Incorporation of a company means forming a new entity to run a business. The corporation formed by such procedures could be a business, a non-profit organization, a startup, or a micro small or medium scale business (MSME). The company incorporated by filing various forms and documents under the MCA (Ministry of Corporate Affairs) is registered under the Registrar of Companies (RoC).
The concept of name availability comes from the fact that it must not resemble any existing Company or LLP. Also, the proposed name should be formed as per the principles framed by the central government.
The first and foremost rule concerning the same is selection of a unique and proper name by running a check on MCA’s portal. The portal ascertains the name availability of a proposed name.
Guidelines to Check Name of an Entity
The Registrar of Companies (RoC) has stated rules for companies across India. A no. of these rules are subjective, which means that approval or rejection depends upon the officer’s opinion while handling the application.
- The applicant must follow all the norms to settle on the corporate name
- The name chosen for the firm must not be identical or similar to any existing company.
- Use of articles (a, an, the) will not be considered a singular name.
- Applicants must avoid using phonetic words.
- Applicants must avoid using any offensive term.
- An applicant should also do a Trademark search on the following link (https://ipindiaonline.gov.in/tmrpublicsearch/frmmain.aspx) to ensure that name availability and avoid duplication.
If the conditions mentioned above are met, then the applicant can register the name.
- Company names that have the words insurance, bank, stock market, asset management, open-end fund etc., require regulatory approvals from authorities like IRDA, SEBI, RBI, etc.
- Company names with words like International, Globe, India, Asia, etc., must have a minimum authorized capital of INR 5 lakhs or above. Post this, the applicant must check the corporate name availability to avoid rejection from the MCA.
Process to See Name Availability
To check name availability, the applicant must first visit the MCA portal and then the Trademark checking portal. The subsequent steps should be followed by an applicant:
- Go to the website: www.mca.gov.in.
- To check the name availability on the MCA portal, open the check name tab on the website.
- Enter the proposed name with the first commercial activity of the firm to possess accurate results.
- The search results will show if there is an identical name. If the proposed name is not there in the MCA inventory, it will show a mistake as the Entered name doesn’t exist.
- While checking name availability, one should only enter the first two words of the proposed name.
- As per the principles, the applicant should check the Trademark portal to search the corporate name’s availability.
- The proposed name should not resemble any existing trademark, except in case the trademark owner has given NOC to use his/her trademark.
- To do a Trademark research, visit www.ipindia.gov.in, and open the trademark search tab. Enter name and start searching.
- The applicant should also check the similar phonetic names to avoid objections.
- If the name is not found in the results, the applicant can move ahead with using it.
- If the proposed name is absolutely unique, the applicant can directly apply by filing requisite forms on the MCA portal.
- If the probabilities of name availability matching are more, then the applicant can also file a separate name application. In the application, he can apply for a maximum of two maximum. If any of those names is not approved, then he can apply with the other name.
Rejection Norms for Proposed Name
MCA (Ministry of Corporate Affairs) has designed a regulatory framework to name a corporate. If someone’s proposed name doesn’t fall into the category of MCA rules, his application will be rejected.
The subsequent points can lead to rejection of the proposed name:
- Use of abbreviations, adjectives, and generic terms, could lead to rejection.
- Description of the corporate name should have significance.
- If the addition of a toponym makes the corporate name different from an existing one, it’ll be rejected.
- The word ‘state’ can only be used by the government.
- The proposed name must not contain any offensive words to public morality or should not have any profanity.
- A mere translation of the name from English to Hindi of an existing company will lead to rejection. (For Example, RIT Aam Producers won’t be approved if a company named RIT Mango Producers exists.)
- Do not add commonly used words within a proposed name.
- The applicant must adhere to the norms following which MCA can reject the name.
Sections of Companies Act Dealing with Name Selection
Name of the corporation or a firm is a crucial component of the business. The primary impression about it is brought from the name. Therefore, a singular distinctive name is usually a preferred choice. Now it must be noted that even the proposed name of the corporate is scrutinized as per the rules laid down by the authority and so it undergoes the uniqueness test. Thus, it should be ensured that the name doesn’t fall in contravention to section 4(2) and (3) of the Companies Act, 2013. The sections are read with the Rule 8 of the Companies (Incorporation) Rules,2014.
As per Section 4(2) the proposed name shouldn’t
- be illegitimate as per the norms of the Central Government.
- be similar or resemble the name of an existing firm registered under this Act or any previous Act.
Section 4(3): A firm won’t be registered with a name which has in any of its word/s or expression has an impact that in any way shows association to the Central or any state government, or any of its corporation, agency, or body constituted by it. This is true unless a prior approval has been granted for such use.
Rule 8 for Undesirable Names:
In determination of a proposed name identical with other allotted or reserved name, a number of the differences could be taken into account:
- Plural versions of any of the words within the name could be discarded,
- Words appearing on top of the names like company, corporation, corp. and Co. etc could also be disregarded
- Misspelt words, whether intentional or not, if conflict with a similar, properly spelt word.
- Type and case of letters, punctuation marks, and spacing between letters.
- Words like Private, Pvt., Pvt, (P), Limited, Ltd., Ltd, LLP, etc.
- Use of a tense or a number of an equivalent word which doesn’t distinguish one name from another.
- A different combination of similar words which doesn’t make the proposed name different from an existing name.
- Using various phonetic spellings variations as it won’t be considered as distinguishing point from another.
- The addition of words like Modern, Shri, Nav, Om, Sai, Pal, Ram, Jai, etc. don’t make the name distinguishable from an existing name.
- For the businesses under section 8, the name must include words such as Chambers, Confederation, foundation, Association, Forum, foundations etc.
OTHER IMPORTANT POINTS FOR REJECTION OF NAME
- Name of an already registered trademark or which is similar to the proposed name. The application for registration can only be made after the consent has been obtained from the trademark owner.
- The proposed name implies association with a foreign land or reference to an embassy or consulate or a foreign government.
- If the proposed name has the words ‘British India’.
- If it in any way attracts the attention of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950).
- The proposed name includes words indicative of a separate business structure like a trust, proprietor, Sahakari, co-operative, or other such entities.
- The proposed name includes or implies any reference to a national hero or a person of importance and people in high positions within the government.
- The proposed name is vague e.g. ‘123K ltd’ or ‘PP3456khOL Ltd’ etc.
Other important detail to be checked while deciding the name is,
- It must not be like the name of a corporation dissolved under liquidation proceeding in the previous two years.
- The name should not be similar to the name of the firm which has been struck off in the previous 5 years under section 248 of the Companies Act.
- If it contains the name of a City, a State, a Continent, etc.
- If the name is just a generic one, like Cloth Mills or dairy products, etc.
- The words or combinations cannot be utilized in the name of a firm in any language translating to an equivalent meaning unless the prior approval of the Central Government is given.
- Words like Board, Rashtrapati, Commission, Small Scale Industries, Authority, Undertaking, National, Union, Minister, Municipal, Panchayat, Prime Minister or Chief Minister, Development Authority, Nation, Forest Corporation, Governor, must be avoided as it can create conflicts with the government and its institutions.
- Utilization of word ‘Scheme’ in any way to resemble schemes introduced by the Government at any level or authority should be avoided to inhibit confusion.
- In case the name is of an individual who is not the promoter or a close blood relative, then generally an NOC from such person(s) must be attached with the application for the name registration.
Checking Name availability:
The portal provides options to search for the word/s or phrase/s within the proposed name. They further provide elaborate results to avoid similarities of any kind with an already registered name. The results may then be analyzed before finalizing the name for applying to the authority.
So, this brings us to the end of this writing piece. We understood how to conduct the Company Name Availability Check and the services associated with company name registration on the MCA portal. is to see the proposed name availability. We also understood how to check the similar words or phrases associated with a proposed name. In the later sections we explored typical words which must be avoided while name registration.
After a deep understanding of all these rules and norms, a promoter can easily apply for a company name with its own uniqueness. This also helps in creation of a distinct brand identity for the company. Nowadays, many legal and financial consultancy firms help companies in company registration and name finalisation. New promoters can contact such firms to seamlessly register their company and its name with the RoC.