Setindiabiz review of the new company name approval process
The government of India, in order to streamline the process of company name approval, has established a Central Registration Centre (CRC) as empowered under sub-section 1 and 2 of Section 396 of Companies Act,2013.Company name approval process is now centralized by Central Government vide a notification dated 22nd of January 2016. This blog intends to provide Setindiabiz review of the new process for name approval.
At present company name approval application can be made either through e- Form INC -1 or INC 29.INC 1 is an application to the Registrar of companies for consideration of names proposed by the applicant for incorporation of a company in India whereas INC 29 is a consolidated form filed for incorporation of a company which includes name approval, an appointment of directors and company incorporation. Once INC 29 is approved a company is formed and the applicant will receive a certificate of Incorporation.
This centralized company name approval process considers name applications form filed through e-Form INC 1 only. Central Registration Centre (CRC) has territorial jurisdiction all over India and will be responsible for processing and disposal of name application filed through e-Form INC 1. But all the processing and approvals under the INC 29 including the approval of the proposed name shall continue to be vested with the Registrar of Companies having jurisdiction over the place at which the company is being incorporated as provided in the Companies Act 2013 and rules made thereunder. Central Registration Centre (CRC) came into force on 26th of January 2016 and is located at Indian Institute of Corporate Affairs (IICA), Plot No. 6,7, 8, Sector 5, IMT Manesar, District Gurgaon, Pin Code-122050. Haryana. CRC is functioning under the control of Registrar of Companies, Delhi (ROC Delhi) until a new & separate Registrar is appointed to Central Registration Centre (CRC).
The Government of India has not only constituted Central Registration Centre (CRC) to rationalized company name approval process but also made amendments in Companies (incorporation) Amendment Rules, 2016 to ease out the name approval process.
The major amendments in Companies (incorporation) Amendment Rules, 2016 with regard to name approval is as under:
- Name application in e-form INC 1 will be processed & disposed of by Central Registration Centre (CRC) to reduce the time taken in the disposal of a name application and further to rationalize the name approval process throughout states.
- Now the government is promoting registration of companies through INC 29 route and has made provision for providing three opportunities to remove the defect or deficiency in the documents and form filed through e-form INC 29, one at the time of filing INC 29 and two opportunities thereafter. Earlier in INC 29 there were only two opportunities to remove the defect if any before rejection of application
- Name of a company need not be indicative of the object but if the proposed name contains a word which relates to the object such word must conform to the activities mentioned into the memorandum of association (MOA) of that company.
- An existing company well known to the public through its abbreviated names may change their name to the abbreviation of existing name by following the rules and regulation of the Companies Act. Further, the existing company may form a new company either a joint venture, associate company or subsidiary company with their abbreviated name but it must carry a word which relates to the proposed business of such new company. Thus, a proposed abbreviated name of an existing company cannot be rejected on the ground of being vague.
- Now there is no need to change the name of a company in case of a change in business activity if a name does not carry word which relates to its previous activity. Where the name of a company contains a word which relates to their business activity the company must file for the change in the active part of name within six months of the change of their business activity.
With the advent of new process, the incorporation process has drastically changed and has become simpler. The introduction of Central Registration Centre (CRC) for incorporation will impact the time taken for company registration to a great extent as the time taken for company registration will reduce drastically. This will aid in materializing the dream of incorporating a company in one day in India.