even something close to a registered trademark, using it could have expensive legal consequences. Take the process slowly– No matter how immediate or compelling a quick decision may seem, it’s imperative to approach the decision of a name change as slowly, and as thoughtfully, as possible. Run the new name by customers– Even a new name that strikes every chord with the owner may hit nothing but sour notes with clients and customers. A new EIN may be required– Generally, sole proprietors, corporations, and partnerships donâ€™t need a newÂ Employer Identification Number (EIN)Â if they change their business name. However, there are certain situations where these entities may need to obtain a new EIN, like if a partnership incorporates or one partner takes over as a sole proprietor. Likewise, if a sole proprietor incorporates or takes on a partnership, a new EIN is needed. Change of name of company is a costly and disruptive process, especially for established businesses. One canâ€™t just start calling it something different. Print and online marketing materials and bank accounts will have to change, websites adjusted, domain names registered, email addresses updated, and so on. So before you take the leap, familiarize yourself with these steps. Most of them are required by law, but others are simply good business practice. As per provisions contained in Section 20 of the Companies Act, 1956, no company is to be registered with undesirable name. A proposed name is considered to be undesirable if it is identical with or too nearly resembling with: (i) Name of a company in existence; or (ii) AÂ registeredÂ trade-markÂ orÂ a tradeÂ markÂ whichÂ isÂ subjectÂ ofÂ an application for registration, of any other person under the Trade Marks Act, 1999. Change of name shall not be allowed to a company which is defaulting in filing its due Annual Returns or Balance Sheets or which has defaulted in repayment of matured deposits and debentures and/or interest thereon. Procedure for change of name of company: A company can change its name by:
- special resolution; or
- by means provided for in the companyâ€™s articles
- A Board meeting for deciding the agenda for change of name should be held and discussing the reasons for change thereof.
- Seeking name availability for proposed new name from the ROC. An application in e-form 1A is required along with fee of Rs.500.The Registrar shall intimate the applicants about the status of availability of name.
- Get the approval of members in General Meeting followed by making the necessary amendments in Memorandum of Association and Articles ofÂ Association and form 1B to give effect to change in name.
- Registration of special Resolution with ROC through form -23(Section-192)
- Filing of form-1B with ROC u/s 21 for approval of change of name of the company along with requisite fee.
Some important points to be remembered for quick approval are:
- Â Company should furnish sufficient reasons for change of name
- Proposed name should not be undesirable as per Govt. guidelines.
- For the application of abbreviated name, the company is well established and has a reputation in the market.
- All the legal proceedings by or against the company will take effect with the new name. Any legal proceedings, which might have commenced in the former name shall be continued with the new name.
Change of name by Non Banking Financial Company As per RBI guidelines, the NBF companies are required to collect approval of RBI for change in their names. Therefore, the ROC shall require the â€˜No objection Letterâ€™ from the RBI before confirming name availability. Change of name by Private Ltd Company to Public Ltd In case of conversion of company from private to public, the change in its name becomes effective only on the issue of the fresh Certificate of Incorporation by the concerned Registrar of Companies (ROC) in the changed name. Consequent to the above changes, delete the word “private” from its name. If you require any assistance in matters relating to Company Law, please feel free to visit our “Company Law Page”Â OR for Registration of New Company Or New LLP. OR, just send a query by clicking this “Contact US”, we would get back to you.