A company name is the first identity of a company. Thus, it is essential to have an appropriate name for your company. The consumers or investors identify the company from its name. In India, a company owner must follow the provisions of the Companies Act, 2013 (‘Act’) and the Companies (Incorporation) Rules, 2014 (‘Rules’) before selecting the company name.
It is necessary to decide the company name before applying for company registration as the name has to be approved by the Registrar of Companies (‘ROC’). The proposed name of the company should be stated in Part-A of the registration form, i.e. SPICe+ Form. When the proposed name does not comply with the provisions of the Act and Rules, the ROC will reject the name and the registration form.
Only one name can be proposed in the SPICe+ application. If the ROC rejects the proposed name, the company has to file another SPICe+ application proposing another name along with prescribed fees. Thus, while deciding on a company name, the provisions under the Act and the Rules have to be complied with to obtain approval from the ROC.
Rules for Selecting Company Name Under the Companies Act
The Companies Act provides that the proposed name should not resemble too nearly or be identical with the name of an existing registered company. If the company name is similar or identical or resembles an already registered company or Limited Liability Partnership (LLP) name, the ROC will reject the proposed name.
The ROC will reject a proposed name if its use by the company will constitute an offence under any law in force or is undesirable in the opinion of the Central Government. Further, a company cannot be registered with a name that contains:
- A word or expression that gives an impression that the company is connected with or has the patronage of the Central Government or State Government, any local authority, corporation or body constituted by the Central or State Government.
- Words or expressions prescribed under Rule 8B of the Incorporation Rules, which can be used after obtaining the prior approval of the Central Government.
Further, an OPC should have the suffix of ‘(OPC) Private Limited’ in its name. Similarly, a private company should have the suffix of ‘Private Limited’ in its name, and a public company should have the suffix of ‘Limited’ in its name.
Resembling Names of Companies Under the Incorporation Rules
A ROC will deem the proposed company name to resemble an existing company name after comparing both the names and following the Rules set out under Rule 8(2) of the Rules. Rule 8(2) of the Rules state that the ROC will reject a company name for the reason of it resembling an existing company name when the proposed name:
- Is in the plural or singular of an existing company name.
- Uses a different spacing between letters, types and cases of letters, tenses, special characters, punctuation marks, or phonetic spellings, including misspelt words of an expression than the existing company name.
- Uses a domain extension such as ‘org’, ‘net’, ‘com’, ‘dot’ or host-names such as ‘www’ in an existing company name unless the existing company has provided a no-objection through a Board resolution.
- Changes the order of words in the existing names unless the existing company has provided a no-objection through a Board resolution.
- Uses a definite or indefinite article in an existing company name unless the existing company has provided a no-objection through a Board resolution.
- Varies the spelling of the existing company name, including a grammatical variation.
- Translates or transliteration of the complete existing name in Hindi or English.
- Adds the name of a place to an existing company name unless the existing company has provided a no-objection through a Board resolution.
- Adds, modifies or deletes numerals or expressions denoting numerals in an existing name unless a no-objection by way of a Board resolution has been provided by an existing company.
Undesirable Names for Company Under the Incorporation Rules
Rule 8A of the Rules provides that the proposed name of the company will be undesirable, and the ROC will reject the same when the proposed name:
- Is forbidden under Section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950, unless prior permission has been obtained under that Act.
- Includes a trademark registered under the Trade Marks Act, 1999 and the Trademark Rules in the same class of services or goods in which the activity of the proposed company is being carried out unless the promoters obtain and produce the consent of the owner or applicant of the trademark registration application.
- Includes any word(s) that are offensive to a section of the people.
- It is not indicative of the company’s financial activities when its main business is leasing, financing, investments, securities, chit funds or a combination thereof.
- It is indicative of the financial activities, leasing, financing, investments, securities, chit funds or a combination thereof, but its main business is not related to such activities.
- It closely resembles the abbreviated or popular description of an existing company or LLP, either in India or incorporated outside India and reserved by such LLP or company with the ROC.
- Includes words representing legal persons or connotations or business constitution like HUF, Firm, Inc., PTE, AG, etc.
- Contains the words ‘British India’.
- Implies connection or association with a consulate or embassy of a foreign government.
- Implies or includes connection or association or patronage of a national hero or important personages who are occupying or occupied important positions in the government or any person held in high esteem.
- Is identical to the name of a dissolved company, and two years has not elapsed from the date of such dissolution.
- Is identical with the name of an LLP in liquidation or an LLP struck off up to a period of five years.
- Includes words such as a bank, insurance, stock exchange, asset management, venture capital, mutual fund, Nidhi, etc., unless a declaration is submitted that the requirements mandated by the respective regulator, such as RBI, IRDA, MCA, SEBI, etc. have been complied with.
- Includes the word ‘State’, in case it is not a government company.
- Contains the name of only a country, continent, state, city such as Mysore Limited, Asia Limited, Haryana Limited, etc.
- Uses descriptive names, where the proposed name merely consists of commonly used words to describe its activity.
Tips to Select A Company Name
Below are a few general tips to help you select your name:
- Choose a name that is simple, catchy, easier to remember, pronounce and recognise.
- Choose a thoughtful name that represents and communicates your brand significantly to your customers.
- The proposed name should clarify or propagate the vision and motive of your proposed business.
- Avoid the usage of adjectives, abbreviations, generic, rigid and complex words.
- Do a thorough research of the existing company names by searching on the MCA database, so you avoid a name that is identical or resembles an already existing registered company name. You can search for existing company names here.
- Do a thorough check of trademark search to avoid a similar name of existing registered or proposed to be registered trademark.
- While applying for your company’s name with the MCA, describe the vision or objective behind the name.
- Choose a name that sounds good when it is said aloud and has some meaning to you. Make sure you are happy with the name you choose for your company.
- Choose a name that you can apply for a trademark.
- Do not choose a name that could be limiting your business. Pick a name that you can use as your business grows.
- Come up with five to six options and finalise a name that complies with all the rules and regulations mentioned above.
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