ROC says our name is too similar to another company: what to do in three months

The Central Government has directed your company to change its name because it is too close to another company's name, or to someone's registered trade mark. The clock is already running.

This article is for a company that already holds a direction. It explains what you must do, and what happens to your name if the deadline passes.

Where you stand

The power sits in section 16, Companies Act 2013. It applies when a company, "through inadvertence or otherwise", was registered, on first registration or on registration by a new name, with a name that is a problem. There are two routes.

Route one: a similar company name (s.16(1)(a), Companies Act 2013). In the opinion of the Central Government, your name is identical with, or too nearly resembles, the name of a company that was registered earlier. That can be under the 2013 Act or under any earlier company law. The Government may then direct you to change your name.

Route two: a trade mark owner complains (s.16(1)(b), Companies Act 2013). A registered proprietor of a trade mark applies to the Central Government. The application must be made within three years of your incorporation, registration, or change of name. The owner says your name is identical with, or too nearly resembles, a registered trade mark under the Trade Marks Act, 1999. If the Government agrees, it may direct you to change the name.

Both routes give you the same period and the same method. Your direction will say which route you are on.

The base rule is section 4(2), Companies Act 2013: the name in the memorandum shall not be identical with, or resemble too nearly, the name of an existing company. Section 16 is the fix when a name slipped through. Ignoring it has a heavy consequence, set out below.

What you can still do today

You have two real options.

Comply. Pick a new name, pass an ordinary resolution, get the new name approved and file the change within the three months. This is what the section expects.
Get Form INC-24 in early. If your INC-24 is still pending when the three months run out, the automatic new name does not apply, unless the form is later rejected (proviso to rule 33A(1), Companies (Incorporation) Rules, 2014). This is a protection, not a plan.

Doing nothing hands the company a name it did not choose. Read the ORDNC section below.

Section 16 turns on the opinion of the Central Government. If you believe the direction is wrong, speak to a CA or a lawyer about a challenge at once. Do that alongside the compliance steps, not instead of them, because the three months do not pause while you wait.

The deadline clock

Three months from the issue of the direction (s.16(1)(a) and (1)(b), Companies Act 2013). The words are "from the issue of such direction". Count from the date the direction was issued, not from the day your team noticed it. Check the date printed on the order and put the last day in the calendar today.

Two later clocks follow if you comply.

Fifteen days from the date of the change: give notice of the change to the Registrar, along with the order of the Central Government (s.16(2), Companies Act 2013). The Registrar then carries out the necessary changes in the certificate of incorporation and the memorandum.
Two years of showing the old name. A company that has changed its name during the last two years must show the former name or names along with its present name on its name board, letterheads and similar papers (first proviso to s.12(3), Companies Act 2013).

Older commentary may quote a six-month period. The text now reads "period of three months". Do not rely on the old figure.

Step by step

Step 1: Read the direction. Note the date of issue, the route, and the name or trade mark it refers to. Keep a copy for the Registrar (s.16(2), Companies Act 2013).

Step 2: Check you are free to change the name. Rule 29(1), Companies (Incorporation) Rules, 2014, says change of name is not allowed to a company that has defaulted in filing annual returns, financial statements or any document due for filing with the Registrar. It also bars a company that has defaulted in repayment of matured deposits or debentures, or interest on deposits or debentures. If you have pending filings, clear them first. That is the usual reason a name change stalls inside the three months.

Step 3: Choose a new name that passes. The new name must itself meet section 4(2), Companies Act 2013. It must not be identical with or too nearly resemble an existing company's name, and it must not be one whose use would be an offence or is undesirable in the opinion of the Central Government. It must also avoid words that suggest a link with the Central Government, a State Government or a local body, unless previous approval has been obtained (s.4(3), Companies Act 2013). Run a trade mark search too, so you do not meet route two a second time.

Step 4: Board and ordinary resolution. Section 16(1) says the company shall change its name "after adopting an ordinary resolution for the purpose". Notice the difference from a voluntary name change. A voluntary change needs a special resolution (s.13(1), Companies Act 2013). A section 16 change needs an ordinary resolution. Follow your articles for notice, meeting and minutes.

Step 5: File Form INC-24. The form is titled "Application for approval of Central Government for change of name". It cites section 13(2) of the Act and rules 29(2) and 33A of the Incorporation Rules. Rule 29(2) says the application goes in Form INC-24 "along with the fee for change in the name of the company". Check the current fee on the MCA portal before you file. The form asks for:

the company's CIN, name and registered office address;
the SRN (service request number) of the name-reservation request, and the proposed name;
the reason for the change;
details of Form MGT-14 filed with the Registrar of Companies, and the SRN of that form;
the number of members present, voting for, voting against and abstaining, with their shareholdings.

The form's member fields refer to the meeting "where the special resolution was passed for change of name", while section 16(1) requires an ordinary resolution. The form has an optional attachment field. Have your CA confirm how the portal expects a section 16 resolution to be entered.

Step 6: Wait for the certificate. On approval, a new certificate of incorporation in Form INC-25 is issued consequent upon the change of name (rule 29(2), Companies (Incorporation) Rules, 2014). A change of name is "complete and effective only on the issue of such a certificate" (s.13(3), Companies Act 2013). Until you hold it, you have not complied.

Step 7: Notify within fifteen days. Give notice of the change to the Registrar, with the Central Government's order, within fifteen days of the change (s.16(2), Companies Act 2013). Check the current form and fee on the MCA portal.

Step 8: Change everything that carries the name. Section 12(3), Companies Act 2013, requires the name and registered office address on the outside of every place of business, on the seal if any, and on business letters, bill heads, notices and official publications, along with the CIN. For two years show the former name too (first proviso to s.12(3)). Default in section 12 brings a penalty of ₹1,000 for every day, up to ₹1 lakh (s.12(8), Companies Act 2013).

Then update the bank, GST registration, licences, contracts and website. Those run outside the Companies Act and are not covered here.

If the three months pass: the ORDNC name

This is the part that surprises directors.

If the company is in default in complying with the direction, the Central Government "shall allot a new name to the company in such manner as may be prescribed", and the Registrar enters it in the register in place of the old name and issues a fresh certificate (s.16(3), Companies Act 2013). The company "shall use" that name thereafter.

The manner is set out in rule 33A, Companies (Incorporation) Rules, 2014, in force from 1 September 2021. If a company fails to change its name within three months from the date of issue of the direction, the new name is made up of:

the letters "ORDNC", short for "Order of Regional Director Not Complied";
the year of passing of the direction;
a serial number; and
your existing CIN.

This happens "without any further act or deed by the company". The Registrar makes the entry and issues a fresh certificate in Form INC-11C.

The company must then "at once" comply with section 12 for the new name. It must also print the words "Order of Regional Director Not Complied (under section 16 of the Companies Act, 2013)" in brackets below its name, wherever the name is printed, affixed or engraved (rule 33A(2), Companies (Incorporation) Rules, 2014).

A way back exists. Section 16(3) has a proviso: nothing in it stops the company from later changing its name under section 13. The ORDNC statement is not required if the company later changes its name under section 13 (proviso to rule 33A(2)). But that is a full voluntary change. It needs a special resolution, Central Government approval in writing, and a fresh certificate (s.13(1), (2), (3), Companies Act 2013), and rule 29(1) applies again. You will do all the work you could have done in three months, and you will do it while carrying the ORDNC name.

What not to do

Do not sit on the direction. Waiting is how companies end up with an ORDNC name.
Do not propose a name close to the old one. A small tweak invites the same objection under section 4(2).
Do not file INC-24 while filings are overdue. Rule 29(1) bars the change for a company in default. Clear the defaults first.

What to do now

Next step: read the date of issue on the direction. Then clear any overdue filings and pass an ordinary resolution for a new name (s.16(1), Companies Act 2013; rule 29(1), Companies (Incorporation) Rules, 2014).
Deadline: three months from the issue of the direction to change the name. Then fifteen days from the change to notify the Registrar with the order (s.16(1) and s.16(2), Companies Act 2013).
Consequence of missing it: the Central Government allots a new name made of "ORDNC", the year, a serial number and your CIN. The company must carry the words "Order of Regional Director Not Complied" below its name (s.16(3), Companies Act 2013; rule 33A, Companies (Incorporation) Rules, 2014).

Have a CA review your facts before you act or file.

FAQs

Who decides that my name is too similar?
Section 16(1) says "in the opinion of the Central Government". Your direction will name the authority that issued it. Rule 33A calls it the direction of the Regional Director.

Can the other company or trade mark owner force a change at any time?
Route one has no time limit in the section's words. Under route two, the trade mark owner's application must be made within three years of your incorporation, registration, or change of name (s.16(1)(b), Companies Act 2013). A new name therefore needs a fresh trade mark check.

Do I need a special resolution?
No. A section 16 change needs an ordinary resolution (s.16(1), Companies Act 2013). A special resolution is for a voluntary change under section 13(1). The INC-24 member fields speak of a special resolution, so have your CA confirm how the portal expects it to be entered.

I filed INC-24 and it is still pending at the end of three months. Am I safe?
The automatic ORDNC name does not apply while the form is pending, unless it is subsequently rejected (proviso to rule 33A(1), Companies (Incorporation) Rules, 2014). If the form is rejected, you should assume the default consequence is back.

We carry the ORDNC name. Can we undo it?
Yes, by changing the name under section 13 (proviso to s.16(3), Companies Act 2013). That needs a special resolution, written approval of the Central Government and a fresh certificate. The company must be free of the defaults listed in rule 29(1). The ORDNC statement is then no longer required (proviso to rule 33A(2)).

Is there a fine for not complying with the direction?
Section 16(3) provides the allotment of a new name, not a fine (Companies Act 2013).

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