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Monday, February 1, 2016

MCA amends the Company Incorporation Rules & establishes CRC on 22.01.2016

The Central Government has established a Central Registration Centre (CRC) having territorial jurisdiction all over India, for discharging or carrying out the function of processing and disposal of applications for reservation of names under the provisions of the said Act.

The CRC shall function under the administrative control of Registrar of Companies, Delhi (ROC Delhi), who shall act as the Registrar of the CRC until a separate Registrar is appointed to the CRC.

The CRC shall process applications for reservation of name i.e., e-Form No. INC-1 filed along with the prescribed fee. The CRC shall function under the administrative control of Registrar of Companies, Delhi (ROC Delhi), who shall act as the Registrar of the CRC until a separate Registrar is appointed to the CRC.  Processing and approval of name or names proposed in e-Form No. INC-29 shall continue to be done by the respective Registrar of Companies having jurisdiction over incorporation of companies under the Companies Act, 2013.

Further, in order to facilitate the incorporation of companies, MCA has amended the Companies (Incorporation) Rules. Both the circular and the amended rules shall be effective from January 26, 2015.
The Companies Incorporation Amendment Rules, 2016 effective from 26.01.2016 provide a lot of incentive to the companies. The major amendmentsare given as under:              
S.N.
As per Old Rules
As per the new Rules
1
The company’s namewas required to be on the same line with the principal objects of the company, if the name was indicative of an object.

The name of the company need not be in the same line with the principal objects of the company even if the name of the company is indicative of an object.
2
Company names that are vague or an abbreviation (in short form)of a name which does not provide any significant meaning were not allowed. For Eg.23K Limited.
Sub-clause(x)ofclause(b)has been omitted and now,company names in abbreviated form or having no meaning or significance will be allowed.

3
Company name that intend or could produce a misleading impression regarding the scope or scale of its activities would not be allowed.
Sub-clause (xvii) of clause (b) has been omitted. Hence, company names that are not in line with its scope or scale of activities would be allowed
4.
 Company wasrequiredto change their name if the company starts the activities which   are not reflected in its names within the period of six months from thechange of activities.
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.
5.
If a key word of the company name contains the name of a person other than the name of the promoters or their close blood relatives, then a NOC was required for such purpose.

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.

6.
Up to two times resubmission was allowed for the correction of any mistake in the incorporation application.

Now, The resubmission will be allowed for three times for the correction of mistake in the incorporation applicationwithin a total period of Thirty days from first submission
7.

An application for the reservation of a name shall be made in Form No. INC.1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014
An application for the reservation of a name shall be made in Form No. INC-I along  with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 which may be approved or rejected, as the case may be, by the Registrar, Central Registration Centre (CRC)  (CRC is separate unit for facilitating incorporation process and for the approval of  incorporation applications. )

Contributed by Roshan Paudel ( CA Finalist )

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