6 changes you must know for registration of company’s name under new Rules
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The
Govt. has notified the Companies (Incorporation) Amendment Rules, 2016
(‘Amended Incorporation Rules’). Now the process of reservation of name
of companies has been simplified. Following changes have been made for
ease of doing business in India:
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1) Name of company need not to be in consonance with principal object:
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Under
extant norms, the company’s name was necessarily required to be in
consonance with principal object, if such name resembled any object of
company. Now as per the amended Rules the name of company will not be
considered undesirable even if it is not in consonance with the
principal objects of the company as set out in Memorandum of
association. Let us understand this condition with the help of an
example. Suppose if a company wants to opt its name as ‘ABC Builders
Pvt. Ltd.’ then it is not necessary that its principal object should be
related to construction and development only. Thus, now company is free
to choose such name which is not in consonance with principal object.
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2) Usage of vague or an abbreviated name:
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Under
the extant norms there was restriction on usage of vague and
abbreviated name. How many of us knows about ANI Technologies Pvt. Ltd
but if one would say ‘OLA’ then most us might have heard of it and even
enjoyed its first free ride. ‘OLA’ could have registered its name
containing ‘OLA’ if there was no such restriction on usage of
abbreviated name. The Amended rules does away with restriction on usage
of vague and abbreviated name. Now a company can use either vague or an
abbreviated names such as 'ABC limited' or '23K limited' or 'DJMO' Ltd.
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3) No need to change name on change in business activity:
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As
per the extant norms if any company has changed its activities which
are not reflected in its name then it would be required to change its
name in line with its activities. However, such requirement has now been
done away with under the amended Rules.
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4) Central registry to dispose of name reservation application:
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Now
an application for the reservation of a name made in INC.1 shall be
approved or rejected by the Registrar, Central Registration Centre.
Earlier, the authority to dispose application for reservation of name
was with respective ROCs.
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5) Additional opportunity to remove defects:
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Now
while going for the fast-track mode of incorporation the registrar can
give third opportunity to company to remove such defects or
deficiencies.
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6) Usage of Name containing Name of other person:
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Under
the extant norms, in case the key word used in the proposed name of a
company is the name of a person other than the name(s) of the promoters
or their close blood relatives, then NOC from such other person(s) and
the proof of relation were required to be attached, respectively. Now
such requirement of furnishing NOC and proof of relation has been
removed.
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Meetesh Shiroya
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