Fast Company Name Approval
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.
