Introduction

Name Clause is the fundamental clause in the contents of ‘MoA’ which can be described as the condition of incorporation of company.  Section 13 is related to ‘Alteration of memorandum’ in which section 13(2) is related to ‘changing the name of a company’ and section 16 is related to “Rectification of name of company” which are discussed below.

Name Clause

A company being a legal person, must have a name of its own because it’s the symbol of its existence. But it cannot be registered with a name which, in the opinion of the Central Government is undesirable. It should not contravene the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950, nor it should suggest any kind of backing or protection by government (eg using ‘national’ in name). A company should not adopt a name which is identical or resembling too nearly to a existing company which is already registered. Such names may be declared undesirable by the Central Government, and may be restrained from adopting such an identical, misleading name.

In order to avoid the possibility of an identical name by a new company, the promoters have to take advance approval of the name from Registrar of Companies. Sub-section 5 of Section 4 are related to the submission and reserving the name of the company by Registrar.

Alteration of Name Clause

1. The name of the company can be altered by a special resolution and with the approval of the Central Government in writing. Approval of the Central Government is not necessary if the change relates to the addition or deletion of the word ’private’ in the name of company consequent to the conversion of a private company to public company or from public company to private….Relevant sections 13(1) & 13(2)

2. As per section 13(3), the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name.

3. Under section 16, of the Act, ‘rectification of the name of the company’ is required to be carried out.

Section 16(1), Where a company by oversight or by any other way, whether first registration or on its registration by a new name, is registered by a name which is identical with or too nearly resembles the name which

Section 16(1)(a) in the opinion of the Central Government, is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose;

As per section 16(1)(b) if the name of the company resembles with some other trade mark then, the registered proprietor of that trade mark may submit an application to the Central Government under the provisions of the Trade Marks Act, 1999 within three years of incorporation or registration, or change of name of the company, then the Central Government may direct the company to change the name of the company.

As per section 16(2), where a company changes its name or obtains a new name under sub-section 1 of section 16, it should inform the change to the Registrar along with order copy of the Central Government and the Registrar, shall carry out necessary changes in the certificate of incorporation and the memorandum.

As per section  section 16(3),  If a company is in default in complying with the directions given under sub section 1, the Central Government shall allot a new name to the company and the Registrar, should enter new name in the register of companies and issue a fresh certificate of incorporation.

(Earlier If a company made default in complying with any direction, as per section 16(3), the company shall be punishable with fine of one thousand rupees for every day during which the default continues and every officer who is in default shall be punishable with fine which shall not be less than five thousand rupees but which may extend to one lakh rupees.

But, now as per new provision If a company is in default in complying with any given direction the Central Government shall allot a new name to the company and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter.)