The Ministry of Corporate Affairs has vide the Companies (Incorporation) Third Amendment Rules, 2020 (“Amendment Rules”) dated December 24, 2020 amended the Companies (Incorporation) Rules, 2014 (“Rules”).  

Pursuant to the Amendment Rules, a new provision viz., rule 9A, has been inserted in the Rules, which allows the registrar of companies (“RoC”) to extend the period of a name reserved under rule 9 of the Rules. Prior to the amendment, the Registrar could reserve a name for a period of 20 (twenty) days from the date of approval under rule 9 of the Rules or such other period as prescribed, for a company proposed to be incorporated and for a period of 60 (sixty) days from the date of approval under rule 9 of the Rules, for an existing company.  

The Amendment Rules allow the Registrar to extend the period of reservation of a name upto:

1. 40 (forty) days from the date of approval under rule 9 of the Rules upon payment of fees of Rs. 1,000 (Rupees one thousand) before the expiry of 20 (twenty) days from the approval under Rule 9 of the Rules;
2. 60 (sixty) days from the date of approval under rule 9 of the Rules upon payment of fees of Rs. 2,000 (Rupees two thousand) before the expiry of 40 (forty) days referred in clause (a) above; and
3. 60 (sixty) days from the date of approval under rule 9 of the Rules upon payment of fees of Rs. 3,000 (Rupees three thousand) before the expiry of 20 (twenty) days from the approval under Rule 9 of the Rules; 

However, the RoC will have the power to cancel the reserved name in accordance with Section 4(5) of the Companies Act, 2013.

This update has been contributed by Aastha (Partner) and Kartik Jigyasi (Associate).