Re: Legal Opinion regarding effect of change of name of the Company.
We refer to your letter dated August 14, 2007 on the above subject.
From perusal of your letter, it appears that, “Bank 1” has duly changed its name to “BANK 1 Finance Limited”.
The Company has taken post dated cheques from its customers, as normal business practice, which are deposited with bank for clearing on future due dates. The Company has a good number of such post dated cheques issued in favour the Company’s earlier name.
In these circumstances, you have requested us to give our legal opinion as to whether BANK 1 Finance Limited has the right to take legal action under criminal law if the cheques, issued in favour the Company’s earlier name, are dishonoured.
Section 11(8) of the Companies Act 1994 states as follows:
“(8) The change of name shall not change 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 it by its former name may be continued or commenced against it by its new name.”
Therefore, the change of name does not change any rights of the Company under the Companies Act and the Company has the legal right to take any legal actions to protect its rights including legal action against its customers under section 138 of The Negotiable Instruments Act 1881 for dishonor of cheques. However, for practical reasons, the Company may, if possible, obtain fresh postdated/undated cheques from its customers issued in the name of “BANK 1 Finance Limited”, in lieu of the old ones.
If you have any further queries, please do not hesitate to contact us.
For: “The Lawyers & Jurists”