Fast Company Name Approval

On the heels of the Startup India Action Plan 2016, the Government unveiled the Companies Incorporation Amendment Rules 2016 to fast track the name approval process and simplify company registration. In this article, we look at the recent developments in the Company Name Approval process and its implications for startups.

Old Process

Prior to the introduction of the new centralised name approval process, all name applications had to be submitted to the respective ROC jurisdiction based on the registered office address of the Company. ROC Officer at the State level ROC offices processed the name approval applications and accorded approval. Hence, there were variations in the name approval application processing time between various ROC.

New Process

Under the new process for name approval, all name approval applications are forwarded to a centralized processing centre for name approval. The central processing centre then provides name approval based on the name availability. The new process has resulted in faster company name approvals in the range of 1 - 2 business days, making the name approval process simple and easy.

Relaxation of Naming Guidelines

Prior to the introduction of the Companies Incorporation Amendment Rules 2016, the name approval process was more stringent owing to the more stringent Company Naming Guidelines. The new rules have relaxed major restrictions in the company naming guidelines, making more company names available. Some of the major changes include:

Company name need not be in consonance with the objects

The name of a company need not be in consonance with the principal object of the company, even if the name of the company is indicative of an object.

Company name can be vague or abbreviated

Company names can be vague or abbreviated.

Company name can mislead its activities

Company names that are not in line with its scope or scale of activities would be allowed.

A company can change activities without the name change

A company can change its activity and continue to operate with the old name, even if the activities of the company are not in line with the name of the company.

NOC not required for using names of persons

NOC is not required from any person for using the name of a person in a company name, even if that person is not a promoter or close blood relative.

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Frequently Asked Questions

Common questions about Company Name Approval Process for Startups in India.

The new process for company name approval involves submitting all name applications to a centralized processing center, which provides name approval based on availability. This new process has resulted in faster company name approvals within 1-2 business days, making the process simpler and easier.

The Companies Incorporation Amendment Rules 2016 have relaxed major restrictions in the company naming guidelines, making more company names available. Some of the key changes include: the company name need not be in consonance with its objects, names can be vague or abbreviated, names can be misleading about the company's activities, and companies can change activities without changing their name.

No, an NOC is not required from any person for using their name in a company name, even if that person is not a promoter or close blood relative.

The new centralized process has resulted in faster company name approvals, typically within 1-2 business days, as opposed to the earlier process where approval times varied across different Registrar of Companies (ROC) offices.

Yes, under the new rules, a company can change its activities and continue to operate with its old name, even if the activities of the company are not in line with the name.

Before the new rules, the name approval process was more stringent due to the more rigid company naming guidelines. Name applications had to be submitted to the respective ROC jurisdiction based on the registered office address, leading to variations in processing times across different ROC offices.

The new centralized and faster company name approval process, along with the relaxed naming guidelines, aligns with the Startup India Action Plan 2016, which aims to simplify and fast-track the company registration process for startups.

Yes, under the new rules, a company's name need not be in consonance with its principal objects, even if the name of the company is indicative of an object.

The relaxed naming guidelines have made more company names available for registration, as restrictions such as the name needing to align with the company's objects, not being vague or abbreviated, and not being misleading about the company's activities have been removed.

No, there is no restriction on using words like 'vague' or 'abbreviated' in company names under the new rules. Company names can now be vague or abbreviated.