Section 16 of CA 2013 : Section 16: Rectification Of Name Of Company

Explanation using Example

Imagine a scenario where a new startup company, "QuickTech Innovations Private Limited," registers itself under the Companies Act, 2013. A few months after registration, it comes to the attention of the Central Government that there is an existing company named "QuickTech Industrial Solutions Limited" which was registered under a previous company law. The names are deemed too similar and could potentially confuse stakeholders or the public.

The Central Government, under Section 16(1)(a) of the Companies Act, 2013, directs "QuickTech Innovations Private Limited" to change its name. The company complies and holds a meeting where an ordinary resolution is passed to change the name to "Innovative QuickTech Private Limited" within the three-month period stipulated by the Government.

Once the name change is approved, "Innovative QuickTech Private Limited" must notify the Registrar of Companies within fifteen days, as per Section 16(2), and provide the order from the Central Government. The Registrar will then update the company's certificate of incorporation and memorandum to reflect the new name.

If the company had failed to comply with the direction to change its name, it would face a fine as described in Section 16(3), accruing daily until the company rectifies the situation, and the officers of the company would also be subject to fines.