Companies with resembling or identical names to be automatic allotted a new name

Companies with resembling or identical names to be automatic allotted a new name u/s 16(3) of the Companies Act

Ministry of Corporate Affairs (MCA) has notified the Companies (Incorporation) Fifth Amendment Rules 2021 with effect from 1st September, 2021.

As per section 16 of the Companies Act 2013, 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, 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, then it may direct the company to change its name and the company shall change its name within a period of three months. 

Existing companies with resembling or identical names to be automatic allotted a new name 

The amendment prescribes for automatic change of name of a company for failure to comply with the direction u/s 16 as above.

The notification issued As per this notification issued, after rule 33, the following new rule 33A has been inserted In the Companies (Incorporation) Rules, 2014, namely:-

Rule 33A : Allotment of a new name to the existing company under section 16(3) of the Act.

As per the Rule 33A, in case a company fails to change its name in accordance with the direction issued under sub-section (1) of section 16, then it new name shall become the as under:

the letters “ORDNC” (being abbreviation of the words “Order of Regional Director Not Complied”), the year of passing of the direction, the serial number and the existing Corporate Identity Number (CIN) of the company.

No further act or deed by the company shall be required for change of the name as above, and the Registrar shall make entry of the new name in the register of companies and issue a fresh certificate of incorporation in Form No.INC-11C.

However, the above provisions shall not apply where e-form INC-24 filed by the company is pending for disposal.

Further, the company whose name is changed as above shall at once make necessary compliance with the provisions of section 12 related to Registered Office 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. However, 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 by alteration of the Memorandum.

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