Reasons Why Companies Change Their Name
A change of company name is sometimes necessary. It might have to take place due to legal issues; if a different company has officially been registered under the same name and this name has been trademarked by its business owner, the newer company will be forced to change its name. The nature of such trademarks may sometimes change as time passes.
In every country, there will be a public authority that handles all company registrations and oversee all matters related to company registration, including company name changes. Such is the case in Malaysia as well. In Malaysia, this public authority is the Companies Commission of Malaysia (SSM). SSM is to check that all company names are not similar to any other company name which has already been registered in Malaysia. Should SSM deem a proposed company name to be satisfactory, the business owner will receive exclusive rights to use that particular company name in Malaysia. Once this has been done, no other company can operate in Malaysia under the same name. However, in certain rare and exceptional circumstances, another company might make a claim to that name because it believes that it has a pre-existing right to the company name. Should such a claim be approved, this company may ask the other company to cease operations under the company name and change it. It must, however, be emphasized that this is an extremely rare scenario.
The reason for changing the company name might also be related to increasing the marketability of the company. Another possibility as to why a company may have changed its name is if the company has been acquired. In some instances, the owners of the company might even initiate a company name change of their own volition.
There are many other reasons as to why a company might opt to change its name. A company that changes its name is not necessarily one which is in the midst of financial troubles; there might be other legal reasons linked to the change of the company’s name.
How a Company Owner in Malaysia May Change the Company’s Name
All businesses are expected to develop, grow, and evolve as time passes. Therefore, the original name of a business might no longer suit the business’s target market, business activities or branding strategy after some time. In Malaysia, there are some relatively simple methods to officially change the name of a business without having to start over from the beginning. In general, the process is not as complex as some might assume. When such is done, the notifying of customers and changing of marketing material must also be done. There will also be several legal matters which are to be settled.
The Process of Changing the Name of a Malaysian Company
The first step in the process of changing a company name in Malaysia is that of discussing the proposed name change with the company secretary. Should the company secretary give the change the go-ahead, the company secretary will then make an application with SSM. After SSM has provided due approval for the name change, the company secretary will ensure that all relevant directors’ resolutions and documents related to extraordinary general meetings (EGMs) are ready. Every document must be signed by all of the directors and shareholders to confirm their approval of the name change. Once they have done so, the company secretary must submit Form 11 to SSM. Subsequently, SSM will issue Form 13, which serves as confirmation of the company’s name change.
Regardless of the name of the company or whether the name of the company is to be changed, many people, whether those from Malaysia or abroad, have decided to set up companies in Malaysia. If you are one of the people who would like to do so, we at Paul Hype Page & Co can be of service to you. We will see to it that your company incorporation in Malaysia is a smooth and problem-free experience. If you need us to, we will also contact SSM for further assistance or information on your behalf.
Regulations Related to Company Name Changes in Malaysia
In Malaysia, there are certain regulations which specifically pertain to changes of company names. One of these relates to special resolutions. A company may agree to a change of name by way of special resolution. If such is done, the name is to be changed to a name by which the company could have been registered without the potential violation of any other laws or regulations related to changes of company names.
After SSM has given its approval regarding the new name, it is to issue an official document certifying that the company will now be using its new name. The new name will take effect from the time of the issuance of the document in question.
If the name of a company is a name by which, if the company had been registered under that name, the company would have violated laws, the company may by special resolution change its name to a name by which the company would not have violated any laws. This may be done regardless of whether the name in violation of the law was selected inadvertently or deliberately and whether the name was the company’s original name.
Any change of company name will not have any permanent internal effects. This means that the identity of the company, any rights or obligations of the company, and any legal proceedings by or against the company will remain as they are. Any legal proceedings that might have been continued or commenced by or against the company under its former name may continue to be conducted under its new name.
Should the winding up of a company take place within one year after the company has changed its name, the former name as well as the existing name of the company is to be placed on all advertisements and notices which may be related to the winding up.
A business name is the foundation of the company’s brand. If the business name no longer reflects the brand, target market, or products supplied by the business, a name change should certainly be considered. Of course, those who do so are to follow the proper legal steps so that they do not fall afoul of the law.