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The Ministry of Corporate Affairs (MCA) has recently revised the company name application and approval process and has issued the Company (Name Availability) Rules, 2011. A summary of these guidelines have been provided below.
Company Name – General Conditions
As per the Name Availability Guidelines 2011, while selecting the company name, the following points should be considered:
- The proposed name should not be undesirable or is identical with or too nearly resembling with the name of a Company / LLP (Limited Liability Partnership) already registered or names approved by ROC. For this purpose, the name availability search facilities provided on the portal of the Ministry of Corporate Affairs (MCA) shall be used.
- The proposed name is not infringing any registered trademarks or a trademark for which an application is filed.
- The proposed name is not in violation of the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time.
- The use of the proposed name(s) should not constitute an offence under any law.
- The proposed name is not offensive to any section of people.
Additionally, the following guidelines shall be considered:
- It is not necessary that the proposed name should be indicative of the main object of the company.
- If the Company's main business is finance, housing finance, chit fund, leasing, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund/ Investment/ Loan, etc.
- If the name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof, the same shall not be allowed. For eg: cooperative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.
- Abbreviated name such as 'BERD limited' or '23K limited' cannot be given to a new company. However the companies well known in their respective field by abbreviated names are allowed to change their names to abbreviation of their existing name (for Delhi Cloth Mills limited to DCM Limited) after following the requirement of the Companies Act. Further, if the name is general like Cotton Textile Mills Ltd., or Silk Manufacturing Ltd., the name cannot be allowed and if name is specific like Calcutta Cotton Textiles Mills Limited or Lakshmi Silk Manufacturing Company Limited, the same can be allowed.
- If the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding, the name cannot be allowed for a period of 2 years from the date of such dissolution. Moreover, if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 560 of the Act, then the same cannot bee respective Act/ allowed for 20 years from the date of publication in the Official Gazette.
- If the proposed names include words such as Insurance Bank, Stock Exchange, Venture Capital , Asset Management, Nidhi , Mutual Fund etc., the name can be allowed with a declaration by the applicant that the requirements mandated by thRegulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with by the applicant.
- If the proposed name includes the word 'State', the same shall be allowed only in case the company is a government company. Also, if the proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited, the same cannot be allowed;
- If the proposed name contains any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central or any State Government under any law for the time in force, unless the previous approval of Central Government has been obtained for the use of any such word or expression;
- If a foreign company is incorporating its subsidiary company, the original name of the holding company as it is can be allowed with the addition of word India or name of any Indian state or city, if available otherwise as per the Guidelines.
- If the name of the company uses the any of the key words provided below, the authorised share capital shall be as per the guidelines:
Panel heading
| S.No. | Key Words | Required Authorised Capital |
|---|---|---|
| 1 | Corporation, corp, corpn, corp. | 25 crore |
| 2 | International, Globe, Global, World, Overseas, Universe, Universal, Continent, Continental, InterContinental, Asiatic, Asia, Asian being the first word of the name | 5 crore |
| 3 | If any of the words at (2) above is used within the name (with or without brackets) | 2 crore |
| 4 | Hindustan, India, Indo, Indian, Bharat, Bharatvarsh, Bhartiya or any other country’s name being first word of the name | 2 crore |
| 5 | If any of the words at (4) above is used within the name (with or without brackets) | 25 lakhs |
| 6 | Industries/ Udyog | 5 crore |
| 7 | Enterprises, Products, Business, Manufacturing, Venture | 50 lakh |
Points that need not be considered while choosing a name
However, while determining whether a proposed name is identical with another, the following shall be disregarded:
The words Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership
The words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.
The plural version of any of the words appearing in the name
The type and case of letters, spacing between letters and punctuation marks
Joining words together or separating the words, as this does not make a name distinguishable from a name that uses the similar, separated or joined words. Such as Ram Nath Enterprises Pvt. Ltd. will be considered as similar to Ramnath Enterprises Pvt. Ltd.
The use of a different tense or number of the same word, as this does not distinguish one name from another. Such as, Excellent Industries will be similar to Excellence Industries and similarly Teen Murti Exports Pvt. Ltd. will be to Three Murti Exports Pvt. Ltd.
Using different phonetic spellings or spelling variations, as this does not distinguish one name from another. For example, J.K. Industries limited is existing then J and K ndustries or Jay Kay Industries or J n K Industries or J & K Industries will not be allowed. Similarly if a name contains numeric character like 3, resemblance shall be checked with 'Three' also
The addition of an internet related designation, such as .COM, .NET, .EDU, .GOV, ORG, .IN, as this does not make a name distinguishable from another, even where (.) is written as 'dot'
The addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc., as this does not make a name distinguishable from an existing name such as New Bata Shoe Company, Nav Bharat Electronic etc. Similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed. For example, 'Unique Marbles Delhi Limited' cannot be allowed if 'Unique Marbles Limited' already exists. Such names can be allowed if a no objection from the existing company by way of Board resolution is produced / submitted for allowing the proposed name.
Different combination of the same words, as this does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of "Builders and Contractors Limited" , the name "Contractors and Builders Limited" should not be allowed
Exact Hindi translation of the name of an existing company in English especially an existing company with a reputation. For example, Hindustan Steel Industries Ltd. will not be allowed if there exists a company with name 'Hindustan Ispat Udyog Limited'.
However, while determining whether a proposed name is identical with another, the following shall be disregarded: