How a Firm Can Change Its Name - Essay Example

Introduction This case study provides different information however, as per the given instructions; the major focus of this study is to provide a comprehensive description of how a company can actually change its name. It is stated that the two out of three Directors have held the Board meeting and decided to change the name of the company from Toys4U Ltd to Toys4Everyone Ltd whereas the third Director of the firm has not explicitly agreed to the change of name. It is critical to note that the Companies Act 2006 is the major law which governs the change of name of the companies and according to the various sections of the Act, name of the firm can be changed under different circumstances and there are different set of rules which basically attempt to govern the change of name of an organization. Different procedural requirements that are necessary for completing the process of changing the name of an organization include passing a special resolution. Once a firm passes and special resolution and intimate the relevant authorities of the change of the name and perform certain other requirements to finally conclude the process of change in name. This report therefore will discuss as to how a firm can change its name and if there exists a conflict of interest between the Directors, what procedures and policies can be adapted to change the name of the firm according to the Companies Act 2006 and other prevailing rules and regulations that govern the name change. Change of Name According to Section 77 of the Companies Act 20061, a company can change its name by passing a special resolution. A special resolution is a resolution which can be passed with 75% of the majority whereas an ordinary resolution is passed after it gains 51% simple majority. It is important to note that the special resolution need to be in the written format and it is important that the company must inform Companies House in advance regarding such resolution as it is one of the pre-conditions for passing a special resolution.(companieshouse.gov.uk,2010). Since in this case, there are three directors and two of them are ready to change the name of the firm therefore it is sufficient that the conditions for the change of the name of the firm has been fulfilled as for as getting 75% of the majority is concerned. However, to make it effective, it is important that two directors must inform the Companies House that the firm is intending to change the name of the company and intends to pass the special resolution for this. This is also critical to understand that the prior notice requirement is necessary condition and is in addition to the condition of providing a copy of special resolution on prescribed format which is required to be submitted to the authorities after the special resolution has been passed. Special resolution that is submitted to the Companies House also needs to be accompanied by the prescribed fee which is necessary to be submitted along with the application. The current level of fee is approximately £10 which is necccesary and need to be paid by the firm to the Companies House. It is also to be noticed that the proposed name of the firm shall not fall into the restricted names category which has already been identified under the Companies Act 2006. Restrictions applied also include not naming the company in such a manner that it mislead the public as well as name shall not suggest any resemblance with her Majesty’ Government and any of the other government agencies. In this case the name is just a straightforward business name therefore these restrictions practically do not apply to the firm and firm does not need any express approval from the secretary for this. It is also important to note that the name of the firm can also be changed without the express consent of the firm. This will be under different cases and this case therefore also does not fall under these conditions. Similarly, the requirements for naming the company at the time of incorporation of the firm are relatively different too and do not apply to the firm once it is incorporated. Once the name of the firm has been changed, it does not become the new legal name of the firm until and unless a new certificate of incorporation is not issued by the Companies House. New name only becomes valid after a certificate of incorporation is issued by the House. Further once it is issued, company is also required to change or amend its memorandum and articles of association to signify the change in name so as to provide a clear and concise picture of the original name of the firm along with its old name. Thus the company has to display its old and new name together for some period of time. Alteration into the memorandum and articles of association therefore completes the process of changing the name of the Company. Finally the firm also needs to inform the tax authorities regarding the change in the name and ask for revised employer number to be allotted. Though this requirement is not under the Companies Act 2006 however it is considered as necessary for the purpose of fulfilling other regulations also. Conclusion As for as the conflict of interest and dissent of Edwardo is concerned, it is important to note that under the Companies Act, a special resolution passed with 75% majority is enough which is formed in this case as two out of three Directors form the 75% majority and can change the name of the firm regardless of the dissent or refusal by last Director to agree with the proposal. However, Edwardo may refer to the court of law to peruse his case under different set of laws and court may prevent the Directors from changing the name of the Company under pertinent rules and regulations. Under Companies Act 2006, a special resolution is enough to change the name of the Company. References Companies House UK [online]. (2010) [Accessed 1 May 2010]. Available from: . Read More