Disaster management expenditure can now be claimed as CSR Expenditure

The Ministry of Corporate Affairs (MCA) has amended the Schedule VII of the Companies Act, 2013 (the Act). The Schedule VII of the Act speaks about the Activities which may be included by companies in their Corporate Social Responsibility (CSR) Policies. The schedule is amended by adding point (xii) viz.,

“(xii) disaster management, including relief, rehabilitation and reconstruction activities.”

It means, if the company has spent on recovery relief and management of issues caused by any natural disaster the said expenditure can be claimed as CSR The amendment is effective from the date of its publication in the Official Gazette which is 30 May, 2019.

Though, prior to this amendment, the Companies were also eligible to claim the Disaster relief fund as CSR expenditure under various heads

For example,

1. Medical aid under ‘promoting health care including preventive health care.’
2. Food supply under ‘eradicating hunger, poverty and malnutrition’.
3. Supply of clean water under ‘sanitation and making available safe drinking water’.  

(Source: Point 7 of Annexure to General Circular dated 18.06.2014) 

Source: http://egazette.nic.in/WriteReadData/2019/204898.pdf

SEBI not entitled to recover penalty from Corporate Debtor During Moratorium

Anju Agarwal (RP for Shree Bhawani Paper Mills Ltd.) vs. Bombay Stock Exchange & Ors

• The Resolution Professional (‘Appellant’) of Shree Bhawani Paper Mills Ltd. (‘Corporate Debtor’) challenged NCLT Allahabad order whereby it was held that Regulatory Authorities are not covered under moratorium as provided u/s 14 of the IBC. NCLT had held that BSE is not barred from compelling Corporate Debtor to comply with SEBI’s LODR Regulations.
• Rejecting BSE’s contention, NCLAT elucidated that as per Sec. 14 (1) (a) of IBC, the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority is prohibited. Hence, NCLAT stated that Sec. 28A of the SEBI Act contravened Sec. 14 of IBC.
• Further, on perusing Sec. 238 of IBC which is an overriding provision, NCLAT held that Sec. 28A of SEBI Act is inconsistent with Section 14 of the Code, and Sec. 14 will prevail. NCLAT thus held that SEBI couldn’t recover any amount including penalty from Corporate Debtor, and for the same reason, BSE could not take any coercive steps against Corporate Debtor nor can threaten suspension of trading of shares.
• References given -Maharashtra Seamless Ltd. vs. Shri Padmanabhan Venkatesh & Ors.─Company Appeal (AT) (Insolvency) No. 220 of 2019 .Innoventive Industries Limited vs. ICICI Bank and Another

https://ibbi.gov.in//webadmin/pdf/order/2019/Apr/23rdApril%202019%20In%20the%20matter%20of%20Anju%20Agarwal.%20R.P.%20for%20Shree%20Bhawani%20Paper%20Mills%20Ltd.%20VS%20Bombay%20Stock%20Exchange%20&%20Ors.%20[CA(AT)(Insolvency)%20734-2018]_2019-04-26%2015:08:12.pdf

Introduction of Form for Reconciliation of Share Capital Audit report

Ministry of Corporate Affairs (MCA) vide notification dated 22 May 2019 has amended the Companies (Prospectus and Allotment of Securities) Rules 2014. Pursuant to the amendment, Sub-rule 8 of Rule 9A is amended whereby every unlisted public company to submit the Reconciliation of Share Capital Audit report with the registrar (ROC) in form PAS-6 within sixty (60) days from the conclusion of each half year.

The form is required to be digitally signed by any one of the Directors of the Company and to be certified by a Company Secretary in practice or by Chartered Accountant in practice duly engaged for the purpose of certification of this form. The filing fees of this Form shall be as provided in the Companies (Registration Offices and Fees) Rules, 2014, i.e., as per the Authorized capital slabs of the Company.

Before this amendment, sub-rule 8 of Rule 9A provided that “The audit report provided under regulation 55A of the SEBI (Depositories and participants) Regulations, 1996 shall be submitted by the unlisted public company on the half-yearly basis to the Registrar under whose jurisdiction the registered office of the company is situated.” Since the manner of submission was not clearly given in the Rule, there was lot of confusion among corporates with regard to the format of audit report, a timeline of submission and the e-form in which this report was to be submitted to ROC.

However, as mentioned in the Amendment Notification, this amendment is effective from 30 September 2019.

Probably the intention of this Amendment appears to enforce the requirement of filing this Audit Report with effect from the half-year ending on 30 September 2019. However, by the way, this Amendment Notification is drafted, the amendment will not be effective till 30 September 2019, and hence the current Rule 9A(8) as mentioned above will continue to be in force till then.

Hence, even after this Amendment, whether to submit this audit report for the half year ending 31 March 2019 and manner of submission, if required, is still unclear….

x

Informal Guidance issued in case of ONGC Videsh Ltd

SEBI has given informal guidance by way of an interpretative letter to ONGC Videsh Ltd under the SEBI (Informal Guidance) Scheme 2003 in connection to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Facts of the query

1)      ONGC Videsh Ltd is a wholly owned subsidiary of Oil and Natural Gas Corporation Ltd (“ONGC”). ONGC Videsh Ltd (“Company”) is in the business of exploration and production of oil and gas and other hydrocarbon related activities outside India.

2)      Company has issued NCD’s which are listed on NSE and the equity shares of the company are presently not listed on any stock exchanges in India.

3)      Prior to implementation of IndAS, Company was submitting half-yearly financial results to NSE on both standalone and consolidated basis. Thereafter now Company is submitting only standalone financial results.

Regulatory framework

      1) Regulation 52(1) states as follow, “The listed entity shall prepare and submit un-audited or audited financial results on a half yearly basis in the format as specified by Board within forty five days from the end of the half year to the recognized stock exchange(s)”

                                         

2      2) As per 1^st proviso to Regulation 52(1)(a) of SEBI(LODR) Regulations, “Provided that if the listed entity intimates in advance to the stock exchange(s) that it shall submit to the stock exchange(s) its annual audited results within sixty days from the end of financial year, un-audited financial results for the last half year accompanied by limited review report by the auditors need not be submitted to stock exchange(s)”

        3)   Reg 52 of SEBI (LODR) Regulations requires an entity whose NCD’s and/or NCRPS are listed to submit the half-yearly unaudited financial results within 45 days from the end of half year, or annual audited financial results within 60 days from end of financial year but it does not specify whether the results should be on standalone basis or consolidated basis or both. As against this Regulation 33 of SEBI (LODR) Regulations clearly states that an entity whose equity shares or any convertible securities are listed shall submit quarterly, half-yearly and annual financial results on standalone basis and in the event of any subsidiaries, also on consolidated basis. 

       4) Regulation 4 of SEBI (LODR) Regulations which is applicable to all listed entities provides that a listed entity shall ensure timely and accurate disclosure of all material matters including financial situation in the prescribed standards of disclosure. In this relation, the circumstances in which consolidated financial results may or may not be considered material is not specified where standalone financial results are already published.

Query:

Q1) Whether Company can submit its consolidated financial results over and above standalone financial results to the stock exchange in terms of Regulation 52 of SEBI (LODR) Regulations 2015?  

Ans: Regulations 52(1) of SEBI (LODR) Regulation warrants submission of only standalone financial results.

Copy of the Informal guidance can be viewed by below mentioned link:

https://www.sebi.gov.in/sebi_data/commondocs/may-2019/Informal%20Guidance%20to%20ONGC%20Videsh%20Limited%20SEBI%20letter_p.pdf

Director’s DIN to be marked as ‘Director of ACTIVE non-compliant company – Non-filing of e-form ACTIVE

Ministry of Corporate Affairs (MCA) vide notification dated 16 May, 2019 has amended the Companies (Appointment and Qualification of Directors) Amendment Rules.

Pursuant to this amendment, directors are required to take all necessary steps to ensure that the form e-form ACTIVE is filed within the specified time period. The amendment in rule is as follows:

1. DIN of all the directors associated with Companies which are required to file e-form ACTIVE, shall be marked as “Director of ACTIVE non-compliant company” if the e-form ACTIVE is not filed by due date which is 15 June, 2019 
2. All the above mentioned directors are required to take necessary steps to comply with the filing of e-form ACTIVE in all the companies.
3. The DIN of such director shall be marked as “Director of ACTIVE compliant company” once the e-form is filed by all the Companies in which such director is director.

Lender to Home Buyer cannot claim as Financial Creditor against Developer

Indiabulls Housing Finance Ltd (Appellant/ Financial Creditor /IHFL)Versus Rudra Buildwell Projects Private Ltd ( Respondent/ Corporate Debtor )

The case of the appellant is that as per request of the borrower, Sh Devender Singh and Ms Sushma Rajput, the appellant sanctioned loan of Rs.74,20,160/- on 6thApril, 2015.

The loan agreement was executed between appellant and the borrower on 6th April, 2015 and the aggregate loan amount sanctioned vide said loan agreement dated  6th April, 2015 was for Rs.73, 23,391.

In addition a tripartite agreement was also executed between the appellant, Corporate Debtor and the Borrower.

According to appellant in terms of the tripartite agreement dated 6.4.2015 the borrower and the Corporate Debtor are jointly and severally liable for payment of the Pre-Equated Monthly Instalment interest till commencement of the Equated Monthly Instalment.

It was alleged that the borrowers and the corporate debtor failed to maintain the financial discipline and defaulted in the payment of the Pre-Equated Monthly Installment Interest.


The Adjudicating Authority taking into consideration the aforesaid fact held that the application filed under Section 7 of I&B Code is not maintainable against M/s Rudra Buildwell Projects Private Ltd, the said respondent having not taken loan from the appellant.

Section 5(7) of Insolvency & Bankruptcy Code, 2016 defines “financial creditor” whereas Section 5(8) of Insolvency and Bankruptcy Code, 2016 defines “financial debt”.

In terms of Clause 5(8) of I&B Code, if disbursement is made for consideration of time value of money, a person can claim to be a financial creditor with regard to amount paid.

The appellant, IHFL, has disbursed the amount for consideration of time value of money in favour of borrower, Mr. Davender Singh and not to the builder. Therefore, the Adjudicating Authority has rightly held that Rudra Buildwell Projects Pvt Ltd is not the corporate debtor of the appellant and the application under Section 7 of I&B Code is not maintainable.

Amendment in timeline for filing Debenture Trustee’s Certificate in case of certain companies

The Securities and Exchange Board of India (SEBI) has vide notification dated 7^th May 2019, amended certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”). This amendment was approved by SEBI at its Board meeting held on 1^st March 2019.

The background and implications of this amendment are explained as follows:-

Background –

Under Regulation 33 of SEBI (LODR) Regulations, equity listed entities are required to submit quarterly financial results within 45 days from the end of every quarter (mandatorily within 60 days from end of last quarter/ financial year)

Similarly, under Regulation 52 of SEBI (LODR) Regulations, debt listed entities are required to submit half-yearly and annual financial results within 45 days from the end of half-year (optional within 60 days from end of last half year / financial year)

Under Regulation 52(4) of SEBI (LODR) Regulations, while submitting half yearly / annual financial results, the debt listed entity needs to disclose the following items along with the financial results:

(a) credit rating and change in credit rating (if any);

(b) asset cover available, in case of non-convertible debt securities;

(c) debt-equity ratio;

(d) previous due date for the payment of interest/ dividend for non-convertible redeemable preference shares/ repayment of principal of non-convertible preference shares /non-convertible debt securities and whether the same has been paid or not; and,

(e) next due date for the payment of interest/ dividend of non-convertible preference shares /principal along with the amount of interest/ dividend of non-convertible preference shares payable and the redemption amount;

(f) debt service coverage ratio;

(g) interest service coverage ratio;

(h) outstanding redeemable preference shares (quantity and value);

(i) capital redemption reserve/debenture redemption reserve;

(j) net worth;

(k) net profit after tax;

(l) earnings per share:

Under Regulation 52(5) of SEBI (LODR) Regulations, while submitting the above mentioned information under Reg 52(4), the debt listed entity also needs to submit to stock exchange(s), a certificate signed by debenture trustee that it has taken note of the contents.

Practical Difficulty faced by Companies having listed equity shares on Main Board of stock exchanges as well as listed Debt Securities -

Now, equity listed entities are also governed by Reg 30 of SEBI (LODR) Regulations. Under Regulation 30(6) read with Para A of Part A of Schedule III of the said Regulations, financial results are to be submitted within thirty minutes of the conclusion of the board meeting.

In case of entities having only listed debt securities, the timeline prescribed for submission of financial statements is 45 days from the end of half year / optionally 60 days from end of financial year under Reg 52(1), and there is no specific timeline prescribed after conclusion of board meeting, for submission of financial results to stock exchange.

Hence practically speaking, in case of issuers having both listed equity and debt securities, they had a very short time frame after adoption of financial results by the Board of Directors, for seeking the above mentioned certificate from Debenture Trustees as required under Regulation 52(5).

Amendment in this regard –

Hence, now SEBI has modified Regulation 52 of SEBI (LODR) Regulations as follows:-

1.       A proviso has been inserted in Regulation 52(1) which says that “in case of entities which have listed their equity shares and debt securities, a copy of the financial results submitted to stock exchanges shall be provided to Debenture Trustees on the same day the information is submitted to stock exchanges.”

2.       Regulation 52(5) which prescribed that, the listed entity shall, while submitting the financial results and the above mentioned information about debt securities to stock exchange(s), shall also submit a certificate signed by debenture trustee that it has taken note of the contents, has been amended with respect to the timeline of submission of this certificate.

As per Amended Regulation 52(5), within seven working days from the date of submission of financial results and the above mentioned information about debt securities to stock exchange, the listed entity shall, submit to stock exchange(s), a certificate signed by debenture trustee that it has taken note of the contents.

Accordingly, as per this Amendment,

(a)    the Companies having listed equity shares and listed debt securities are under a compulsion to submit a copy of financial results to the Debenture Trustees on the same day when it is submitted to stock exchange.

(b)   All debt listed companies have now got a period of 7 working days for submission of certificate from Debenture Trustee to stock exchanges, after submission of financial results and other debt securities related information to the stock exchanges.

The copy of the SEBI Notification dated 7th May 2019 for amendment to SEBI (LODR) Regulations, 2015 in this regard is available on following link:

https://www.sebi.gov.in/legal/regulations/may-2019/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-second-amendment-regulations-2019_42977.html

Revised Name Guidelines – Companies Act, 2013

Ministry of Corporate Affairs (MCA) vide notification dated 10 May, 2019 has amended the Companies (Incorporation) Rules, 2014. Pursuant to amendment, additional restrictions and   illustrations has been introduced which are to be considered while making the name application for registration or change of name for the Companies.

New clauses introduced:

• A name applied for shall be considered as resembling too nearly with the name of an existing company on the additional grounds viz., 

1. use of the definite or indefinite article in one or both names; e.g. Congenial Tours Ltd. is same as A Congenial Tours Ltd. and The Congenial Tours Ltd.
2. a slight variation in the spelling of the two names including a grammatical variation thereof; e.g. Color Technologies Ltd. is same as Colour Technologies Ltd.
3. addition of the name of a place to an existing name, which does not contain the name of any place; e.g. If Salvage Technologies Ltd. is an existing name, it is same as Salvage Technologies Delhi Ltd and Salvage Delhi Technologies Ltd. 
4. addition, deletion, or modification of numerals or expressions denoting numerals in an existing name, unless the numeral represents any brand; e.g. Thunder Services Ltd is same as Thunder l l Services Ltd and One Thunder Services 

and accordingly the name applied shall be disregarded.

• If the Company’s main business is not related to activities such as financing, leasing, chit fund, investments, securities or combination thereof, the name indicative of such activity shall be considered as undesirable 

• If the proposed name applied is identical with or too nearly resembles the name of a company or limited liability partnership incorporated outside India and reserved by such company or Limited liability partnership with the Registrar: 

Provided further that provisions of rule 8 ie., Names which resembles too nearly with name of existing company shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a company or limited liability partnership incorporated outside India. (Probably with this, MCA intends to restricts the name which is too nearly resembling with the name of the company or limited liability partnership incorporated outside India which are reserved with ROC)


For further details, please refer the table of erstwhile and amended rule  

Old – Rule 8 of Incorporation Rules	New - Rule 8, 8A, 8B of Incorporation Rules
(1) In determining whether a proposed name is identical with another, the differences on account of the following shall be disregarded-	Rule 8 (l) A name applied for shall be deemed to resemble too nearly with the name of an existing company, if, and only if, after comparing the name applied for with the name of an existing company by disregarding the matters set out in sub-rule (2), the names are same
(a) the words like Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership; (b) words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.;	Rule 8 (2)The following matters are to be disregarded while comparing the names under sub-rule (1):- (a) the words like Private, Pvt, Pvt,, (P), OPC Ltd.. IFSC Limited, IFSC Pvt. Limited, Producer Limited, Limited, Unlimited, Ltd, Ltd., LLP, Limited Liability Partnership, company, and company, & co, & co., co., co, corporation, corp, corpn, corp or group;
(c) plural version of any of the words appearing in the name;	(b) the plural or singular form of words in one or both names; A. Illustrations (i) Green Technology Ltd. is same as Greens Technology Ltd. And Greens Technologies Ltd. (ii) Pratap Technology Ltd. is same as Prataps Technology Ltd. and Prataps Technologies Ltd. (iii)SM Computers Ltd. is not same as SMS Computers Ltd.
(d) type and case of letters, spacing between letters and punctuation marks;	(c) type and case of letters, spacing between letters and punctuation marks and special characters used in one or both names: B. Illustrations (i) ABC Ltd. is same as A.B.C. Ltd. and A B C Ltd. (ii) TeamWork Ltd. is same as Team@Work L,td. and Team-work Ltd.
(e) joining words together or separating the words does not make a name distinguishable from a name that uses the similar, separated or joined words;	NA
(f) use of a different tense or number of the same word does not distinguish one name from another;	(d) use of different tenses in one or both names: C. Illustrations (i)Ascend Solutions Ltd. is same as Ascended Solutions Ltd. And Ascending Solutions Ltd. (ii)Speak English Solutions Limited is same as Spoken English Solutions Limited.
(g) using different phonetic spellings or spelling variations shall not be considered as distinguishing one name from another. Illustration (For example, P.Q. Industries limited is existing then P and Q Industries or Pee Que Industries or P n Q Industries or P & Q Industries shall not be allowed and similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also;) (h) misspelled words, whether intentionally misspelled or not, do not conflict with the similar, properly spelled words;	(e) use of different phonetic spellings including use of misspelled words of an expression; D. Illustrations (i) Chemtech Ltd. is same as Chemtec Ltd., Chemtek Ltd., Cemtech Ltd., Kemtech Ltd., and Kemtek Ltd. (ii) Bee Kay Ltd is same as BK Ltd, Be Kay Ltd., B Kay Ltd., Bee K Ltd., B.K. Ltd. and Beee Kay Ltd.
(i) the addition of an internet related designation, such as .com, .net, .edu, .gov, .org, .in does not make a name distinguishable from another, even where (.) is written as ‘dot’;	(f) use of host name such as www' or a domain extension such as ‘net', ‘org', 'dot' or 'com' in one or both names; E. Illustrations (i) Ultra Solutions Ltd. is same as Ultrasolutions.com Ltd. (ii) Supreme Ultra Solutions Ltd. is not the same as Ultrasolutions.com Ltd. Provided that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names, if a no objection by way of a Board resolution has been provided by an existing company.
(j) the addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc. does not make a name distinguishable from an existing name and similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed; such names may be allowed only if no objection from the existing company by way of Board resolution is submitted;	NA
(k) different combination of the same words does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of "Builders and Contractors Limited", the name "Contractors and Builders Limited" shall not be allowed unless it is change of name of existing company;	(g) the order of words in the names; F. Illustrations (i) Ravi Builders and Contractors Ltd. is same as Ravi Contractors and Builders Ltd. (ii) Ravi Builders and Contractors Limited is not the same as Ravi Shankar Builders and Contractors Limited.
NA	(h) use of the definite or indefinite article in one or both names; G. Illustrations (i) Congeniai Tours Ltd. is same as A Congenial Tours Ltd. and The Congenial Tours Ltd. (ii) Isha Industries Limited is not the same as Anisha Industries Limited. Provided. that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names, if a no objection by way of a Board resolution has been provided by an existing company.
NA	(i) a slight variation in the spelling of the two names including a grammatical variation thereof; H. Illustrations (i) Color Technologies Ltd. is same as Colour Technologies Ltd. (ii) Disc Solutions Ltd. is same as Disk Solutions Ltd. but it is not same as Disco Solutions Ltd.
(l) if the proposed name is the Hindi or English translation or transliteration of the name of an existing company or limited liability partnership in English or Hindi, as the case may be.	(j) complete translation or transliteration, and not part thereof, of an existing name, in Hindi or in English; I. illustrations (i) National Electricity Corporation Ltd. is same as Rashtriya Vidyut Nigam Ltd. (ii) Hike Construction Ltd. is not the same as Hike Nirman Ltd.
NA	(k) addition of the name of a place to an existing name, which does not contain the name of any place; J. Illustrations (i) If Salvage Technologies Ltd. is an existing name, it is same as Salvage Technologies Delhi Ltd and Salvage Delhi Technologies Ltd. (ii) Retro Pharmaceuticals Ranchi Ltd. is not the same as Retro Pharmaceuticals Chennai Ltd. Provided that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names, if a no objection by way of a Board resolution has been provided by an existing company.
NA	(1) addition, deletion, or modification of numerals or expressions denoting numerals in an existing name, unless the numeral represents any brand; K. Illustrations (i) Thunder Services Ltd is same as Thunder l l Services Ltd and OneThunder Services Ltd (ii) Style Garments l l Ltd. is same as Style Garments Ltd and Style12 Garments Ltd. (iii)One 1 I Power Equipment Ltd is not the same as One Power Equipment Ltd, if One 11 represents a brand: Provided. that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names, if a no objection by way of a Board resolution has been provided by an existing company.
(2) (a) The name shall be considered undesirable, if- (i) it attracts the provisions of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950); 7[(ii) it includes the name of a trade mark registered or a trade mark which is subject of an application for registration under the Trade Marks Act, 1999 and the rules framed thereunder unless the consent of the owner or applicant for registration, of the trade mark, as the case may be, has been obtained and produced by the promoters.]	8A. Undesirable names.- (1) The name shall be considered undesirable, if- (a) it is prohibited under the provisions of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950), unless a previous permission has been obtained under that Act; (b) save as provided in section 35 of the Trade Marks Act, L999 (47 of 1999), the name includes a trade mark registered under the Trade Marks Act, 1999 and the rules framed thereunder in the same class of goods or services in which the activity of the company is being carried out or is proposed to be carried out, unless the consent of the owner or applicant for registration, of the trade mark, as the case may be, has been obtained and produced by the promoters;
(iii) it includes any word or words which are offensive to any section of the people;	(1) The name shall be considered undesirable, if- (c) it includes any word or words which are offensive to any section of the people:
(b) The name shall also be considered undesirable, if- (i) the proposed name is identical with or too nearly resembles the name of a limited liability partnership,	(1) The name shall be considered undesirable, if- (d) the proposed name is identical with or too nearly resembles the name of a limited liability partnership. Provided that the provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a limited liability partnership, (e) the proposed name is identical with or too nearly resembles with a name which is for the time being reserved in accordance with rule 9: Provided that the provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling with a reserved name;
(iii) the company’s main business is financing, leasing, chit fund, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund or Investment or Loan, etc.;	(1) The name shall be considered undesirable, if- (f) the company's main business is financing, leasing, chit fund, investments, securities or combination thereof, but the proposed name is not indicative of such related financial activities. viz.. Chit Fund or Investment or Loan, etc.; (g) the company's name is indicative of activities financing, leasing, chit fund, investments, securities or combination thereof, but the company's main business is not related to such activities;
(iv) it resembles closely the popular or abbreviated description of an existing company or limited liability partnership;	(1) The name shall be considered undesirable, if- (h) it resembles closely the popular or abbreviated description of an existing company or limited liability partnership;
(v) the proposed name is identical with or too nearly resembles the name of a company or limited liability partnership incorporated outside India and reserved by such company or limited liability partnership with the Registrar: Provided that if a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is may be allowed with the addition of word India or name of any Indian state or city, if otherwise available;	(1) The name shall be considered undesirable, if- (i) the proposed name is identical with or too nearly resembles the name of a company or limited liability partnership incorporated outside India and reserved by such company or Limited liability partnership with the Registrar: Provided that if a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is may be allowed with the addition of word India or name of any Indian State or city, if otherwise available: Provided further that provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a company or limited liability partnership incorporated outside India;
(vi) any part of the proposed name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof e.g. co-operative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.; Explanation.- For the purposes of this sub-clause, it is hereby clarified that the name including phrase ‘Electoral Trust’ may be allowed for Registration of companies to be formed under section 8 of the Act, in accordance with the Electoral Trusts Scheme, 2013 notified by the Central Board of Direct Taxes (CBDT): Provided that name application is accompanied with an affidavit to the effect that the name to be obtained shall be only for the purpose of registration of companies under Electoral Trust Scheme as notified by the Central Board of Direct Taxes;	(1) The name shall be considered undesirable, if- (j) any part of the proposed name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof e.g. co-operative, sehkari, trust, LLP, partnership, society, proprietor, HUF Firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG, etc.; Explanation.- For the purposes of this clause, it is hereby clarified that the name including phrase 'Electoral Trust' may be allowed for registration of companies to be formed under section 8 of the Act, in accordance with the Electoral Trusts Scheme, 2013 notified by the Central Board of Direct Taxes (CBDT): Provided that name application is accompanied with an affidavit to the effect that the name to be obtained shall be only for the purpose of registration of companies under the said Electoral Trust Scheme as notified by the Central Board of Direct Taxes;
(vii) the proposed name contains the words ‘British India’;	(1) The name shall be considered undesirable, if- (k) the proposed name contains the words 'British India’;
(viii) the proposed name implies association or connection with embassy or consulate or a foreign government;	(1) The name shall be considered undesirable, if- (l) the proposed name implies association or connection with an embassy or consulate of a foreign government;
(ix) the proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in Government;	(1) The name shall be considered undesirable, if- (m) the proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in the Government:
(xi) the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding and a period of two years have not elapsed from the date of such dissolution: Provided that if the proposed name is identical with the name of a company which is struck off in pursuance of action 1["or under section 560 of the Companies Act, 1956(1 of 1956)"] then the same shall not be allowed before the expiry of twenty years from the publication in the Official Gazette being so struck off;	(1) The name shall be considered undesirable, if- (n) the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding and a period of two years has not elapsed from the date of such dissolution: Provided that if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 248 of the Act or under section 560 of the Companies Act, 1956 (1 of 1956) then the same shall not be allowed before the expiry of twenty years from the date of publication in the Official Gazette being so struck off;
(xii) it is identical with or too nearly resembles the name of a limited liability partnership in liquidation or the name of a limited liability partnership which is struck off up to a period of five years;	(1) The name shall be considered undesirable, if- (o) it is identical with the name of a limited liability partnership in liquidation or the name of a limited liability partnership which is struck off up to a period of five years;
(xiii) the proposed name include words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., unless a declaration is submitted by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with by the applicant;	(1) The name shall be considered undesirable, if- (p) the proposed name include words such as 'Insurance', 'Bank', 'Stock Exchange', Venture Capital', 'Asset Management'. 'Nidhi', 'Mutual Fund', etc., unless a declaration is submitted by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA, etc. have been complied with by the applicant;
(xiv) the proposed name includes the word "State", the same shall be allowed only in case the company is a government company;	(1) The name shall be considered undesirable, if- (q) the proposed name includes the word "State", in case the company is not a Government company;
(xv) the proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited;	(1) The name shall be considered undesirable, if- (r) the proposed name is containing only the name of a continent, country, State, city such as Asia limited, Germany Limited, Haryana Limited or Mysore Limited;
(xvi) the name is only a general one, like Cotton Textile Mills Ltd. or Silk Manufacturing Ltd., and not Lakshmi Silk Manufacturing Co. Ltd;	(1) The name shall be considered undesirable, if- (s) Use of descriptive names, where the name merely consists of commonly used words to describe an activity. Explanation.-For the purposes of this clause,- (A) the term "commonly used words" refers to use of generic expressions which may be used by any other company to describe its trade; (B) while determining whether a name is descriptive or not the objects of the proposed company or the order of words appearing (C) the name shall not be deemed  to be descriptive where “commonly used words” are used in addition to other words in the name A. Illustrations (i) The names Silk Manufacturers private Limited and Manufacturers Silk Ltd. are descriptive names as they merely describe an activity which may also be carried out by any other company and the order of the words is not relevant while determining a descriptive name. (ii) The names Computer World Ltd., Food Star Ltd., Tour Hub Ltd or House of Chocolate Ltd are not descriptive as the names do not merely consist of commonly used words. (iii) The descriptive words and names Technical Vista Ltd or Vista Technical are not as the names do not merely the order of the words is not consist of commonly used relevant while determining whether a name is descriptive. (iv) The name Drinking Water plant Ltd. is a descriptive name, even if the object of the company is not related to making drinking water plant as it consists of commonly used words and objects of the proposed company is not relevant while determining whether a name is descriptive. (v) The name Silk Wise Manufacturers private Limited is not descriptive as it contains words other than commonly used words.
(xviii) the proposed name includes name of any foreign country or any city in a foreign country, the same shall be allowed if the applicant produces any proof of significance of business relations with such foreign country like Memorandum Of Understanding with a company of such country: Provided that the name combining the name of a foreign country with the use of India like India Japan or Japan India shall be allowed if, there is a government to government participation or patronage and no company shall be incorporated using the name of an enemy country. Explanation.- For the purposes of this clause, enemy country means so declared by the Central Government from time to time.	(1) The name shall be considered undesirable, if- (t) the proposed name includes name of any foreign country or any city in a foreign country, the same shall be allowed if the applicant produces any proof of significance of business relations with such foreign country like Memorandum Of Understanding with a company of such country: Provided that the name combining the name of a foreign country with the use of India like India Japan or Japan India shall be allowed if, there is a government to government participation or patronage and no company shall be incorporated using the name of an enemy country. Explanation.- For the purposes of this clause, enemy country means so declared by the Central Government from time to time.
(5) The applicant shall declare in affirmative or negative ( to affirm or deny ) whether they are using or have been using in the last five years , the name applied for incorporation of company or LLP in any other business constitution like Sole proprietor or Partnership or any other incorporated or unincorporated entity and if, yes details thereof and No Objection Certificate from other partners and associates for use of such name by the proposed Company or LLP, as the case may be, and also a declaration as to whether such other business shall be taken over by the proposed company or LLP or not .	Rule 8A (2) The applicant shall declare in affirmative or negative (to affirm or deny) whether he is using or has been using in the last five years, the name applied or incorporation of company or LLP in any other business constitution like Sole Proprietor or Partnership or any other incorporated or unincorporated entity and if, yes details thereof and No Objection Certificate from other partners and associates for use of such name by the proposed Company or LLP, as the case may be, and also a declaration as to whether such other business shall be taken over by the proposed company or LLP or not.
(6) The following words and combinations thereof shall not be used in the name of a company in English or any of the languages depicting the same meaning unless the previous approval of the Central Government has been obtained for the use of any such word or expression- (a) Board; (b) Commission; (c) Authority; (d) Undertaking; (e) National; (f) Union; (g) Central; (h) Federal; (i) Republic; (j) President; (k) Rashtrapati; (l) Small Scale Industries; (m) Khadi and Village Industries Corporation; (n) Financial 8[Omitted] Corporation and the like; (o) Municipal; (p) Panchayat; (q) Development Authority; (r) Prime Minister or Chief Minister; (s) Minister; (t) Nation; (u) Forest corporation; (v) Development Scheme; (w) Statute or Statutory; (x) Court or Judiciary; (y) Governor; (z) the use of word Scheme with the name of Government (s) , State , India, Bharat or any government authority or in any manner resembling with the schemes launched by Central, state or local Governments and authorities; and (za) Bureau	8B. Word or expression which can be used only after obtaining previous approval of Central Government In terms of clause (b) of sub-section (3) of Section 4, the following words and combinations thereof shall not be used in the name of a company in English or any of the languages depicting the same meaning unless the previous approval of the Central Government has been obtained for the use of any such word or expression:- (a) Board; (b) Commission; (c) Authority; (d) Undertaking; (e) National; (f) Union; (g) Central; (h) Federal; (i) Republic; (j) President; (k) Rashtrapati; (l) Small Scale Industries; (m) Khadi and Village Industries Corporation; (n) Financial 8[Omitted] Corporation and the like; (o) Municipal; (p) Panchayat; (q) Development Authority; (r) Prime Minister or Chief Minister; (s) Minister; (t) Nation; (u) Forest corporation; (v) Development Scheme; (w) Statute or Statutory; (x) Court or Judiciary; (y) Governor; (z) the use of word Scheme with the name of Government (s) , State , India, Bharat or any government authority or in any manner resembling with the schemes launched by Central, state or local Governments and authorities; and (za) Bureau
(7) For the Companies under section 8 of the Act, the name shall include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc. Every company incorporated as a "Nidhi" shall have the last word ‘Nidhi Limited’ as part of its name.	(1) The name shall be considered undesirable, if- Rule 8A(u) the proposed name of a section 8 company under the Act does not include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust and the like. etc. Rule 8A (v) the proposed name of a Nidhi company under the Act does not have the last words "Nidhi Limited" as a part of its name.
(8) The names released on change of name by any company shall remain in data base and shall not be allowed to be taken by any other company including the group company of the company who has changed the name for a period of three years from the date of change subject to specific direction from the competent authority in the course of compromise, arrangement and amalgamation.	Rule 8A (w) the proposed name has been released from the register of companies upon change of name of a company and three years have not elapsed since the date of change unless a specific direction has been received from the competent authority in the course of compromise, arrangement or amalgamation