Analysis: Companies (Incorporation) Fifth Amendment Rules, 2021

*MCA Notification No. G.S.R. 503(E). & S.O. 2904(E). Dtd. 22nd July, 2021

I. Companies (Incorporation) Fifth Amendment Rules, 2021:

The MCA has notified a new set of rules to amend the existing Companies (Incorporation) Rules, 2014 which shall come into force w.e.f. 1^st September, 2021.

The Ministry has inserted:

• new rule i.e., Rule 33A Allotment of a new name to the existing company under section 16(3) of the Act
• new form i.e., form no. INC-11C

Rule 33A: In case a Company fails to change its name or new name, in accordance with the direction issued under Section 16(1) of the Act within a period of 3 months from the date of issue of such direction, the letters

• “ORDNC”(Order of Regional Director Not Complied),
• the year of passing of the direction,
• the serial number and
• the CIN

shall become the new name of the company and the Registrar shall accordingly make entry of the new name in the register of Companies and issue a fresh certificate of incorporation in form no. INC-11C.

• This shall not apply in case form INC-24 filed by the Company is pending for disposal at the expiry of 3 months from the date of issue of direction by RD, unless the said form is subsequently rejected.
• A company whose name has been changed, shall at once make necessary compliance with the provisions of Section 12 of the Act and the statement, “Order of Regional Director Not Complied (under section 16 of the Companies Act, 2013)” shall be mentioned in brackets below the name of Company, wherever its name is printed, affixed or engraved. Further, no such statement shall be required to be mentioned in case the Company subsequently changes its name in accordance with the provisions of Section 13 of the Act.

II. Commencement of Section 4 of the Companies (Amendment) Act, 2020:

The MCA has appointed 1^st September, 2021 as the date on which the provisions of Section 4 of the said Act shall come into force.

Section 4 of Amendment Act:

In section 16 of the principal Act

• in sub-section (1)(b), for the words “period of six months”, the words “period of three months” shall be substituted;
• for sub-section (3), the following sub-section shall be substituted, “(3) If a company is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the company in such manner as may be prescribed and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter:

Provided that nothing in this sub-section shall prevent a company from subsequently changing its name in accordance with the provisions of section 13.” (as provided in Rule 33A above)

Section 16 of the Act for reference:

(1) If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which, —

(a) in the opinion of the Central Government, is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose;

(b) on an application by a registered proprietor of a trade mark that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999, made to the Central Government within three years of incorporation or registration or change of name of the company, whether under this Act or any previous company law, in the opinion of the Central Government, is identical with or too nearly resembles to an existing trade mark, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose.

(2) Where a company changes its name or obtains a new name under sub-section (1), it shall within a period of fifteen days from the date of such change, give notice of the change to the Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation and the memorandum.

(3) If a company is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the company in such manner as may be prescribed and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter:

Provided that nothing in this sub-section shall prevent a company from subsequently changing its name in accordance with the provisions of section 13.

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Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.

The author can also be reached at cstanveersaluja@gmail.com