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The Government of India (“GOI”) is committed to improving the process of doing business in India. This initiative of GOI is running under the name of ‘Ease of Doing Business in India (EODB). A business starts with the incorporation of an entity. Ministry of Corporate Affairs (“MCA”) is constantly making endeavors to improve the incorporation process, mainly incorporation of Companies, the most preferred method of setting up the businesses in India.

At the beginning of the year 2020, MCA replaced the old SPICE forms with SPICE+ forms. SPICE+ forms were divided into 2 parts, SPICE+ Part A- which is used for reservation of name for a Company, and SPICE+ Part B which is an integrated form for reservation of name, obtaining DIN, incorporation, and obtaining PAN and TAN for the companies and its directors.

As per the provisions of Section 4 of the Companies Ac, 2013 a reserved name is valid for 20 days in case of new incorporation. Many stakeholders, were facing issues as preparation, signing, and collection of all the incorporation and KYC documents take more time, especially in the case of companies having foreign shareholders/directors. In a few of the instances, the name which was approved earlier was rejected at the time of re-application. Sometimes, the stakeholders have to do the entire exercise of signing, notarization, and consularization of the documents; again.

To address the above issues and to add one more step towards EODB, MCA vide its notification dated December 24, 2020, amended The Companies (Incorporation) Rules, 2014 by inserting a new Rule 9A. These rules are called Companies (Incorporation) Third Amendment Rules, 2020.

The new rule 9A provides an opportunity for an extension of the validity period of a reserved name beyond 20 days, to the stakeholders.

The gist of the said rule is as follows:

Ease of doing business in India: Extension of period of reserved names for Companies


Sr. No.

No. of days for extension

By when the application to be made

Day's calculation

Fees payable


Up to 40 days from the date of approval of name under Rule 9 of The Companies (Incorporation) Rules, 2014

Before the expiry of 20 days (the original period of validity)


Rs. 1000


Up to 60 days from the date of approval of name under Rule 9 of The Companies (Incorporation) Rules, 2014

Before the expiry of 40 days (the original period of 20 days + additional period of 20 days applied in point A above)


Rs. 2,000


Up to 60 days from the date of approval of name under Rule 9 of The Companies (Incorporation) Rules, 2014

Before the expiry of 20 days


Rs. 3,000


2. Maximum permissible period for a reserved name will be for 60 days from the date of first approval given under Rule 9 of The Companies (Incorporation) Rules, 2014.

3. The stakeholders can either apply for an extension of the name directly for 60 days or firstly for an additional period of 20 days and then additional 20 days i.e. either 20+40 days or 20+20+20 days.

4. Each application for extension shall be made before the expiry of the validity period of the name.


5. The Registrar shall still have the power to cancel the reserved name if, after the reservation of name, it is found that name was applied by furnishing wrong or incorrect information. The power is given to the Registrar under Section 4(5) of the Companies Act, 2013.

Disclaimer: This material and the information contained herein is prepared by the author for the purpose of general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). None of the Author or website and the Firm, its associate firms, or its members/employees is, by means of this material, rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. JMJA & Associates LLP or the author shall not be responsible for any loss whatsoever sustained by any person who relies on this material.


Published by

CS Anupriya Saxena
(Partner at JMJA & Associates LLP)
Category Corporate Law   Report

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