If a bank accepts a cheque for the credit of a customer's account when the cheque concerned is not made out to the exact name of the receiving account then the bank could be guilty of what is known as 'conversion', whereby funds intended for one entity are paid into the account of another. If the cheque needs altering, due to genuine error, it should be the drawer of the cheque that alters it, since it could be held as fraud if someone else were to do it and the funds ended up in the wrong entity's account. There are businesses out there who quite legitimately conduct some of their business through a sole trader account and some through a limited company. For instance, a garage business might put its car repair business through 'ABC Garages Limited' and its petrol sales through 'Joe Bloggs trading as ABC Garages'. These are two separate legal entities, so if a cheque were payable to 'ABC Garages', then it could only be paid into the account of 'Joe Bloggs trading as ABC Garages'. It would have to be made payable to 'ABC Garages Limited (or Ltd)' in order to go through the limited company account. I imagine that in the case of your son's company, the cheque was missing the word 'Limited', and the bank was trying to be helpful in order that your son's company account could be credited with the cheque. However, in doing so, they would have put your son's company at risk of being accused of fraud by altering the cheque. They should really have advised him to obtain a replacement cheque or had the drawer add the word 'Limited' and initial the alteration.
There are instances where a cheque payable to one party can be legally banked into another account, by way of an endorsement by the payee on the back of the cheque, such as "Pay ABC Garages Limited", but most cheques are printed with the words "Account Payee Only" or "A/C Payee" between the crossing (two vertical lines on the front of the cheque), which legally has the effect of preventing the money going into anyone's account apart from the payee's.
If the cheque had been paid into your son's company's account without the word 'Limited' being added, it would be possible for the drawer to challenge payment on the grounds of conversion. The drawer does not have to have folded for this to happen.
As you do not mention the amount involved, I would add that in the case of very modest amounts, a bank might be happy to shoulder the risk of being accused of conversion, since it will know its customer, its trading style and its usual business practices and they may take the view that it would be more trouble than it is worth to have the cheque altered by the drawer.