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MCA introduces Companies (Incorporation) Fifth Amendment Rules 2019 on May 10

Recently, MCA (Ministry of Corporate Affairs) released a notification stating various rules and amending Companies (Incorporation) Rules, 2014. The rules will be called Companies (Incorporation) Fifth Amendment Rules 2019 which came into effect from the date of the publication of these rules, i.e. 10^th May, 2019.

The Companies Act, 2013 defines the naming guidelines for the following companies:

• Private Limited Company
• One Person Company and
• Limited Company

In the process of Incorporation of a new company, a unique name of the company must be reserved with the Ministry of Corporate Affairs (MCA). Rule 8 of Companies Incorporation Rules 2014 provides name approval/availability guidelines as per Companies Act 2013 while selecting the names for a company

Summary of Companies (Incorporation) Fifth Amendment Rules 2019

The Ministry has elaborated a variety of illustrations under this rule while determining the name of the company and Companies (Incorporation) Fifth Amendment Rules 2019 has divided the rule into two parts

• Rule 8A
• Rule 8B.

What is Rule 8A?

These rules specify the list of undesirable names, and

What is Rule 8B?

These rules are for the word or expression which can be used only after obtaining a previous approval of Central Government.

Purpose of introducing Companies Incorporation Fifth Amendment Rules 2019

The Companies (Incorporation) Fifth Amendment Rules 2019 aims at better transparency while determining the name of the company under the Companies Act, 2013. Under the illustrations, stress has also been given on the plural or singular form of words in one or both names or type and case of letters, the spacing between letters, punctuation marks and special characters used in one or both names etc.

Key Highlights of Companies Incorporation Fifth Amendment Rules 2019

Sub-rule 1: A name applied for shall be deemed to resemble too nearly with the name of an existing company, if, and only if, after comparing the name applied for with the name of a current company by disregarding the matters set out in sub-rule (2), the names are same.

Sub-rule 2: The following matters are to be disregarded while comparing the names under sub-rule (1):

• The words like Private, Pvt, Pvt., (P), OPC Pvt. Ltd. IFSC Limited, IFSC Pvt. Limited, Producer Limited, Unlimited, Ltd, Ltd., LLP, Limited Liability Partnership, company, and company, & co, & co., co., co, corporation, corp, corpn, corp or group;
• the plural or singular form of words in one or both names;
• type and case of letters, the spacing between letters, punctuation marks and special characters used in one or both names;
• use of different tenses in one or both names ;
• use of different phonetic spellings including use of misspelt words of an expression;
• the use of host name such as `www’ or a domain extension such as ‘net’, ‘org’ ‘dot’ or ‘com’ in one or both names;
• the order of words in the names;
• use of the definite or indefinite article in one or both names;
• a slight variation in the spelling of the two names including a grammatical variety thereof;
• complete translation or transliteration, and not part thereof, of an existing name, in Hindi or in English;
• addition of the name of a place to a current name, which does not contain the name of any place;
• addition, deletion, or modification of numerals or expressions denoting numerals in an existing name, unless the numeral represents any brand;

Proviso

Provided that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names if an existing company has provided a no objection by way of a Board resolution.

Further, you can read full notification related to Companies (Incorporation) Fifth Amendment Rules 2019 here.