To ease the process of company incorporation, the Ministry of Corporate affairs has amended Rules in regards to reservation of name of companies. With the amendment, reservation of name for the proposed company is less restrictive with more opportunities. Name approval norms get easy and simplified.

MCA vide Notification dated 22nd January, 2016, has amended Companies (Incorporation) Rules, 2014 by way of Companies (Incorporation) Amendment Rules, 2016, with effect from 26th January, 2016.

 

In the Companies (Incorporation) Rules, 2O14,

• In rule 8(2) (b)-
• sub-clause (ii) shall be omitted;
• sub-clause (x) shall be omitted; and
• sub-clause (xvii) shall be omitted.

(ii) Rule 8(3) shall be omitted.

(iii) Rule 8 (4) shall be omitted.

 

Analysis of amendments:

1. Rule 8(2) (b) (ii) omitted:​ ​Now,​ ​the name shall be considered desirable even if it is not in consonance with the principle objects of the Company
2. Rule 8(2) (b)(x) omitted ​:  Now, abbreviated name of company based on the name of the promoter will be allowed.
3. Rule 8(2) (b)(xvii) and Rule 8(3) omitted: Now, there is no need to show the scope, scale of activity in the name of Company while incorporation and change in name.
4. Rule 8(4) omitted: Now, if the proposed name is based on the name of the relatives of the promoters / any other person, no need to obtain​/ attach NOC and proof of relationship of such person.

 

Rule 9 shall be substituted namely: – “An application for the reservation of a name shall be made in Form No. INC 1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 which may be approved or rejected, as the case may be, by the Registrar, Central Registration Centre.”

 

Central Registration Centre (CRC) shall have territorial jurisdiction all over India, for discharging or carrying out the function of processing and disposal of applications for reservation of names under the provisions of the Companies Act, 2013.

 

In Rule 36 (b) the following shall be inserted-

‘(ba) After the resubmission of the documents and on completion of second opportunity, if the registrar still finds that the documents are defective or incomplete, he shall give third opportunity to remove such defects or deficiencies;’

Provided that the total period for re-submission of documents shall not exceed a total period of thirty days

 

In simple words, it means that:

• Now there are THREE RE-SUBMISSION opportunities instead of two opportunities.
• Total period for re-submission of documents shall not exceed a total period of 30 days.

 

In totality, we can say that the name approval process gets easier and also there will be more chances to convince the Ministry with the same prescribed fees. So, hurry up and reserve the name for your proposed company with Taxmantra.

 

Download the notification.

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