Companies Act Section 16 — Rectification of name of company
CHAPTER II INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO
Commercial / Corporate
Summary
Sub-section (1) deals with a company being registered under a name that is too similar to an existing company or trade mark. If the Central Government believes, on its own, that the company's name is identical to or too closely resembles the name of a company already registered under this Act or any earlier company law, it can direct the company to change its name. The company must then change its name within three months of receiving that direction, and it must do so by passing an ordinary resolution.
Under clause (b) of sub-section (1), the same power applies when a registered trade mark owner applies to the Central Government. This application must be made within three years of the company's incorporation, registration, or change of name. If the Central Government agrees that the company's name is identical to or too closely resembles the registered trade mark, it can direct the company to change its name. The company must then change its name within three months of the direction, again by passing an ordinary resolution.
Sub-section (2) sets out what happens after the company changes its name under sub-section (1). Within fifteen days of the change, the company must give notice to the Registrar, along with the Central Government's order. The Registrar will then make the necessary changes to the certificate of incorporation and the memorandum.
Sub-section (3) covers the situation where a company fails to comply with a direction given under sub-section (1). In that case, the Central Government will allot a new name to the company in the manner prescribed, and the Registrar will enter that new name in the register of companies, replacing the old name, and issue a fresh certificate of incorporation with the new name. The company must use this new name from then on. The proviso to this sub-section clarifies that this does not stop the company from later changing its name again under the provisions of section 13.
Official Text
(1) If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,—
(a) in the opinion of the Central Government, is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose;
(b) on an application by a registered proprietor of a trade mark that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999 (47 of 1999), made to the Central Government within three years of incorporation or registration or change of name of the company, whether under this Act or any previous company law, in the opinion of the Central Government, is identical with or too nearly resembles to an existing trade mark, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a 3[period of three months] from the issue of such direction, after adopting an ordinary resolution for the purpose.
(2) Where a company changes its name or obtains a new name under sub-section (1), it shall within a period of fifteen days from the date of such change, give notice of the change to the Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation and the memorandum. 4[
(3) If a company is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the company in such manner as may be prescribed and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter:
Provided that nothing in this sub-section shall prevent a company from subsequently changing its name in accordance with the provisions of section 13.]