MCA Guidelines for Company Name
MCA Guidelines for Company Name
Registering a business starts with selecting an appropriate name, a process governed by specific guidelines from the Ministry of Corporate Affairs (MCA). You must choose a name that is unique and clearly distinguishable from existing companies within the same industry. After settling on a suitable name, apply through Part A of the SPICe+ form. Once the MCA approves, the name is reserved for 20 days, during which you must submit all necessary documents to finalize the registration.
Selecting a company name is a pivotal step in forming a business. To ensure compliance, familiarize yourself with Rule 8 of the Companies Incorporation Rules 2014, which details the standards for name approval and availability under the Companies Act 2013. This article provides a comprehensive guide to MCA naming standards for companies in India, offering everything you need to know to navigate the process. Continue reading for more insights!
Choosing a Business Name
Selecting a suitable name is one of the first critical steps when launching a new business. It serves as your enterprise’s primary identifier and should be distinct in spelling and phonetically to stand out effectively.
MCA Guidelines for Company Name
Registering a company in India requires selecting a unique name that aligns with specific guidelines. The chosen name for your company must conform to the Ministry of Corporate Affairs (MCA) naming guidelines for Private Limited Companies, LLP and OPC. Failure to adhere to these guidelines means the proposed name will not be approved.
- The MCA requires that your chosen company name adheres to the legal restrictions outlined in Section 4(2) & (3) of the Companies Act, 2013, and Rule 8 of the Companies (Incorporation) Rules, 2014.
- Prior to submitting a name for approval, it’s crucial to thoroughly review these regulations and conduct a trademark search to ensure that the name does not infringe on any existing trademarks.
- Failure to comply with these guidelines can result in the rejection of your name application.
Prohibited Elements in Company Names According to MCA Guidelines
The Ministry of Corporate Affairs (MCA) sets specific restrictions on what can be included in the names of Private Limited Companies. Here are several key prohibitions under these guidelines:
- Obscenity: Names containing obscene content are not permitted.
- Vulgarity: The use of vulgar words in company names is strictly forbidden.
- Offensiveness: Offensive language is not allowed in company names.
- Compliance with the Names and Emblems Act, 1956: The name must adhere to section 3 of this act, which prevents misuse of names and emblems similar to official symbols.
- Government Patronage: The company name must not suggest any central or state government patronage without approval.
- Uniqueness: The name should not be identical or too similar to the names of existing companies or LLPs.
- Undesirable Words: As per rule 8 of the Company Incorporation Rules of 2009, certain words deemed undesirable cannot be included.
- Trademark Compliance: The name must also comply with section 4 of the Trademark Act of 1999 to avoid trademark infringement.
Adhering to these guidelines ensures that the chosen company name is appropriate and legally compliant.
Section 4: Statutory Provisions for Company Naming
Section 4 of the Companies Act 2013 provides comprehensive guidelines for naming companies in India, outlining the fundamental principles that must be followed when selecting a name for a new company. Detailed within Rule 8, under Section 4, are the specific dos and don’ts related to this process. According to these guidelines, the name stated in the company’s Memorandum of Association (MOA) should:
Mandatory Suffix of Company Name
When naming your business in India, follow these straightforward guidelines based on your entity type:
- Private Limited Companies should have “Private Limited” at the end of their names.
- One-person companies (OPC) must include “OPC Private Limited” in their names.
- Limited Liability Partnerships (LLP) should conclude with “LLP.”
- Section 8 Companies aimed at non-profit goals typically use terms like “Trust,” “Society,” or “Council” in their names.
- Public Limited Companies must end their names with “Limited.”
- Producer Companies focused on agricultural activities should use “Producer Company Limited” at the end of their names.
- Uniqueness: The name must not be identical to any company already registered.
- No Resemblance: The name should not closely resemble the names of existing companies to avoid confusion.
- Legal Compliance: The name must not violate any existing laws.
- Government Approval: The name should not be considered undesirable from the perspective of the Central Government.
No Government Implication
The name should not resemble any government authority or imply any association with the government.
Approval Requirement
The name can only be used after the Government of India has approved it.
Rule 8 of the Companies Incorporation Rules, 2014
Rule 8 of the Companies (Incorporation) Rules, 2014 provides detailed criteria to avoid confusion and ensure the uniqueness of company names within the framework of the MCA naming guidelines for Companies. Here’s a breakdown of the restrictions outlined in Rule 8:
Identical or Similar Names
- Avoiding Resemblance: Names too similar to existing company names are not permitted. Names are considered identical or similar even if differences are only in:
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- Legal status indicators (e.g., Pvt, Ltd, LLP).
- Grammatical variations (singular/plural forms).
- Case of letters (upper or lower case).
- Use of definite and indefinite articles.
- Tense or numbers.
- Special characters or domain extensions.
- Spelling and grammar variations.
- Complete translations in Hindi or English.
- Minor Alterations: Making minor changes to an existing name, such as using the plural form or changing the type, case of letters, spacing, punctuation, or special characters, is not acceptable. These changes are seen as insufficient to distinguish new names from existing ones.
- Distinct legal statuses (such as Pvt Ltd vs. LLP) with otherwise identical names can be considered different if a No Objection Certificate is issued by the company with the existing name.
List of Undesirable Words (Rule 8A)
Rule 8A of the Companies (Incorporation) Rules, 2014 outlines specific restrictions on using certain words and phrases in the names of Companies as per MCA naming guidelines. Here are key points regarding undesirable terms in company names.
Names considered undesirable include those that:
- Are obscene, vulgar, or offensive
- Are prohibited under Section 3 of the Names and Emblems Act, 1950.
- Are already registered as trademarks under the Trademarks Act of 1999.
- Resemble the name or abbreviation of an existing or foreign company reserved in India.
- Suggest connections with foreign embassies, consulates, or governments.
- Imply government patronage or are associated with national or international personalities.
- These are identical to the names of companies dissolved within the last two years due to liquidation.
- It solely consists of the name of a country, continent, state, or city.
Words Requiring Government Approval:
Use of certain words in the company name requires prior approval from the Central Government, including:
- Board, Federal, Municipal, Forest Corporation, Commission, Republic.
- Panchayat, Development Scheme, Authority, President, Development Authority.
- Statute/Statutory, Undertaking, Rashtrapati, Prime Minister, Court/Judiciary.
- National, Small Scale Industries, Chief Minister, Governor, Union.
- Khadi and Village Corporation, Minister, and any scheme name indicate government affiliation (e.g., State, Bharat, Indian).
- Central, Financial Corporation, Nation, or any schemes launched by the Central or State Government.
Additional Naming Conditions:
- The company’s name should reflect its business activity, especially critical for those in specific sectors like finance.
- Names differing only by the addition of a place name are considered invalid.
- Names of companies struck off under section 560 of the Companies Act 1956 are unavailable for 20 years from the date of striking off.
These comprehensive guidelines ensure that company names are not unique and lawful but also align with public sensibilities and regulatory standards.
Guidelines on Similar Names for Companies
Variations involving common expressions or minor spelling changes may not qualify as sufficiently distinct when selecting a company name. Here are some important considerations:
- Minor Variations: Using different expressions or slight alterations in the spelling of an existing company name is generally insufficient to distinguish a new name.
- Abbreviated Names: While subsidiaries may use initials or abbreviated forms of names, joint ventures must use more descriptive, expanded names unless specifically permitted.
- No-Objection Certificates: If a company name includes personal names, the individuals named must provide a no-Objection certificate (NOC). Additionally, proof of a relationship with these individuals must be provided to use their names.
Additional Naming Guidelines for Companies
Here are some further rules related to naming practices for companies that ensure alignment between a company’s name and its business activities:
- Activity-Based Name Changes: If a company changes its core business activities, it must update its name to reflect the new activities within six months. This helps maintain transparency and relevance in the company’s identity.
- Declaration of Previous Usage: Companies must declare if the proposed name has been used in any other business entity within the past five years. This declaration is essential to avoid reusing names that might carry historical baggage or cause confusion.
- Specific Nomenclature Requirements: Companies operating under certain categories, like Section 8 (non-profit) and Nidhi (mutual benefit) companies, must include specific words in their names that accurately describe their legal nature and type of activities.
- Restrictions Post Name Change: Companies that have changed their names are prohibited from reverting to their old names for three years. This rule prevents confusion and helps stakeholders adapt to the new name.
Guidelines for Company Names Under the Trademark Act, 1999
When selecting a name, brand, or logo for your company, it’s crucial to consider the implications of trademark law. Here’s a concise overview of the key points:
- Trademark Definition: A trademark can be a word, business name, logo, or other device that identifies the origin of goods or services and distinguishes them from others.
- Protection Under Law: Trademark law protects the legal rights of the trademark owner against unauthorized use. Infringement can lead to significant penalties, as Indian courts are known to enforce these laws strictly.
- Trademark Search: Before finalizing a company name, it is advisable to conduct a trademark search to ensure the name is not already registered or pending registration under the Trademark Act. IndiaFilings offers a free trademark search facility that can be utilized for this purpose across India.
- Rule 8 Compliance: According to Rule 8 of the Company Incorporation Rules 2009, a name is considered undesirable if it includes words that are already registered or pending registration as a trademark. A name involving such a trademark can only be used if the trademark owner provides a No Objection Certificate (NOC).
By adhering to these guidelines, you can avoid potential legal issues and ensure that your company name is both compliant and capable of establishing its unique identity in the marketplace.
Company Name Search
Before initiating the company name approval process, it is essential to conduct a thorough company name search to ensure your desired name is not already taken or too similar to existing ones. This can be done through the Ministry of Corporate Affairs (MCA) website, which offers an online tool for searching existing company names and trademarks. Inputting your proposed name will reveal any existing companies or LLPs with the same or a closely similar name.
IndiaFilings provides a useful tool for searching company names, helping you ensure that your desired name is unique and legally compliant.
Process for Company Name Approval and Reservation in India
The process of securing approval and reservation for a company name in India is a critical step that ensures the chosen name complies with all legal guidelines and is reserved exclusively for your company’s use. Here’s a detailed guide on how to proceed with this process:
Filing the Application
- After selecting a company name by adhering to the regulatory guidelines, an application must be filed with the ROC along with the necessary application fees.
- Application Forms: Depending on the status of the company (existing or new), the application can be made through different forms:
- RUN (Reserve Unique Name) Form: Used by existing companies or LLPs to reserve a new name.
- SPICe Plus (INC-32) Form: Used by new companies for name approval and incorporation.
- FiLLiP Form: Used by new LLPs for name approval and incorporation.
Digital Approval Process
The entire name approval and reservation process has been digitalized, making it quick, easy, and cost-effective. The MCA website offers an auto-search facility to check the validity and availability of proposed names.
Procedure Details
RUN Form: This web-based application allows existing companies or LLPs to propose two names, with two resubmit opportunities if the initial proposals are rejected. The application fee is INR 1,000 for companies and INR 200 for LLPs. If approved, the name is reserved for 20 days.
- SPICe Plus Part A: For new companies, this form can be filed separately or with the incorporation application. The fee for Part A is INR 1,000, and it also allows for proposing two names with one chance of resubmission.
- FiLLiP Form: This integrated form for LLPs includes provisions for name approval and is priced based on the authorized capital of the LLP.
Timeframe and Validity
The approval process typically takes 2-3 working days. Once a name is approved, the reservation is valid for 20 days from the date of the approval letter, during which time the company or LLP must be formally incorporated.
Name Reservation
If a name is approved, the ROC issues a Name Approval Letter. The application is rejected if the proposed names fail even after resubmissions, and a new application must be submitted with alternative names.
By following these steps, businesses can ensure their chosen name complies with the legal requirements and is secured for their exclusive use within the stipulated timeframe.
Conclusion
In conclusion, navigating the complex landscape of company name registration in India demands a thorough understanding of the Ministry of Corporate Affairs (MCA) guidelines. As outlined in the Companies Act of 2013 and the Companies (Incorporation) Rules of 2014, choosing a legally compliant and distinctive name is fundamental for successfully incorporating and branding your business. Compliance with these guidelines ensures not only the approval of the chosen name but also protects businesses from potential legal disputes related to trademarks and naming rights.
IndiaFilings can assist you with the company name reservation process, ensuring your chosen name complies with legal requirements and is successfully registered.
