Many founders believe that once the Ministry of Corporate Affairs (MCA) issues the Certificate of Incorporation, their company name is permanently secured.
That assumption can be dangerous.
Under Section 16 of the Companies Act, 2013, a registered trademark proprietor has the legal right to seek rectification of a company’s name — even after incorporation.
Yes, even after you have received your Certificate of Incorporation.
When Can This Happen?
A company can be directed to change its name if:
- The company is newly incorporated or
- The company has recently changed its name
- Three years have not elapsed from incorporation or name change
- The name is identical with or too nearly resembles a registered trademark
In such cases, the trademark proprietor can file an application before the Central Government (through MCA) seeking a direction to change the company’s name.
What Happens If the Application Is Allowed?
If the Central Government finds merit in the application:
√ The company is directed to change its name within 3 months from the date of direction.
× If the company fails to comply within the prescribed time:
- The Government itself will allot a new name to the company
- The Registrar of Companies (ROC) will enter the new name in the register
- A fresh Certificate of Incorporation will be issued
Imagine the consequences:
- Rebranding costs
- Loss of marketing investment
- Website and domain changes
- Trademark filing losses
- Customer confusion
- Legal expenses
- Damage to goodwill
All because proper trademark due diligence was not done before incorporation.
Practical Example
Suppose “ZEPHYRA” is a registered trademark for fashion goods.
Now, a promoter incorporates:
Zephyra Fashions Private Limited
Even though MCA approves the name and issues the Certificate of Incorporation, the trademark owner can initiate action under Section 16 and seek rectification.
If the Government agrees, the company will be forced to change its name.
MCA approval does NOT override trademark rights.
Company name availability and trademark availability are two different legal checks under two different laws.
Why This Provision Exists
The objective behind Section 16 is to:
- Prevent brand confusion in the marketplace
- Protect intellectual property rights
- Avoid passing off and deceptive similarity
- Maintain fairness in commercial identity
The Companies Act does not grant superior rights over trademarks registered under the Trade Marks Act.
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Disclaimer:- The entire contents of this document have been prepared on the basis of relevant provisions and rules and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.
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