Section 8 company falls under the ambit of the Companies Act, 2013, and the same Act regulates it. It is managed by the MCA, i.e. Ministry of Corporate Affairs, via the office of ROCs (Registrar of Companies) residing in every state. The Company Incorporation rules, the norms, procedures and the process vary based on the company’s type that is to be incorporated. This write-up shall take a brief look into Section 8 Company Name Rules and procedure.
Application for Section 8 Company Name
The application pertaining to the name availability of Section 8 entities must be made in the ‘Reserve Unique Name’ facility. It is worth noting that the words like Private Limited or Limited cannot be a part of the name of Section 8 Company.
The Section 8 company name should end with the standard terms such as a forum, foundation, federation, association, confederation, chambers, electoral trust, council, etc. The RUN service allows the proposal of two names at once and a resubmission.
An Overview on RUN Service
The MCA has eased out the company name approval process by launching a new digital portal called Reserve Unique Name (RUN) on 26th January 2017. It is a user-friendly and intuitive process that aids in name reservation for a new company or name alteration for an existing company.
Where to locate the RUN facility, and who can use it?
Only a registered applicant of the MCA web-based portal can file an application under the RUN service. Once the applicant has logged onto the portal, he must opt for RUN service from the main menu. An individual intending to register a new company or change the name of a prevailing company can use this service for name reservation.
Vital Requirements for Reserving Section 8 Company Name
When a person applies to the portal to reserve the name of a new company or alter the name of an operating company, it has to be ensured that the proposed name(s) are valid and not banned under the Company Name Availability guidelines.
A search related to trademark is also conducted to ensure that such names are in line with the provisions of Section 4(2) of the Companies Act 2013. The desired name shall be rejected if it violates the underlying guidelines.
Validity of a Name Approval
A company whose name has secured approval according to the RUN’s guidelines remains valid for duration of:
- 20 days from the approval date (in case the name reservation is made for a new company)
- 60 days from the approval date (to alter the existing company’s name)
Submission of Objects
The objects of the proposed entity have to be shared along with the relevant submission to bolster the proposed name. As of now, applicants are allowed to submit only one name in the RUN form. There is no arrangement of adding multiple names in the application in the preference order.
NOC submission for Reserving Section 8 Company Name
There is no requirement to attach any documentation while furnishing a RUN application. However, it is recommended to furnish NOC from the prevailing entity or consent from relevant agencies and other submissions to support the name application. All submissions must be filed as a sole document; the file size should not surpass 6 MB.
Application Fee and Receipt Generation
All applications shall go along with an application fee amounting to Rs 1000. Upon application and fee submission, the portal shall generate a receipt enclosing the SRN or Service Request Number. The SRN encloses the fees details paid by the applicant. There is no refund relating to a fee in case the application is rejected for any reason.
Is there has any criteria of Resubmission under RUN services?
The name applied might attract either approval or rejection of authority, with nil possibility of resubmissions. A fresh payment worth Rs 1000 must be remitted for application furnished via the RUN facility.
Application Scrutiny by the Central Registration Centre
All name applications shall undergo processing conducted by Central Registration Centre. The name applied shall be thoroughly scrutinized by the CRC. Upon completing this, the authority decides whether to accept or reject the application. The information regarding this shall be duly shared with the applicant via e-mail.
Precautions to be taken to avert the likelihood of application rejection
To avert the possibility of the application rejection, the applicant must get accustomed to the Companies (Incorporation) Rules 2014 and should perform a trademark search.
The Central Registration Centre performs a name check by taking phonetic similarities and similar meanings into account.
Conclusion
Section 8 company name rule is not as complicated as it seems on the surface. However, one must keep the tap on the underlying compliances cited under Companies (Incorporation) Rules 2014 to avert any chances of application rejection.
Read our Article:Annual Compliance for Section 8 Company: A Complete Checklist
