Naming Guidelines As Per Companies Act 2013
Naming Guidelines As Per Companies Act 2013
The draft rules under Companies Act, 2013 defines the naming guidelines for companies (i.e., Private Limited Company, One Person Company and Limited Company). As per the Act, for a name to be approved for the incorporation of a new company, it must be both unique and desirable. In this article, we take a detailed look at both those conditions and other aspects to keep in mind while choosing a name for your new venture.
The proposed name should NOT be identical with another existing name
A proposed name for a company should not be identical to that of an existing company or limited liability partnership name. To determine is a name is identical to that of an existing company, the following tests are applied:
Plural Version: Plural version of any of the words appearing in the name of an existing company doesn’t make a name unique.
Example: If a company exists with a name, “Acme Gear Private Limited Company”, then the name “Acme Gears Private Limited Company” will not be allowed as the proposed name is just a plural version of an existing name.
Type, Letter Case, Spacing or Punctuation marks: Changes to type, case of letters, the spacing between letters and punctuation marks do not make a name unique.
Example: If a company exists with a name, “Acme Gear Private Limited Company”, then the names “ACME Gear Private Limited Company” or “AcmeGear Pvt. Ltd Company” or “Acme-Gear Private Limited Company” will not be allowed.
Joining words or separating words: Joining word or separating the words does not make a name unique.
Example: If a company exists with a name, “Acme Gear Private Limited Company”, then the names “AC ME Gear Private Limited Company” or “ACMEGEAR Private Limited Company” will not be allowed.
Different tense or a number of the same word: The use of a different tense or number of the same word does not make a name unique.
Example: If a company exists with a name, “Acme One Gear Private Limited Company”, then the names “Acme’s One Gear Private Limited Company” or “Acme 1 Gear Private Limited Company” will not be allowed.
Different phonetic spellings or spelling variations: The use of Different phonetic spellings or spelling variations does not make a name unique.
Example: If a company exists with a name, “P.Q. Industries Limited”, then “P and Q Industries Limited” or “Pee Que Industries Limited” or “P n Q Industries Limited or “P & Q Industries Limited” will not be allowed.
Intentionally misspelt words: If intentionally misspelt words are used as a name for a company, it shall be checked with properly checked words.
Example: If a company exists with a name, “Fast Movies Limited”, then the name “Faast Movies Limited” will not be allowed.
Addition of internet related designation: The addition of interned related designation such as .com, .net, .edu, .gov, .org, .in does not make a name unique.
Example: If a company exists with a name, “Fast Movies Limited”, then the name “FastMovies.com Limited” or “FastMovies Dot Com Limited” will not be allowed.
Addition of common names or titles: Addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc. does not make a name unique.
Example: If a company exists with a name, “Fast Movies Limited”, then the name “New Fast Movies Limited” or “The Fast Movies Limited” will not be allowed.
Addition of name of the place: Addition only to the extent of adding the name of the place will not make a name unique. Such names may also be allowed if no objection from the existing company by way of Board resolution is submitted.
Example: If a company exists with a name, “Fast Movies Limited”, then the name “Fast Movies India Limited” will not be allowed.
Different combination of the same words: Different combination of the same words does not make a name unique.
Example: If a company exists with a name, “Builders and Contractors Limited”, then the name “Contractors and Builders Limited” will not be allowed.
Translation of a word: If the proposed name is the Hindi or English translation or transliteration of the name of an existing company or limited liability partnership, then the name will not be allowed.
Proposed name should NOT be undesirable
The proposed name of the company should not be undesirable. A name is considered undesirable if it violates one of the conditions below:
Violates Emblems and Name Act: The proposed name should not violate section 3 of the Emblems Act 1950.
Violates Trademark: The proposed name should not violate the name of a registered trademark or a trademark which is subject of an eight application for registration unless the consent of the owner or applicant for registration is obtained.
Includes offensive words: The proposed name should not contain any word or words which are offensive to any section of the people.
Other conditions for name approval
The name should be in consonance with the principal object: The proposed name should be in consonance with the principal object of the company set out in the memorandum of association.
Companies engaged in financial activities: If the Company’s main business is financing, leasing, chit fund, investments, securities or a combination thereof, then a name indicative of such related financial activities, viz., Chit Fund/ Investment/ Loan, etc. should be a part of the name.
Names indicative of business constitution not allowed: If any part of the proposed name 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. then the name will NOT be allowed.
Name that include British India: Any name that contains the word “British India” will not be allowed.
Association with embassy or consulate or foreign government: If a proposed name implies association or connection with embassy or consulate or a foreign government, then the name will not be allowed.
Names implying patronage: If a proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in Government, then that name will not be allowed.
Vague or abbreviated name: Vague or an abbreviated name such as ‘ABC limited’ or ‘23K limited’ or ‘DJMO’ Ltd or abbreviated name based on the name of the promoters will not be allowed.
Example:- BMCD Limited representing the first alphabet of the name of the promoter like Bharat, Mahesh, Chandan and David will not be allowed.
Names identical to a company dissolved as a result of liquidation: If the proposed name is identical to the name of a company, then it is dissolved as a result of a liquidation proceeding. Then two years must have elapsed from the date of such dissolution for the name to be used again.
Names identical to a company which is struck off: If the proposed name is identical to the name of a company which in pursuance of action under section 248 of the Act was struck off, then the same shall not be allowed before the expiry of twenty years from the publication in the Official Gazette being so struck off.
Names similar to Limited Liability Partnership: A name will not be allowed if it is identical with or too nearly resembles the name of an existing limited liability partnership or 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.
Names that require Regulator approval: If the proposed name includes words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., then a declaration must be 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.
Names that include the word “State”: The word “State” will only be allowed in the case of a government company.
Generic names will not be allowed: Names that only contain generic words like the name of a continent, country, state, cities such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited or the name is a general one, like Cotton Textile Mills Ltd. or Silk Manufacturing Ltd. will not be allowed.
Name that include another country name: If a proposed name includes the name of any foreign country or any city in a foreign country, the same shall be allowed only if the applicant produces any proof of the significance of business relations with such foreign country like MOU with a company of such country. No company can incorporate using the name of an enemy country.
Names that require Central Government approval: Any name that includes any word in the following list will require approval from the Central Government. Board, Commission, Authority, Undertaking, National, Union, Central, Federal, Republic, President, Rashtrapati, Small Scale Industries, Khadi and Village Industries Corporation, Financial, forest, Municipal, Panchayat, Development Authority, Prime Minister or Chief Minister, Minister, Nation, Forest corporation, Development Scheme, Statute or Statutory, Court or Judiciary, Governor, Development Scheme or the use of word Scheme with the name of Government (s), State, India, Bharat or any government authority or in any manner resembling with the schemes launched by Central, state or local governments and authorities.
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