The Ministry of Corporate Affairs (MCA) wide 2 different notifications dated 22 July, 2021, notifies Companies (Incorporation) Fifth Amendment Rules, 2021 and Commencement of Section 4 of the Companies (Amendment) Act, 2020
So let us discuss these notifications in detail in this article.
Summary/ Gist of Notifications
- Insertion of Rule 33A- Allotment of a new name to the existing company under Section 16(3) of the Companies Act, 2013.
- Commencement of Section 4 of the Companies (Amendment) Act, 2020- Amendment of Section 16 of the Companies Act, 2013
Notification 1- Insertion of Rule 33A- Allotment of a new name to the existing company under Section 16(3) of the Companies Act, 2013
Effective Date
Above notification shall be applicable from 1 September, 2021.
Amendments in-
Companies (Incorporation) Rules, 2014
Inserted Rule
(1) Consequence of not complying with direction issued under Section 16(1)
Under this section, Regional director (RD) will take action on the companies which don’t comply with direction issued under Section 16(1) within 3 months from such an issue of direction.
In above case,
- Letters “Order of Regional Director not complied (Abbreviated as ORDNC)”, Year of passing of the director, the serial number and the Existing Corporate Identity Number (CIN) of the company shall become the new name of the company without any further act or deed by the company.
- Registrar shall enter this new name in the Register of companies.
- It shall issue a fresh Certificate of Incorporation in Form No. INC- 11C.
Proviso
Above provision shall not apply in case-
E-form INC-24 filed by the company and pending for disposal after 3 months expiry, unless the E-form is subsequently rejected.
Note
Section 16(1) of the Companies Act, 2013- Rectification of name by the company
Above section relates with the provisions in which Central Government (CG) issues directions to the company to change its name, in case the name with which it is registered on incorporation or after that, in its opinion is identical or too nearly resembles to-
1. Existing name of the company registered under this act or any previous law within 3 months of such direction after passing an ordinary resolution
2. Registered trademark under the Trade Marks Act, 1999 and an application by the Registered Proprietor is made to the CG within 3 years of the incorporation or registration of a new name. Time limit to change name in this case is within 3 months of such direction after passing an ordinary resolution.
(2) Company required to make compliance under Rule 33A(1)
If RD takes above mentioned action against the company, then Company shall-
- Comply with necessary provisions under Section 12 of the Companies Act, 2013 and
- Mention the statement Order of Regional Director not complied (under Section 16 of the Companies Act, 2013) in brackets below the Company’s name, wherever it is printed, affixed or engraved.
Proviso
Company shall not be required to mention above statement if-
Company subsequently changed its name under Section 13 of the Companies Act, 2013.
(3) Insertion of New form INC-11B in the annexure
A new Form No. INC-11C- Certificate of Incorporation pursuant to change of name due to order of Regional Director not being complied shall be inserted after Form No. INC-11B in the annexure.
Source
Companies (Incorporation) Fifth Amendment Rules, 2021
Notification No. 2- Commencement of Section 4 of the Companies (Amendment) Act, 2020
Effective Date
Above notification shall be applicable from 1 September, 2021.
Section 4 of the Companies (Amendment) Act, 2020– Amendment of Section 16 of the Companies Act, 2013
Section 16 of the Companies Act, 2013 shall be amended as follows-
(i) Under Section 16(1)(b),
“Period of six months” shall be substituted with the words “period of three months”.
(ii)Under Section 16(3), following shall be substituted,
If Company doesn’t complies with Section 16(1), then-
- Central Government (Regional director) shall allot a new name to the company in such manner as may be prescribed
(This manner has been prescribed now under Rule 33A- Allotment of a new name to the existing company under Section 16(3) of the Companies Act, 2013)
- Registrar shall enter the new name in the register of companies in place of the old name
- Registrar shall issue a fresh certificate of incorporation with the new name for further use
Proviso
Above subsection does not prevent a company to subsequently change its name as per Section 13 of the Companies Act, 2013.
Source
MCA notifies Changes in Section 4 | Memorandum | Companies Act, 2013
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