Rule: 9A Extension of Reservation of Name in Certain Cases

On December 24, 2020, the Ministry of Corporate Affairs published the Companies (Incorporation) Third Amendment Rules, 2020, which included Rule 9A ‘Extension of Reservation of Name in Certain Cases.’ This Rule extends the deadline for reserving a name affirmed by the Central Registration Centre (CRC).

Rule 9 of Companies (Incorporation) Rules, 2014

An application for name reservation must be made online at “www.mca.gov.in” using the web service SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32) and paying fees of Rs. 1000/-. If the name is sanctioned, it would be readily accessible for 20 days from the date of authorization; if it is refused, the applicant may resend the application without spending a single penny after making the necessary changes recommended by the Central Registration Centre (CRC).

Company Name Reservation Period

The Companies Act of 2013 requires a company to first retain a name for incorporation or name change with the Registrar of Companies (RoC).  Depending upon the facts and documents provided, the Central Registration Centre (CRC) would then withhold the name for a specified period of time-

• Names held for the incorporation of a new company have a 20-day reservation period.
• The reservation period for names reserved for a name change in an existing company is 60 days.
• In the case of Limited Liability Partnerships Company names, the period for both new company registration and name change of an existing company is 90 days.

Mandatory Provisions under Rule 9A of Companies (Incorporation) Rules, 2014

On payment of certain fees via the online portal made available at www.mca.gov.in, the Registrar shall extend the time frame of a name reserved under rule 9 by using web service SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32). Hence, to summarize, the Registrar shall extend the period of 20 days of name reserved, after satisfying predefined following conditions and payment of extra expenses by the applicant:

• on payment of fees of one thousand rupees made before the expiry of twenty days from the date of approval under rule 9; forty days from the date of approval under rule 9;
• sixty days from the date of approval under rule 9 on payment of fees of two thousand rupees made before the expiry of the forty-day period mentioned in clause (a) above;
• sixty days from the date of approval under Rule 9 on payment of fees of Rs. 3000 made before the expiry of the twenty-day period from the date of approval under Rule 9.

Characteristics of Name 

A company’s name should be:

• Distinctive
• Include a noun and an activity word that reflects its goals
• Comply with the Ministry of Corporate Affairs’ Company Name Guidelines

Precautions

The following should not be included in the company name:

• Be the same, similar, identical, or resembling the name of an already registered Company or LLP. Phonetically similar names should be avoided as well.
• Be likely to cause confusion to a registered trademark or a trademark for which an application has already been filed.
• The name chosen must not be illegal under any law and must not be unfavourable in the eyes of the Central Government.
• The company name should not contain any words or expressions that are likely to give the impression that the company is in any way connected to the government, either central or state, or any other local authority when it is not unless approval from the government has been obtained.
• If a company’s name implies financing, leasing, chit-fund, investment, securities, etc., even if the company’s business is unrelated to any of these activities, such names are not permitted.
• Any descriptive name that includes any commonly used words that describe a business activity.

MCA naming guidelines

• It doesn’t matter if a word is in the plural or singular number in one or both names.
• The type and case of letters, letter spacing, punctuation marks, and special characters used in one or both names are ignored.
• The usage of distinct tenses in the names is also prohibited.
• The use of different phonetic spellings of an expression, including the use of misspelt words, shall be disregarded.
• In one or both names, use a host name such as ‘www’ or a domain extension such as ‘net’, ‘org’, ‘dot’, or ‘corn’.
• The order of the words in the names is irrelevant.
• In one or both names, use of the definite or indefinite article.

Final Words

The first and most important step in the process of forming a new company is to choose a name that is distinct and will help the company gain recognition. A distinct company name must be reserved with the Ministry of Corporate Affairs (MCA). Rule 8 of the Companies Incorporation Rules 2014 provides name approval/availability guidelines based on the Companies Act 2013 when naming a company. This article has covered everything there is to know about “MCA naming guidelines.”