Amendment In Companies Incorporation Rules Extension Of Reservation Of Name

CSPAYAL SOMANI | Last updated: 02 January 2021

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Quick Summary

The Ministry of Corporate Affairs (MCA) has introduced new rules allowing for an extension of company name reservation periods. Previously, a reserved name was valid for only 20 days. Now, through the SPICE+ web service and upon payment of specific fees, companies can extend this reservation period up to 60 days from the date of name approval.

Introduction

MCA has issued Companies (Incorporation) Third Amendment Rules, 2020. MCA issued this notification on 24th December 2020.

MCA has introduced Rule 9A i.e. Extension of Reservation of Name in certain cases.

Applicability

This rule shall come into force from 26th January 2021.

Present Provision

As per the provision of the Companies Act, 2013 the name reserved for the incorporation of the company shall be reserved for a maximum of 20 days. If a company has not been incorporated within 20 days then the name shall expire.

Amended Provision

Upon payment of fees provided below through the web service available at www.mca.gov.in, the registrar shall extend the period of a name reserved under Rule 9 through SPICE+ up to:

Extend Company Name Reservation: New MCA Rules

Sr. No.	Number Of Days	Fees	Condition
1	40 days from the date of Approval Of Name	Rs. 1000	Payment needs to be made before the expiry of 20 days from the date of approval of the name
2	60 days from the date of Approval Of Name	Rs. 2000	Payment needs to be made before the expiry of 40 days from the date of approval of the name
3	60 days from the date of Approval Of Name	Rs. 3000	Payment needs to be made before the expiry of 20 days from the date of approval of the name

Conclusion

Ministry has given this relaxation to use reserved name up to 60 days from the date of approval of name instead of 20 days from the date of approval of name on payment of specific fees.

FAQ :

The amendment introduces Rule 9A, which allows for an extension of the period for which a company name can be reserved.

Previously, a name reserved for company incorporation was valid for a maximum of 20 days.

The reservation period can be extended up to 60 days from the date of name approval.

Fees vary depending on the extension period: Rs. 1000 for 40 days, Rs. 2000 for 60 days (paid within 40 days of approval), and Rs. 3000 for 60 days (paid within 20 days of approval).

These rules came into force on 26th January 2021.

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