There are several dos and don'ts pertaining to the coining of the name of a company. Keeping those in mind, an appropriate name should be selected, as the name of the business has the ability to make or break the business. In this article you will learn about name guidelines as per the companies act of 2013.
Name Guidelines As Per The Companies Act Of 2013 :A brand name is the major asset of a business. A name carries the goodwill of the business to the customers and potential clients in the market. A brand name is the biggest identity of a business and stays put with the business as long as it exists. Perhaps, that’s the reason why the Companies Act, 2013 and the Companies (Incorporation) Rules, 2014 go a long way in enforcing the rules that are to be abided by the businesses while naming their companies, whether it is a private limited company, an OPC.
Name Guidelines As Per The Companies Act Of 2013: Person Company) or LLP (Limited Liability Partnership)
The following factors have to be kept in mind before deciding that winning name of the company, which would carry the company to places:
Name Guidelines As Per The Companies Act Of 2013 :The Name of the Company Should Be Unique
The name of the company should be novel and unique in order to be approved by the Ministry of Corporate Affairs. (MCA). The name thus proposed should not bear any resemblance to the names of the existing companies or LLPs. The following factors must be tested out while coining the name of the company.
- Check for Plurals: If the name chosen for the company is merely the plural version of an existing name, then the name is not considered unique. For Instance, if the name of a company is ‘Novotel Gear Private Limited’, then the name, ‘Novotel Gears Private Limited’ is not unique and will stand rejected
- Spaces Between the Words, Punctuations, Letter Case, etc.: Making alterations to the letter cases or the spacing between the words or to the punctuation marks in an already existing name does not render the name unique. If the name of a company is ‘Novotel Gear Private Limited’, then the name, ‘Novotel gear Pvt Ltd’ or ‘NOVOTEL GEAR Private Limited’ are not unique and cannot be registered
- Combining or Disjoining the Words: Arriving at a name by joining or detaching the words of an existing brand name will not be considered a new or unique name. If the name of a company is ‘Novotel Gear Private Limited’, then the name, ‘NovoTel Gear Private Limited’ or ‘Novotel Gear Private Limited’ will not be granted approval
- Change in Tense or Wording a Number in an Existing Name: In an attempt to come up with a new name for the company, if the business owner merely plays around with the tenses of an existing brand name or changes the numbers in the name to words or vice versa, the resulting name would be rejected. If the name of a company is ‘Novotel One Gear Private Limited’, then the name, ‘Novotel’s One Gear Private Limited’ or ‘Novotel 1 Gear Private Limited’ will be rejected on the basis of lacking uniqueness
- Variations in Phonetics or Spellings: Merely resorting to minor changes in the phonetics or spellings of a brand name that is in use would not make the resultant name novel or unique. For instance, if the name of an existing company is ‘M.N.M Private Limited’ and if a company comes up with the name ‘EM.EN.EM Private Limited’, the name will stand rejected.
- Purposely Misspelled Names: If the words in the name of a private company are merely altered or misspelled, the resulting names will be checked against the originally registered names for uniqueness and will be rejected if the name bears similarity to the former. If the name of a registered company is ‘Magic Movies Private Limited’ and if another new business comes up with the name ‘Maggic Movies Private Limited’, the latter will be disapproved although there is a variation in the spelling of the names.
- Addition of Internet Related Domain Names: Making alterations to existing names by barely adding internet-related domain names such as .com, .net, .org etc cannot be considered for the purposes of registration. For instance, if the name of a registered company is ‘Magic Movies Private Limited’, coming up with a name like ‘Magic Movies.com Private Limited’ will be dismissed.
- Inclusion of Common Titles: Adding words like The, Modern, New, Shri, Sree, Om, Jai, etc does not make the title unique. For instance, if the name of a registered company is ‘Magic Movies Private Limited’, the name ‘The New Magic Movies Private Limited’, is not considered to be unique.
- Affixing Names of Places: The addition of names of countries, cities, or other geographical locations to an existing name will not make the name unique. If the registered name is ‘Magic Movies Private Limited’, merely adding the word, say, India to it and making it ‘Magic Movies India Private Limited’ will not make the name pass the test of uniqueness.
- Reversing the Combination of Words: rearranging or reversing the order of words in an existing title cannot be considered as uniqueness. For instance, if the registered name is ‘Packers and Shakers Private Limited’, changing it to ‘Shakers and Packers Private Limited’, is not considered to be unique.
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Further, the name thus chosen should also follow the pointers listed below:
- The name should not use or violate emblems and names and should be in consonance with the Emblems and Names (Prevention and Improper Use) Act 1950
- The name proposed for the company should not violate or be incompatible with the Trademarks Act, 1999
- The name of the company should not contain any word that is offensive or repulsive to any section of people
- The name of the company should not bear any resemblance to names of LLP firms or with names that are being reserved by the MCA
- The name of the company should reflect its nature of business as delineated in the Memorandum of Association (MoA) of the company
- If the company deals with financial activities, like chit funds, investments, securities, or a combination of these activities, the name of the company should indicate the same
- The name should not include words indicating a legal entity or any connotation thereof like Trust, LLP, Partnership, HUF, proprietor etc. as a part of the name
- The name should not contain the words ‘British India’
- The name of the company should not imply as though it is connected with the embassy or consulate or with any foreign government when it is not so in reality
- The name of the company should not be linked to any patronage or a national leader or any person deemed to be respectable or persons occupying critical position in the government
- Vague or abbreviated names are strictly discouraged such as ‘XYZ Private Limited’, or ‘ABK Private Limited’ signifying names starting with the initial letters of names Amar, Bharat, Kumar etc.
- The name should not resemble the names of the companies that are liquidated. A minimum time frame of two years must be given before taking the names of such companies
- The name of the company should not be identical to a company that was struck off. The name cannot be utilized before the expiry of 20 years after which the name will be struck off from the official Gazette
- If the name of the company includes words such as ‘Bank’, ‘Insurance’, ‘Stock Exchange’, it requires the approval of the respective regulators like RBI (Reserve Bank of India), SEBI (Securities and Exchange Board of India), IRDA (Insurance Regulatory and Development Authority), etc
- A private company cannot use the word ‘State’ as part of the company’s name. The word is allowed to be used only by government companies
- Names that are too generic like names of countries, continents, states, etc are disallowed. For example, Chennai Limited, Mysore Limited, etc. The name of another country cannot be used as a part of the name of the company unless there is a valid proof of business alliance with the respective country such as a valid MoU
- Including names such as National, Union, Republic, Federal, etc require the approval of the Central Government.
Thus, it is pertinent to follow all the rules mentioned, while coming up with the name of a company. Although the list seems too exhaustive, given the permanence of the name of the company and the importance it carries, it is important to take note of such minute details. The name of the company will travel along with the company and have perpetual existence and might be carried on from generation to generation. Hence, all due care has to be demonstrated while choosing the name of the company.
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