Name Clause Alteration Under Companies Act 2013
Under the Companies Act 2013, the status of a Company is an artificial person. It has got its own identity. Therefore, it has the right to sue others and the right to be sued by others. It is distinct from its directors. The main documents of the company are the Memorandum of Association i.e. called MOA and Articles of Association i.e. called AOA.
Memorandum of Association consists of 5 clauses –
- Name Clause
A company is a separate legal identity. It must have a name to distinguish itself from others. It protects the company from others. It can have any name except-
1. A name that is similar to or resembles another company should not be taken by the company so as to confuse the customers.
2. A name that creates a bad impact on the public or central government.
- Situation Clause
Registered office address i.e., in which state is the registered office is situated. It will tell the domicile of the company. Mentioning of registered address is not required to mention in MOA just state need to be mention.
- Object Clause
It is a very essential clause in the Memorandum of Association. It tells the company activities and specifies the scope of the company. It ensures the shareholders that other business will not risk their company. The dealing with the outside environment is within the powers i.e., stated in MOA.
- Liability Clause
It tells the liability of the members. The liability of the members is restricted to the shares held by them.
The liability of directors may be limited if mentioned in the memorandum.
- Capital Clause
Memorandum of Association having share capital must specify the Share Capital i.e., the amount of Share Capital which the Company is registered i.e., the Authorized Share Capital or Paid-up Share Capital.
- Association Clause
This clause tells about the subscribers and the signing authority of the Company. The Subscribers of the company subscribe to the shares and tells what number of shares are being taken up by the company.
The Company after Incorporation can change its name as mentioned below-
- Conversion of Company from public to private
- Conversion of name from public to private
- Change of name from ABC limited to XYZ limited.
If a company is deciding to change its name then, it leads to the Alteration of Name Clause in the Memorandum of Association. It is dealt with Section 13 of Companies Act, 2013. All 6 clauses of MOA of a company can be changed merely by passing Special Resolution.