MCA Restricted Words for Company Names in India
MCA Restricted Words for Company Names in India
When establishing a business in India, choosing a name for your company is one of the initial and most crucial steps. This name is not just a label but an identity representing your brand, ethos, and business in the market. However, this process involves more than just a creative exercise. India’s Ministry of Corporate Affairs (MCA) plays a pivotal role in this process, as it has laid down specific guidelines and restrictions regarding company naming. Among these guidelines, the list of MCA Restricted Words is particularly noteworthy. These are words that companies are prohibited from using in their names without specific approval or justification. This article will look into MCA Restricted Words for a Company Name.
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Get Started!The Significance of Choosing the Right Name
- A company name does more than identify your business; it conveys your brand’s personality, values, and the essence of what you offer.
- It’s the first point of interaction with your audience, and as such, it profoundly impacts your brand’s perception.
- A well-chosen name can set the foundation for your brand’s story and marketing efforts.
Meaning of MCA Restricted Words
When registering a company in India, selecting a name and obtaining approval from the Ministry of Corporate Affairs (MCA) is a crucial step. However, the proposed name might be rejected or cancelled if it violates the Company (Incorporation) Rules and guidelines. These guidelines include a list of restricted words that cannot be used in the company’s name.
MCA’s Restricted Words
The table below outlines words that the Ministry of Corporate Affairs (MCA) restricts from being used in company names. Additionally, any terms or phrases with similar meanings in other languages are prohibited from being incorporated into company names.
| Category | MCA-Restricted Words |
| Government Associations | National, Union, Central, Federal, Republic, Rashtrapathi, Statue & Governor |
| Local Government Bodies | Panchayat, Municipal, Court or Judiciary |
| Government-led Initiatives | Small Scale Industry, Development Scheme, Development Authority, Forest Corporation, Khadi and Village Industries Corporation |
| High-Level Government Titles | Prime Minister, Chief Minister, Authority, Undertaking, Minister |
| General Terms Not Allowed | Board, Commission, Bureau, Statue |
Mandatory Suffixes for Company Names
- Suffixes like “Limited” or “Private Limited” are mandatory for company names, indicating their registration type.
- “Limited” should be used at the end of the name for public limited companies.
- “Private Limited” must be included at the end of the name for private limited companies.
- Exceptions to this rule include Section 8 companies and government-owned enterprises, exempt from this naming requirement.
Perspectives on MCA-Restricted Words for Company Names
Unlock the nuances of MCA’s restrictions on company names to ensure compliance and successful registration.
Words Need MCA Approval
If a proposed company name includes terms such as “bank,” “asset management,” “mutual fund,” “insurance,” “venture capital,” etc., it is mandatory to obtain clearance from the relevant regulatory authorities, including the RBI, SEBI, IRDA, and MCA, among others.
Names of Foreign Countries or Cities
A company name that incorporates the name of a foreign city or country is subject to approval only if the company’s promoters can provide evidence of significant business connections with that particular country or city.
Restrictions on Business Organization Terms
Words indicating a different type of corporate entity or legal person, such as “cooperative,” “Trust,” “LLP,” “Partnership,” “Society,” “Proprietor,” “HUF,” “Firm,” “Inc.,” “PLC,” “GmbH,” “SA,” “PTE,” “AG,” etc., are prohibited from being part of any company name.
Use of Illustrative Language
For companies whose primary operations involve financing, leasing, chit funds, investments, securities, or a mix of these, the name must reflect the specific financial activity, such as “Chit Fund,” “Investment,” or “Loan,” to provide clear insight into the nature of the business.
Check Company Name Availability with MCA
When establishing a new company in India, a crucial initial step involves conducting a check name availability MCA process. This is essential to ensure that your chosen company name does not clash with existing entities. The Ministry of Corporate Affairs (MCA) provides an online portal where entrepreneurs can utilize the MCA name check company service. This tool is invaluable for verifying your proposed company name’s uniqueness, helping streamline the registration process and avoid potential legal complications.
IndiaFilings provides a tool for checking company name availability.
Get Started!MCA Name Approval Process for Company and LLP
Before a new company or Limited Liability Partnership (LLP) can be established in India, the proposed name must receive company name approval from the Ministry of Corporate Affairs (MCA). Through the Reserve Unique Name (RUN) Form, promoters can propose up to two names for consideration. It will be approved if one of the suggested names is available and meets the regulatory requirements. However, if the proposed names are not accepted, the promoter will be asked to submit new names for consideration. A common reason for rejecting a proposed company name is the inclusion of prohibited words outlined in the Companies Incorporation Rules, which the MCA enforces.
Also read, Can you buy a company name and not use it?
Common Reasons for Company Name Rejection
Here are some common reasons for the rejection of proposed company names:
- The name does not align with the activities described in the Main Objects.
- The name lacks a suitable prefix.
- Suppose the company is acquiring a partnership firm’s business. In that case, necessary documents such as the Partnership Deed, latest Assessment order, Balance sheet of the past 2 years, and Profit and Loss Account must be provided. Additionally, an affidavit signed by all proposed partners affirming the company’s primary objective to take over the firm’s business and dissolve it is required.
- Certain words, such as “Enterprises,” “Business,” “Industry,” “Udyog,” “Products,” and “Manufacturing,” may be restricted if the company deals in various business activities or is already engaged in multiple business activities. These words cannot be used if the business activity is specific to a trade.
- The proposed company name lacks uniqueness or a distinctive identity.
- The proposed name is not available due to the existence of identical or closely resembling companies.
Conclusion
In India, establishing a company requires the proposed name to be approved by the Ministry of Corporate Affairs (MCA). Failure to comply with the Company (Incorporation) Rules, 2014, can result in the rejection of the proposed name. As highlighted earlier, the MCA imposes restrictions on certain words, and if business owners choose these specific terms, the MCA is likely to deny the approval of the company name.
IndiaFiling experts are here to assist you in selecting an appropriate name for your company. Additionally, you can verify the availability of your desired company name using our MCA Check Company Name Availability tool.
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