In the process of Incorporation of new company, a unique name of company must be reserved with Ministry of Corporate Affairs (MCA). Rule 8 of Companies Incorporation Rules 2014 provides name approval/availability guidelines as per Companies Act 2013 while selecting the names for company. Here is a detailed analysis of the points to be considered while selecting name in the process of company formation.
THE NAME SHOULD NOT BE IDENTICAL WITH ANOTHER COMPANY ALREADY EXISTING
While checking whether the new name is identical to existing company following test shall be applied:
- CHANGES IN FORMS & TYPE OF COMPANY :
Change in the forms or type of company or change in type of business in proposed name doesn’t make a name unique.
EXAMPLE :Where there already exist a company with name “INFOSYS COMPANY LIMITED” then INFOSYS Pvt Ltd, INFOSYS LLP, INFOSYS Corporation, Infosys Private Limited, Infosys and Co, Infosys (OPC) Pvt Ltd will not be allowed.
- CHANGE TO PLURAL VERSION & DIFFERENT TENSE
Plural version of existing name orusing different tense or number of same word does not make the word unique.
EXAMPLE : Where there already exists a company with name“ONE PLUS PRIVATE LIMITED” then 1 Plus Private Limited, ONEPLUSER Private Limited, Onepluses Private Limited, ONESPLUS Private Limited cannot be used.
- CHANGE IN FORMAT OF WORDS
Change in case letter, spacing between letter, punctuation mark, joining or separating the words does not make the proposed new name unique.
EXAMPLE : Where there already exists a company with name “VISTA PLAY PRIVATE LIMITED” then Vista-Play Pvt Ltd, Vista Play Pvt Ltd, Vistaplay Pvt Ltd cannot be used.
- PHONETIC SPELLINGS & MISPELLED WORDS
If there is intentionally or unintentionally changes in spelling or phonetic spelling are used it does not make proposed name unique.
EXAMPLE : Where there already exists a company with name “JAI SHREE PRIVATE LIMITED” then Jay Shri Private Limited, J Shree Private Limited, Jai Sree Private Limited, Shree Jai Private Limited cannot be used.
- INTERNET RELATED DESIGNATION
The addition of internet related designation like .com .net, .edu, .gov, .org, .in, or just .(dot) cannot be used.
EXAMPLE : Where there already exists a company with BIG BASKET PRIVATE LIMITED, then Bigbasket.com Private Limited or Bigbasket.org Private Limited cannot be used
- ADDITION OR DELETION OF WORDS
Addition or deletion of word or title like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, Theetc in the proposed new name will not make it unique.
EXAMPLE : Where there already exists a company with name “INDIGO PRIVATE LIMITED” the name New Indigo Private Limited, The Indigo Private Limited, Indigo India Private Limited, Indig Private Limited cannot be used
- DIFFERENT COMBINATION OF SAME WORDS
The different combination of the same words does not make a name distinguishable from an existing name.
EXAMPLE : Where there is Company with name Larsen & Toubro Private Limited then the name Toubro & Larsen Private Limited cannot be used.
THE PROPOSED NAME SHALL NOT BE UNDESIRABLE
The proposed name shall be considered undesirable if it attracts the following points :
The proposed name should not be Registered Trademark or there must not be any Application For Trademark with the proposed name under trademark act 1999, the consent of trademark holder along with identity and address proof of trademark will be required if applying for that name.
EXAMPLE : Where there exists a registered trademark with name DETTOL or HARPIC the name DETTOL PRIVATE LIMITED or HARPIC PRIVATE LIMITED cannot be used.
- SECTION 3 OF EMBLEMS AND NAMES (PREVENTION AND IMPROPER USE) ACT 1950
The proposed name shall not include the name, design, emblem related to Government, United Nations or World organisations.
EXAMPLE : The proposed name must not be AIMS Private Ltd, Republic Of India Private Limited, World Health Limited, NASA Private Limited
- THE PROPOSED NAME IMPLIES ASSOCIATION OR CONNECTION WITH EMBASSY, FOREIGN GOVERNMENT OR NATIONAL HERO OR IMPORTANT PERSONALS IN INDIA
The proposed name should not include any association or connection with National Hero or person held in high esteem or important personal as well as not imply connection with foreign government.
EXAMPLE : The proposed name like Sardar Vallabhbhai Patel Private Limited, Bhagat Singh Limited, Australian Government Private Limited cannot be used.
- THE PROPOSED NAME INCLUDES THE WORD STATE OR NAME OF STATE, COUNTRY, CONTINENT, CITY
The proposed name which includes the word “State” or name of state, country, continent, city shall be considered undesirable.
If 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.
EXAMPLE :The proposed name like Prakash State Private Limited, Argentina Private Limited, Mysore Limited, Asia Limited, Tamil Nadu Limited shall not be acceptable.
- THE PROPOSED NAME IS GENERAL WORD
The proposed name is general and common word used in day to day life will be considered undesirable.
EXAMPLE : The proposed name such as Cotton Textile Mills Limited, Technology Limited, Foods Private Limited, Silk Cottons Limited, Consulting Private Limited will not be acceptable.
- THE USE OF THESE WORDS WITH CENTRAL GOVERNMENT’S APPROVAL
Any name that includes any word in the following list will require approval from the Central Government :
Board, Commission, Authority, National, Union, Central, Federal, Republic, President, Rashtrapati, Small Scale Industries, Khadi and Village Industries Corporation, Financial, Forest, Municipal,Prime Minister or Chief Minister, Minister, Nation, Forest corporation, Development Scheme, Statute or Statutory, Court or Judiciary, Governor.
EXAMPLE:The Names such as Rashtrapati Private Limited, Swach Bharat Abhiyan Limited, Central Company Limited will not be allowed unless Central Government’s approval is obtained.
- IT INCLUDES OFFENSIVE WORDS
The name shall be considered undesirable if it includes any word which are offensive to any section of the people. Use of any offensive or undesired word in proposed name shall not acceptable.
- NAME INCLUDES WORDS INDICATING SEPARATE TYPE OF BUSINESS
The proposed 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.
EXAMPLE :The name with separate type of business such as LAKSH Co-operative Private Limited, Gauri HUF Limited, Vision Partnership Private Limited cannot be allowed.
- RESEMBLES DESCRIPTION OR NAME RELATED TO EXISTING COMPANY/LLP
The proposed nameis 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.
EXAMPLE : The name such as Pepsi Limited, Xiaomi Private Limited, TESLA Limited shall not be acceptable unless consent of Parent Company is obtained
The proposed name resembles closely with popular or abbreviated description of an existing company or limited liability partnership.
EXAMPLE : The popular abbreviated names such as AMUL (Anand Milk Producers Union Limited), HTC (Hight Tech Computer Limited), MRF(Madras Rubber Factory) shall not be acceptable.
SPECIAL RULES FOR APPLICATION OF NAME :
- SECTION 8 COMPANIES
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.
EXAMPLE : The name of Section 8 company will be such as Manthana Chambers, Ehsaas Foundation, Aastharaj Association etc.
- FINANCING ACTIVITY AS THE MAIN OBJECT
Where the company’s main business would be financing, chit fund, investments, securities or combinations, such name shall not be allowed unless the NAME IS INDICATIVE of such activities and if the name includes words such as ‘INSURANCE’, ‘BANK’, ‘STOCK EXCHANGE’, ‘VENTURE CAPITAL’, ‘ASSET MANAGEMENT’, ‘NIDHI’, ‘MUTUAL FUND’ etc., unless a DECLARATIONis 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;
EXAMPLE : The names shall be accepted with indicative such as SMAYAN INVESTMENTS PRIVATE LIMITED,SAI FINANCING LIMITED, EGON INSURANCE LIMITED.
- NIDHI COMPANIES
Every company incorporated as a “Nidhi” shall have the last word ‘NIDHI LIMITED’ as part of its name and declaration is to 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;
EXAMPLE : The names shall be accepted with indicative such as SIDDHESWARNIDHI LIMITED, BKL NIDHI LIMITED, VAIDHNATH NIDHI LIMITED
OTHER MISCELLLANOUS POINTS :
- 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;
- The use of name of any schemes of Government, State, Bharat (word), etc shall also be not allowed.
- 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 then the same shall not be allowed before the expiry of twenty years from the publication in the Official Gazette being so struck off.
- The proposed name shall not include the word “British India”.