Here is a brief legal guide to keep handy while selecting a name for your company in India.
One of the first and very important things one has to do with respect to starting a company is finding a suitable name. While it is important to be creative and take into account market research and economic and strategic factors while deciding the name, something that people often overlook is the law. There are two reasons why you need to understand the law with respect to naming your company – firstly, because while registering a Company or LLP you need to register the name with Registrar of Companies, and secondly because you need to protect the name as a trademark. A trademarked name is something that only one business or individual can enjoy – if someone else has already registered it – you can not use it at all. If you do start a business with the same name by mistake, you may be taken to court and made to pay compensation apart from being forced to discontinue using that name. That’s potentially damaging in terms of business because your clients/customers know you by a name – changing it can confuse them, and in an online market – makes you difficult to find. Also, if you can not register a trademark yourself, that opens you up to unfair exploitation by others who may use the same name and get a free ride on your good will – or make a bad name for you if they are providing unsatisfactory services or products.
However, how to trademark a name is a different issue which I am not covering here – you can learn about that over here. This present post is going to tell you how to get a name registered with Registrar of Companies and what do you need to do for that.
Section 20 of the Companies Act, 1956 states that no company should be registered with an undesirable name. A name is considered to be undesirable if it is identical with or too nearly resembling with name of a company in existence or a registered trade-mark or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999. Once the new rules made by Ministry of Corporate Affairs (MCA) is given effect to, before applying for registration of a company, one would be required to search on the MCA website for similar names before and be sure that the proposed name is unique before applying. You can do that on this link. Then you need to do a trademark search which you can do here.
At this point you also need to identify the classes in which your services or products belong. Here is a handy list to determine that.
Your name must be different from names of existing companies:
Remember that names are not distinguished with prefixes/suffixes, tense changes or adding words like ‘The’ or ‘and’ or ‘co’ or ‘industries’ which are generic. The keyword(s) in the name must be substantially different.
Even a different spelling of word does not work as long as the sound is the same. If a there is a company named Intelligent Pvt Ltd, you can not name your new company Intelizent Pvt Ltd or The Intelizent Pvt Ltd.
The following are to be disregarded when considering whether the proposed name of a company is similar to one already in existence or not –
• 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 does not make the name distinguishable
• The use of a different tense or number of the same meaning (eg Chaar & Four or 3 & three)
• Using different phonetic spellings or spelling variations does not distinguish one name from another
• The addition of an internet related designation, such as .COM, .NET, .EDU,.GOV, .ORG, .IN. even if “.” Is written as “dot”
• addition of words to a name used by another company is not permissible
The following are permissible provided no objection by way of Board resolution of the existing company is received:
• Different combination of the same words
• Exact Hindi translation of the name of an existing company in English Also, the following are to be observed:
If the proposed name resembles that of a company in liquidation, the name shall not be allowed for 2 years after dissolution
• In case a company is liquidated under Section 560 of the Companies Act, 1956 a similar name cannot be registered until 20 years have passed after liquidation.
Name must not suggest a connection with Government or international Institutions
Next you should also ensure that the name does not contain (or imitates or somehow conveys that there is a connection with) any of the following mentioned in the schedule of Emblems and Names (Prevention of Improper Use) Act, 1950.
Here is the list you need to check with: United Nations Organisation, World Health Organisation, The Indian National Flag, the Government of India or any State, a Department of any such Government, St. John Ambulance Association (India), the president, governor (sardar-I-Riyasat) or Republic or Union of India, any name which may suggest or be calculated to suggest the patronage of the Government of India or the Government of a State; or connection with any local authority or any corporation or body constituted by the Government, Mahatma Gandhi, Pt. Jawaharlal Nehru, Shrimati Indira Gandhi, Chhatrapati Shivaji or the Prime Minister of India or the words Gandhi, Nehru or Shivaji, International Civil Aviation Organisation, Interpol, International Criminal Police Organisation, World Meteorological Organisation, Tuberculosis Association of India, International Atomic Energy Agency, Ashoka Chakra, Dharma Chakra, the name of the Parliament or the legislature of any State, or the Supreme Court, or the High Court of any State, or the Central Secretariat, or the Secretariat of any State Government or any other Government office, Ramakrishna Math and Mission, Sri Sarada Math and Ramakrishna Sarada Mission, Bharat Scouts and Guides, International Olympic Committee, National Youth, Auroville, The name of Sri Sathya Sai Central Trust, Sri Sathya Sai, National Human Rights Commission.
Hopefully, once you find that you have used none of the above with reference to the name, also give a thought as to whether the proposed name could be offensive to any section of people, whether it contains any profanity or words or phrases that are generally considered a slur against any ethnic group, religion, gender or heredity.
Check the following table at the end of the post as well, to be sure that if you want to use some of the common words in the list as a part of your name, whether you have sufficient authorized capital. Remember that authorized capital is not same as paid-up capital, which is the actual capital raised by a company.
Also, It is not only one name that you can choose. You need to provide to the Registrar on the e-form no less than six different names in order of preference, and the names should be indicative of the main objects of the company.
All of the above applies to naming an LLP as well.
|Key Words in the Name of a company and Authorised Capital Required (INR)||
|(1) Corporation – 5 crores|
|(2) International, Globe, Global, Universal, Universe, Continental, Inter-Continental, Asiatic, Asia, Asian, World being the first word of the name – 1 crore|
|(3) If any of the key words at (2) above is used within the name (with or without brackets) or Hindustan, Hindustani, Hindustanee, India, Indian, Bharat,Bhrarati, Bharatiya, Bharateeya, being the first word of the name – 50 lakhs|
|(4) Hindustan,Hindustani, Hindustanee, India,Indian, Bharat,Bhrarati, Bharatiya, Bharateeya is used within the name (with or without brackets) – 5 lakhs|
|(5) Industries, Udyog, Industrial, Industry – 1 crore|
|(6) Enterprises, Enterprise, Products, Product, Business, Manufacturing, Manufacture – 10 lakhs|
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