MKB & Associates

Company Secretaries
(Private & Confidential)
(for our retainee clients only)
Corporate Update Bulletin: 14
Dated: 18-02-2011
New Rules for Name availability by MCA- Trust reposed on
professionals

Companies (Name Availability) Rules, 2011

The Central Government has come up with Companies (Name Availability) Rules, 2011 on
15th March 2011 which is yet to come into effect. By these Rules, the CG has, for the first
time, provided an option to the users either to get their application processed online or opt
for backend processing.

New features of the Rules as different and novel from what has been notified earlier:

Declaration from Applicant

• Declaration required to be enclosed by the Applicant to the effect that:

o He has used the MCA search facilities for checking the resemblance of the proposed
name with the existing ones.
o The proposed name is not infringing any registered trademarks/application for
registration of trademark
o The proposed name not in violation of Emblems and Names (Prevention of Improper
Use) Act, 1950;
o The proposed name is not offensive to any section of people in any manner
o He undertakes to be fully responsible for the consequences, in case the name is
subsequently found to be in contravention of the prescribed guidelines.

Certification from practicing professional

• It shall be optional in the e-form 1A for certification by the practicing Chartered Accountants,
Company Secretaries and Cost Accountants, who will certify that he has used the search
facilities available on MCA portal for checking the resemblance of the proposed name(s) with
the existing ones and the search report is attached with the application form.
• Also certify that the proposed name is not an undesirable name under section 20 of the
Companies Act, 1956 and also is in conformity with Companies (Name Availability) Rules, 2011
and Guidelines made therein.
Procedure to be followed by ROC where Form 1A has been certified by the
professional

• The name will be made available by the system online to the applicant without backend
processing by the ROC. This facility has only been made available for applications for
incorporation.
• Liability of practicing professional: If it is found later on that the name ought not to have
been allowed under provisions of section 20 of the Companies Act read with these Rules, the
professional shall also be liable for penal action under provisions of the Companies Act, 1956 in
addition to the penal action under Regulations of respective professional Institutes.

In case the above option is not availed by the Applicant, the form shall be processed at back end and
result to be communicated to the Applicant by an Order.

The CG has also expressly mentioned guidelines for selecting name of a proposed company and laid
down criteria as to what would amount to resemblance with existing names.

Proposed name need not be indicative of object

Another remarkable move in the Rules is that it has been decided that the proposed name need not be
indicative of the object proposed to be undertaken. However, where such an indication is apparent,
the object must contain that indicated activity.