In the process of new company incorporation, the first and significant step is to select a name that is unique and which will give recognition to the company. A unique name of company must be reserved with Ministry of Corporate Affairs (MCA). Rule 8 of Companies Incorporation Rules 2014 provides name approval/availability guidelines as per Companies Act 2013 while selecting the names for companies. In this article we have discussed all about “MCA naming guidelines”.
The Name Of A Company Should Be:
Contain a noun and an activity word that reflects its objectives.
Be in line with Company Name Guidelines issued by Ministry of Corporate Affairs.
What Kind Of Company Name Should Be Avoided?
The Company Name should not be:
Be same, similar, identical or resembling to the name of an existing Company or LLP registered. Phonetically similar names are also to be avoided.
Be similar to a registered trade mark or a trade mark for which an application has already been filed.
The name chosen should not constitute an offense under any law and should not be undesirable in the opinion of the Central Government.
The company name should not have any word or expression which is likely to give the impression that the company is in any way connected to the government central or state or any other local authority when it is actually not unless the approval from the respective government authority has been attained.
If a company’s name indicates any activities relating to financing, leasing, chit-fund, investment, securities etc., though the company’s business activity is not related to any of such activities than such names shall not be allowed.
Any descriptive name, wherein the name contains any commonly used words that describe any business activity.
Things You Should Keep In Mind For Company Name Reservation
The application for the company name reservation shall be applied in Part A of SPICe + form. Once the MCA approves the name, the MCA will reserve the name for 20 days and in those 20 days the applicant needs to submit the remaining documents and complete the Company Incorporation process.
The applicant must file the form for incorporation within such period otherwise the name will expire and the new name application will have to be filed with an additional fee.
Extension of reservation of company name
In notification dated 24th December, 2020, the MCA has notified that now the MCA will provide extension of reservation of name in certain cases. Under the rule Registrar shall extend the period of a name reserved under rule 9 up to 60 days on Payment of Fees. The rules for the extension of the reservation of name in certain case have been specified as under:
Upon payment of fees provided below through the web service available at www.mca.gov.in, the Registrar shall extend the period of a name reserved under rule 9 by using web service SPICe+.
Word Or Expression Which Can Be Used Only After Obtaining Previous Approval Of The Central Government
According to MCA name availability guidelines, 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 unless the previous approval of the Central Government has been obtained for the use of any such word or expression:
Small Scale Industries;
Khadi and Village Industries Corporation;
Financial Corporation and the like;
Prime Minister or Chief Minister;
Statute or Statutory;
Court or Judiciary;
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 Bureau.
In cases where a company gets registered with a name in violation of the above broad principles, the ROC may insist on a change of name or can strike down the company and impose a penalty of up to Rs. 1 Lac. Hence, selecting a name for the company is a crucial task as it not only has to be the unique but also shall comply with the MCA name availability guidelines (MCA naming guidelines). It is always advisable that you take the help of Professional while selecting a suitable name for your company which does not break any law.