Name approval guidelines for companies under companies act, 2013

In old Companies Act, 1956 Ministry had issued name availability guidelines by way of (Companies (Name Availability) Rules, updated in 2011). In the new Companies Act, 2013 name availability guidelines for Company are given under Rule 8 of the Companies (Incorporation) Rules, 2014.  Given below are precautions that must be kept in mind while applying for the proposed Name of a Company.

FIRST PRECAUTION [1]:

The name of the Company should END with

• - the last word “Limited” in the case of a public limited Company, or
• - the last words “Private Limited” in the case of a private limited Company

Section-8 Company and Government [2]Company is not  required to mention Limited or Private Limited in its name.

SECOND PRECAUTION:

Proposed name should NOT be identical with another existing name

Meaning of word Identical:

• Similar or alike in every way:
  e.g. the two cars are identical except for their license plates.
• Being the very same; self same :e.g. this is the identical room we stayed in last year.

Synonyms Expand: Congruous, Congruent, Equal, Matching.

[Antonyms] Trying using the identical tech

THIRD PRECAUTION: The name shall be considered undesirable, if;

I. It attracts the provisions of section 3 of the [3]Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950)

II. It includes the name of a registered trade mark or a trade mark which is subject of an application for registration

EXCEPT:

If Proposed name includes the name of a registered trade mark or a trade mark which is subject of an application for registration, Then for approval of proposed name CONSENT of the owner or applicant for registration as the case may be, shall be required to be obtained and produced by the promoters.

III. It includes any word or words which are Offensive to any section of the people. e.g., proposed name does not contain profanity or words or phrases that are generally considered a slur against an ethnic group, religion, gender or heredity

FOURTH PRECAUTION:

The following words and combinations thereof shall not be used in the name of a Company in English or any of the languages depicting the same meaning.

NOTE:

For using the below given name, the previous approval of the Central Government[4] required to obtained.

• Board;                                           
• Commission;                               
• Authority;
• Undertaking;                               
• National;                                      
• Union;
• Central;                                        
• Federal;                                        
• Republic;
• President;                                     
• Rashtrapati;                                 
• Municipal             
• Small Scale Industries;              
• Panchayat;                                  
• Minister;
• Nation;                                       
• Forest corporation;                      
• Governor;
• Statute or Statutory;                    
• Court or Judiciary;                      
• Bureau
• Development Scheme;                           
• Khadi and Village Industries Corporation;
• Financial, Corporation and the like;            
• Prime Minister or Chief Minister;  
• Development Authority;

(aa) 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; and

NOTE:

As per condition no. 4 (Four) it is clear that use of the word INDIA/ Name of State, Bharat in name of the company is not restricted .

FIFTH PRECAUTION: A Company can be incorporated with the name in earlier use  in any other business constitution like Sole proprietor or Partnership or any other incorporated or unincorporated entity by the promoter.

The applicant shall declare in affirmative or negative, whether they are using or have been using that name  for the last five years, the name applied for incorporation of Company or LLP in any other business constitution like Sole proprietor or Partnership or any other incorporated or unincorporated entity.

IF, YES details thereof and No Objection Certificate from other partners and associates for use of such name by the proposed Company or LLP, as the case may be, and, Also a declaration as to whether such other business shall be taken over by the proposed Company or LLP or not.

SIXTH PRECAUTION:

I. Use of the name of a Foreign Country:

If The proposed name includes name of any foreign country or any city in a foreign country, the same shall be allowed if the applicant produces any proof of significance of business relations with such foreign country like Memorandum of Understanding with a Company of such country.

II. Commodity Exchange:

Ministry of Corporate affairs issued a circular with regard to use of word “Commodity Exchange” vide “Circular 26/2014” dated 27th June, 2014.

Use of the word “Commodity Exchange” may be allowed only where a ‘No Objection Certificate’ from the forward Markets (FMC) is furnished by the applicant.

III. ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund :

Use of the word “Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund” may be allowed only where a declaration is 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.

IV. Name of continent, country, state, city only :

The proposed name can’t contain only the name of a continent, country, state, and city. E.g. such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited.

V. Identical with or too nearly resembles the name of a Company incorporated outside India:

The proposed name should not be identical with or too nearly resembles the name of a Company or limited liability partnership incorporated outside India and reserved by such Company or limited liability partnership with the Registrar.

EXCEPT:

A foreign Company is incorporating its subsidiary Company in India,then the original name of the holding Company as it is may be allowed with the addition of word India or name of any Indian state or city, if otherwise available

VI. Name include financing, leasing, chit fund, investments, securities:

If main business of proposed Company is financing, leasing, chit fund, investments, securities or combination there of, the name of Company should be indicative of such related financial activities.

VII. Change in Name of Company:

The names released on change of name by any company shall remain in data base and shall not be allowed to be taken by any other company including the group company of the company who has changed the name for a period of three years from the date of change subject to specific direction from the competent authority in the course of compromise, arrangement and amalgamation.

MANDATORY WORDS FOR SECTION 8 COMPANY:

The name shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc.

MANDATORY WORDS FOR NIDHI COMPANY:

Every Company incorporated as a “Nidhi” shall have the last word ‘Nidhi Limited’ as part of its name

MAJOR AMENDMENT 

The Ministry of Corporate Affairs (MCA), vide notification dated January 22, 2016, issued the Companies (Incorporation) Amendment Rules, 2016, wherein rule 8, rule 9 and rule 36 of Companies (Incorporation) Rules, 2014 (hereinafter referred to as the principal rules), have been amended.

Name in line with Activity:

Earlier before this amendment Name of the Company name of the Company should be in consonance with the principle objects of the Company, but situation after amendment is different after amendment provisions are as follow:

Omissions:

i. The name which is not in consonance with the principal objects of the company as set out in the memorandum of association.

ii. If any company has changed its activities, which are not reflected in its name, shall not be required to change its name in line with its activities.

iii. The name which is intended or likely to produce a misleading impression regarding the scope or scale of its activities which would be beyond the resources at its disposal.

Effects:

i. No need to reflect the object of Company in Name of the Company.

ii. No need to change the name of the Company while altering the activity of the Company.

Name in line with Name of Promoter:

Earlier Abbreviation of name of promoters was not allowed to apply for the name and if name include the name of the person other then promoter then NOC was required or name include the name of the relative then relationship proof was required. but situation after amendment is different, after amendment provisions are as follow:

Omissions:

i.  The proposed name is vague or an abbreviated name such as 'ABC limited' or '23K limited' or abbreviated name based on the name of the promoters;

ii. If the keyword used in the name proposed was the name of a person other than the name(s) of the promoters or their close blood relatives, No objection from such other person(s) was required with the application for name. Also, in case the proposed name included the name of relatives, proof of relation was required to be furnished, along with the significance and proof thereof for use of coined words made out of the name of the promoters or their relatives

Effects:

 i. Company can be incorporate with the abbreviated word of the name of the promoters.

ii. The obstructions of using the name of persons other than promoters or their close blood relatives has been removed. Now there is no requirement of furnishing proof of relationship for the as the name of the company.

KEY POINTS:

[1] This Clause is not applicable to  Section 8 Company and Government Company.

[2] For the Government Companies,   the last word “Limited” in the case of a public limited company, or the last words “Private Limited” in the case of a private limited company shall be omitted.( notification No. G.S.R. 463(E) dated 5th June, 2015)

[3]Prohibition of improper use of certain emblems and names. -Notwithstanding anything contained in any law for the time being in force, no person shall, except in such cases and under such conditions as may be prescribed by the Central Government use, or continue to use, for the purpose of any trade, business, calling or profession, or in the title of any patent, or in any trade mark or design, any name or emblem specified in the Schedule or, any colorable imitation thereof without the previous permission of the Central Government or of such officer of Government as may be authorized in this behalf by the Central Government

[4] Power of Central Government delegated to Regional Director