Almost every country has unique laws/rules and requirements for change of company name; however, basic procedures regarding the change in company name across the jurisdictions are almost the same and commonly understood. In Pakistan, a company name can be changed in terms of Section 12 or 13 of the Companies Act 2017 (the “Companies Act”).
A company may change its name with the Registrar's approval or at the Registrar's direction. A company may vary its reputation on its own due to several reasons, such as:
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A company may change its name if it, through inadvertence or otherwise, is registered by a name in contravention of the provisions of Section 10 of the Companies Act.
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A company may adopt a new name to express its new identity due to its business development in the national and international arena.
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If another company takes over one company, the members may choose the name of the acquiring company, combine the two old company names, or think up altogether a new name.
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A change of management may be another reason.
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If the company intends to carry out some other appropriate/ suitable business.
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If the existing company name does not match, the business is specified in its memorandum of association.
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Sometimes the name of a company needs to remain attractive in the market, so the company seeks to change its name according to new market trends and conditions.
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Any other given reason/ reasons.
The Registrar may direct a company to change its name if the company, through inadvertence or otherwise, is registered by a name in contravention of the provisions of Section 10 of the Companies Act.
Change of name of Company under Section 12 of the Companies Act
Pursuant to Section 12 of the Companies Act, the Company can change its existing name subject to the following two (2) conditions:
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By passing a special resolution to this effect; and
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By obtaining the approval of the Registrar in writing.
The relevant provision of Section 12 of the Companies Act read as follows:
Change of name by a company
A company may change its name by special resolution and with the approval of the registrar signified in writing.
A company desiring to change its name can adopt the procedure under the law and fulfil requirements.
Where Approval of Registrar is Not Required for Change in Company’s Name
Any change in the name of a company involving only the addition or deletion from there of the expression “(Private)” or “(SMC-Private)” or “(Guarantee) Limited” or “Limited” or “Unlimited” as a result of its conversion of the status of the company as allowed by the Companies Act, shall not be deemed as a change of name. In such cases, the approval of the registrar is not required.
Step Wise Procedure for Changing the Name of the Company
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An application for a company's name change can be submitted through the following two processes.
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Manual submission of application.
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By using the services of SECP
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To meet the first condition of special resolution laid down by Section 12 of the Companies Act, an Extraordinary General Meeting (EOGM) must be convened by the company's Directors. A special resolution can for such an agenda of change of name also be passed at the Annual General Meeting (AGM). However, an EOGM may be held at a shorter notice in case of an emergency affecting the business.
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At least 21 days' notice is given to the members for the general meeting - AGM or EOGM. The draft special resolution for change of name and statement of material facts shall also be sent along with the said notice to members. In the case of a listed company, notice is also required to be published at least in one issue each of a daily newspaper in English language and a daily newspaper in Urdu language having circulation in the Province in which the stock exchange on which the company is listed and situated.
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The Special Resolution for the company's change of name is passed with a majority of at least 3/4th of the members entitled to vote as they are present in person or through a proxy in the general meeting.
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After passing the special resolution, a copy of it is filed on the prescribed Form along with paid challan of the prescribed filing fee.
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The application is then submitted to the registrar manually or online through the eServices Portal of the SECP.
Issuance of Certificate of Incorporation
Where a company changes its name, the registrar shall issue a certificate of incorporation altered to meet the circumstances of the case. On the issuance of this certificate, the name change shall be complete. Additionally, the registrar shall also enter the new name on the register in place of the former.
Effect of Change of Company Name
The name change must be noted in the memorandum and articles of association and all documents, invoices, letterheads, bills, signboards, seals, etc.
In addition, the company that changes its name, for ninety days from the date of issue of a certificate by the registrar, continues to mention its former name along with its new name (For example, XYZ (Pvt.) Limited (formerly ABC (Pvt.) Limited)) on the outside of every office or place in which its business is carried on and in all documents of the company including in bill heads, letter papers, documents, notices, official publications, invoices, etc.
No Effect on Rights and Obligations of the Company
Sub-section 3 of Section 13 of the Companies Act, provides that a change of name of the company shall not affect any of its existing rights and obligations. In other words, a title change shall not change the status or existence of the company, and its liabilities will bind it.
Sub-section, 3 of Section 13, reads as:
13..(3) The change of name shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced against the company by its former name may be continued by or commenced against the company by its new name.
