Guidelines for name approval of Company in India.

Charu Agarwal

Approval of Name pursuant to Section 4 (2) & 4(4) to be read with Rule 8 & 9 of the Companies (Incorporation) Rules 2014

Issues:

1. How to decide a relevant Name?

2. How to get the decided name approved in one go?

The above two questions have become a major task these days. To get rid of these issues, following steps must be kept in mind:

Solution:

First of all, we must know how to decide a name within the regulatory framework.

1. The name must not be registered under any trademark class. Check on MCA in trademark classes.

2. Such name must not be similar or identical to any existing name as provided under section 4(2) of the Companies Act 2013 read with rule 8 of the Companies (Incorporation) Rules 2014 (Annexure-A).

3. The name shall be able to describe the object of the company.

4. The name must not be undesirable in opinion of Central Government neither be offensive as provided under section 4(2) of the Companies Act 2013.

5. Comply with the criteria provided under Section 4(2) along with rule 8 of the Companies (Incorporation) Rules, 2014.

6. As per provisions of Rule 8 (2) of above said rules the name must not attract the provisions of Section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950) annexed herewith (Annexure –B).

Forms and attachments:

– INC-1 for Reservation/availability of Name as provided under section 4 (4) read with rule 9 of the Companies (Incorporation) Rules 2014 along-with prescribed Fee.

– Details Required:

(a) DIN or PAN of applicant. (Prefer to enter DIN incase applicant is having DIN)

(b) Enter DIN for promoter and Directors (one in case of OPC, Two in case of Private Company, Three in case of Public Company and Five in Case of Producer). Obtain DIN if they are not having DIN

(c) Enter Any SIX NAMES which should be in accordance to the Rules and Regulations.

Attachments:

For Private /Public Company

Not Required

For Producer Company

Separate Document for Main Objects signed by the promoters

List of remaining Subscribers (if any)

Validity of Name

Pursuant to the provisions of Section 4(5) of the Companies Act 2013, the name will be valid for a period of 60 Days from the date on which the application for Reservation was made to the Registrar.

Conclusion:

1. The name must be in conformity with the provisions of Companies Act as well as the section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950.

2. To avoid rejection the Name must indicate the purpose or object of the company, though it is not prescribed in the Act.

3. Any of the directors who is applying for Name or involved in incorporation later, must not be disqualified under the companies Act 2013. This may lead to rejection of a even a valid name.

4. Once the name gets approve, Apply for incorporation within 60 days of such name approval, because after the expiry of this term name will got expire and company cannot be incorporated in such name.

Annexure- A

Pursuant to the provisions of Rule 8 (Undesirable names) of the Companies (Incorporation) Rules 2014:

(1) In determining whether a proposed name is identical with another, the differences on account of the following shall be disregarded-

(a) the words like Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership;

(b) words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.;

(c) plural version of any of the words appearing in the name;

(d) type and case of letters, spacing between letters and punctuation marks;

(e) joining words together or separating the words does not make a name distinguishable from a name that uses the similar, separated or joined words;

(f) use of a different tense or number of the same word does not distinguish one name from another;

(g) using different phonetic spellings or spelling variations shall not be considered as distinguishing one name from another. Illustration (For example, P.Q. Industries limited is existing then P and Q Industries or Pee Que Industries or P n Q Industries or P & Q Industries shall not be allowed and similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also;)

(h) misspelled words, whether intentionally misspelled or not, do not conflict with the similar, properly spelled words;

(i) the addition of an internet related designation, such as .com, .net, .edu, .gov, .org, .in does not make a name distinguishable from another, even where (.) is written as ‘dot’;

(j) the addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc. does not make a name distinguishable from an existing name and similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed; such names may be allowed only if no objection from the existing company by way of Board resolution is submitted;

(k) different combination of the same words does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of “Builders and Contractors Limited”, the name “Contractors and Builders Limited” shall not be allowed unless it is change of name of existing company;

(l) if the proposed name is the Hindi or English translation or transliteration of the name of an existing company or limited liability partnership in English or Hindi, as the case may be.

(2) (a) The name shall be considered undesirable, if-

(i) it attracts the provisions of section 3 of the 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, unless the consent of the owner or applicant for registration, of the trademark, as the case may be, has been obtained and produced by the promoters; Substituted vide  notification dated 27.07.2016,  Companies (Incorporation) Third Amendment Rules, 2016 with following:

it includes the name of a trade mark registered or a trade mark which is subject of an application for registration under the Trade Marks Act, 1999 and the rules framed thereunder unless the consent of the owner or applicant for registration, of the trade mark, as the case may be, has been obtained and produced by the promoters.

(iii) it includes any word or words which are offensive to any section of the people;

(b) The name shall also be considered undesirable, if-

(i) the proposed name is identical with or too nearly resembles the name of a limited liability partnership;

(ii) it is not in consonance with the principal objects of the company as set out in the memorandum of association; Provided that every name need not be necessarily indicative of the objects of the company, but when there is some indication of objects in the name, then it shall be in conformity with the objects mentioned in the memorandum; (omitted as per Notification G.S.R. 99(E) dated 22.01.16)

(iii) the company’s main business is financing, leasing, chit fund, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund or Investment or Loan, etc.;

(iv) it resembles closely the popular or abbreviated description of an existing company or limited liability partnership;

(v) the proposed name is 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:

Provided that if 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) any part of the proposed name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof e.g. co-operative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.;

Explanation.- For the purposes of this sub-clause, it is hereby clarified that the name including phrase ‘Electoral Trust’ may be allowed for Registration of companies to be formed under section 8 of the Act, in accordance with the Electoral Trusts Scheme, 2013 notified by the Central Board of Direct Taxes (CBDT):

Provided that name application is accompanied with an affidavit to the effect that the name to be obtained shall be only for the purpose of registration of companies under Electoral Trust Scheme as notified by the Central Board of Direct Taxes;

(vii) the proposed name contains the words ‘British India’;

(viii) the proposed name implies association or connection with embassy or consulate or a foreign government;

(ix) the proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in Government;

(x) the proposed name is vague or an abbreviated name such as ‘ABC limited’ or ‘23K limited’ or ‘DJMO’ Ltd: abbreviated name based on the name of the promoters will not be allowed.

For example:- BMCD Limited representing first alphabet of the name of the promoter like Bharat, Mahesh, Chandan and David: Provided that existing company may use its abbreviated name as part of the name for formation of a new company as subsidiary or joint venture or associate company but such joint venture or associated company shall not have an abbreviated name only e.g. Delhi Paper Mills Limited can get a joint venture or associated company as DPM Papers Limited and not as DPM Limited: Provided further that the companies well known in their respective field by abbreviated names are allowed to change their names to abbreviation of their existing name after following the requirements of the Act; (omitted as per Notification G.S.R. 99(E) dated 22.01.16).

(xi) the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding and a period of two years have not elapsed from the date of such dissolution:

Provided that if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 248 of the Act or under section 560 of the Companies Act, 1956(1 of 1956), then the same shall not be allowed before the expiry of twenty years from the publication in the Official Gazette being so struck off;

(xii) it is identical with or too nearly resembles the name of a limited liability partnership in liquidation or the name of a limited liability partnership which is struck off up to a period of five years;

(xiii) the proposed name include words such as ‘Insurance’,‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., unless 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;

(xiv) the proposed name includes the word “State”, the same shall be allowed only in case the company is a government company;

(xv) the proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited;

(xvi) the name is only a general one, like Cotton Textile Mills Ltd. or Silk Manufacturing Ltd., and not Lakshmi Silk Manufacturing Co. Ltd;

(xvii) it 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: (Omitted as per Notification G.S.R. 99(E) dated 22.01.16).

(xviii) 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:

Provided that the name combining the name of a foreign country with the use of India like India Japan or Japan India shall be allowed if, there is a government to government participation or patronage and no company shall be incorporated using the name of an enemy country.

Explanation.- For the purposes of this clause, enemy country means so declared by the Central Government from time to time.

(3) If any company has changed its activities which are not reflected in its name, it shall change its name in line with its activities within a period of six months from the change of activities after complying with all the provisions as applicable to change of name. (Omitted as per Notification G.S.R. 99(E) dated 22.01.16).

(4) In case the key word used in the name proposed is 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) shall be attached with the application for name. In case the name includes the name of relatives, the proof of relation shall be attached and it shall be mandatory to furnish the significance and proof thereof for use of coined words made out of the name of the promoters or their relatives. (Omitted as per Notification G.S.R. 99(E) dated 22.01.16)

(5) The applicant shall declare in affirmative or negative (to affirm or deny) whether they are using or have been using in 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 and 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 .

(6) 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 unless the previous approval of the Central Government has been obtained for the use of any such word or expression-

(a) Board; (b) Commission; (c) Authority; (d) Undertaking; (e) National; (f) Union; (g) Central; (h) Federal; (i) Republic; (j) President; (k) Rashtrapati; (l) Small Scale Industries; (m) Khadi and Village Industries Corporation; (n) Financial Corporation and the like; (Comma between Financial and Corporation has been omitted as per Notification G.S.R. 743 (E) dated 27.07.2016) (o) Municipal; (p) Panchayat; (q) Development Authority; (r) Prime Minister or Chief Minister; (s) Minister; (t) Nation; (u) Forest corporation; (v) Development Scheme; (w) Statute or Statutory; (x) Court or Judiciary; (y) Governor; (z) 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 za) Bureau

(7) For the Companies under section 8 of the Act, the name shall include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc. Every company incorporated as a “Nidhi” shall have the last word ‘Nidhi Limited’ as part of its name.

(8) 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.

Annexure-B

As per Section 3 (Prohibition of improper use of certain emblems and names) of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950):

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.

Following are the provisions provided in the schedule to Section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950):

1. The name, emblem or official seal of the United Nations Organization.

2. The name, emblem or official seal of the World Health Organization.

3. The Indian National Flag.

4. The name, emblem or official seal of the Government of India or of any State, or any other insignia or coat-of-arms used by any such Government or by a Department of any such Government.

5. The emblems of the St. John Ambulance Association (India), and the St. John Ambulance Brigade (India), consisting of the device of a white eight pointed cross embellished in the four principal angles, whether or not the device is surrounded or accompanied by concentric circles or other decoration or by lettering.

6. The name, emblem or official seal of the President, Governor, Sadar-i-Riyasat or Republic or Union of India.

7. Any name, which may suggest or be calculated to suggest-

(i) The patronage of the Government of India or the Government of a State; or

(ii) Connection with any local authority or any corporation or body constituted by the Government under any law for the time being in force.

8. The name, emblem or official seal of the United Nations Educational, Scientific and Cultural Organization.

9. The name or pictorial representation of Rashtrapati, Rashtrapati Bhavan, Raj Bhavan.

9-A. The name of pictorial representation of Mahatma Gandhi, Pandit Jawaharlal Nehru, Chhatrapati Shivaji Maharaj or the Prime Minister of India or the words “Gandhi”, “Nehru” or “Shivaji”, except the pictorial use thereof on calendars where only the names of the manufacturers and printers of the calendars are given and the calendars are Dot used for advertising goods.

10. The medals, badges or decorations instituted by the Government from time to time or the miniatures or replicas of such medals, badges or decorations or the names of such medals, badges or decorations or of the miniatures or replicas thereof.

11. The name, emblem or official seal of the International Civil Aviation Organization.

12. The word “Interpol” which is an integral part of the International Criminal Police Organization.

13. The name, emblem or official seal of the World Meteorological Organization.

14. The name, emblem of the Tuberculosis Association of India.

15. The name, emblem and official seal of the International Atomic Agency,

16. The names “Ashoka Chakra” or “Dharma Chakra” or the pictorial representation of Ashoka Chakra as used in the India National Flag or in the official seal or emblem of the Government of India or of any State Government or of a Department of any such Government.

17. 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 or the pictorial representation of any building occupied by any of the aforesaid institutions.

18. The name and emblem of the Rama Krishna Math and Ramakrishna Mission consisting of a Swan floating on waters, with a lotus in the foreground and the rising sun in the background, the whole being encircled by a hooded serpent, with the words superimposed on the bottom portion.

19. The names and emblems of the Sri Sarada Math and Ramakrishna Sarada Mission consisting of a Swan (facing right) floating on water, with a Lotus in the foreground and the rising sun in the background, the whole being encircled by a wild serpent (facing right) with the words superimposed on the bottom portion.

20. The name of the Bharat Scouts and Guides’ with its ‘Emblem’.

21. The name and emblem of the International Olympic Committee consisting of five interlaced rings.

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