Private Limited Company Name Approval
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Private Limited Company Name Approval
Choosing a right name for the business is one of the first most important and hardest part for a startup. As the name of the business will be your primary calling card and will show up in every place associated with the business. Therefore, it is important to come up with a name that creates a positive first impression, intriguing and clear. In this article we look at some of the regulations laid down by the Ministry of Corporate Affairs(MCA) for naming of a Private Limited Company in India.
Name should be desirable
As per the Companies Act, 2013, no company is to be registered with an undesirable name. A proposed name for a private limited company is considered to be undesirable if it is identical with or closely resembling with a name of a company in existence or approved by the Registrar, name of a LLP in existence or approved by the Registrar and/or resembles a registered trade-mark or trade-mark application. Further, names that are in violation of the provisions of Emblems and Names and/or names that contain profanity or words or phrases that are generally offensive to any section of people are also deemed undesirable and not allowed.
Test for Similarity
In determining if a name is similar or identical to another name, the following rules shall apply: i) Plural version of a word does not distinguish one name from another. Therefore, City Hospital Private Limited and City Hospitals Private Limited will be considered similar. ii) Changing type / case / spacing between letters appearing in the name will still make the name similar. Therefore, City Hospital Private Limited and CityHospital Private Limited or City hospital Private Limited will be considered similar. Use of different tense or number of the same word will also not make a name unique. For instance, Excellence Industries and Excellent Industries will be considered similar. Similarly, Three River Hospital and 3 River Hospital will also be considered similar. Further, different phonetic spellings or different combination of the same word will not make it distinguishable from an existing name. Hence, if J.K Industries is existing, J & K Industries and J n K Industries will also not be allowed. Likewise, inclusion of words such as New, Modern, Nav, Shri, Shree, Om, Jai, Sai, The, etc., in front of an existing name will not make the name unique.
Names that require approval from other authorities
If the proposed name includes words such as ‘insurance, ‘bank’, ‘stock exchange’, ‘venture capital’, ‘asset management’, ‘mutual fund’, etc., the name may be allowed with a declaration by the applicant that the requirements mandated by the respective regulator such as IRDA, RBI, SEMA, etc., has been complied with by the applicant. Also, 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 then the previous approval of Central Government has to been obtained.
Requirement of minimum authorized capital for certain names
Inclusion of certain keywords in the name will require the company to have a certain minimum authorized capital as under: For using the word Hindustan, India, Bharat in any part of the name of the company, a minimum authorized capital of Rs.5 lakhs is required. For using the words Enterprises, Products, Business, Manufacturing in any part of the name of the company, a minimum authorized capital of Rs.10 lakhs is required. For using the words Hindustan, India, Bharat as the first word of the company name a minimum authorized capital of Rs.50 lakhs is required. If the words International, Global, Universal, Continental, Inter-Continental, Asiatic, Asia is used within the name of the company, a minimum authorized capital of Rs. 50 lakhs is required. If the words Hindustan, India Bharat is being used as the first word of the name then a minimum authorized capital of Rs. 50 lakhs is required. For using the words Industries / Udhyog in any part of the name or for using the words International, Globe, Universal, Continental, Inter-Continental, Asiatic, Asia as the first word of the name, a minimum authorized capital of Rs. 1 crore is required. For using the word Corporation in the name of the company, a minimum authorized capital of Rs. 5 crores is required.