What comes in your mind when you think of any company? Yes, it’s the name of Company. It is of foremost impression when we hear it for the very first time. When an entrepreneur have an intention to register a new company, the initial step is to decide name for his company. To choose name of company is not easy task as it seems to be. Numerous do’s and don’ts under Companies Act, 2013 are specified for choosing name of company which can in turn be challenging for entrepreneur to have name of his choice. It may happen that the name which entrepreneur decides for his company is already registered by some other entrepreneur so in such case, he won’t be able to apply for same name. It will be rejected by the CRC, Delhi (Ministry of Corporate Affairs). Many times, after registration of Company or during incorporation, the concerned Registrar of Company (ROC) may order to rectify name if it comes to notice that the existing name is opted in contravention with Rule 8 of Companies (Incorporation) Rules, 2014. Sec 16 deals with Rectification in name of the Company under Companies Act, 2013.
Rule 8 deals with choosing name of the company. Few do’s and don’ts are mentioned below-
Rule 8 of Companies (Incorporation) Rules, 2014 contains in detail the above explanation.
Sec 16 of Companies Act, 2013 deals with detailed procedure and provisions for rectification in name of the Company. It consists of regulatory framework for rectifying the existing name of the Company.
Yes. Registrar of Companies have authority to order for rectification of name of the company. If a company is registered and it is found that the name opted is inappropriate or nearly resembling or identical to the name of existing companies/ LLPs or Trademarks registered under Indian Trade Marks Act, 1999, then the concerned Registrar of Company may on representation from other party, order for rectification of name to such company if it is satisfied in all terms that the said name needs to be rectified.
There are few conditions whereby Central Government may issue suo moto directions to the company for rectification of name of the Company. This order can be issued anytime either-
Please take a note on conditions mentioned below
The name approved is found identical or it nearly resembles
As the Government has authority to suo moto issue an order in case of rectification of Company, likewise a proprietor of registered trade mark can also make a representation to the government on the grounds that the name of another company is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999 as under-
The Central Government on receipt of application from the entrepreneur, if gets satisfied that the documents submitted are as per the requirement under sec 16 of Companies Act, 2013, and agrees that the name of another company is too nearly resembling or identical the it may approve the application and simultaneously order the company to rectify the name of the company but before that the government should give atleast once an opportunity of being heard to the another company.
Similarly if the Central Government does not find grounds of application to be worth and true, then it may directly reject the form after giving an opportunity of being heard.
Once an order is received from the central government then the company should take steps for rectification of name of the company on priority. Following procedure need to be followed by the company-
Step 1: Decide the another name for the company
Step 2: Check on www.mca.gov.in whether the decided name is available or not
Step 3: Conduct a Board Meeting and pass the necessary resolution for change in name of the company
Step 4: Apply online in e-Form RUN for name reservation
Step 5: Name will be approved by the Ministry of Corporate Affairs
Step 6: Issue of name approval letter, valid for 21 days from the date of approval.
Step 7: Hold Extra Ordinary General meeting of the members of the Company for rectification in name of the Company
Step 8: File form MGT-14 after according consent of members
Step 9: Make an application to central government in form RD-1
Step 10: Approval by concerned Regional Director and intimation mail sent to the Company
It is utmost recommendation to all companies to have timely compliance under Companies Act, 2013 to avoid heavy penalties for the same. In case of rectification of name of the company, if there is contravention in compliance of sec 16 of the Companies act, 2013 then the company shall be punished with fine up to Rs 1,000 for each day of default. The officers in default of the company shall be liable for fine of amount being not less than Rupees Five Thousand but which may extent to Rupees One Lakh.