India has known to be an Entrepreneurs country and in fact, there is no hidden fact that Entrepreneurs are born in India. However, with changing times and laws and its impact, the Traditional Entrepreneurs are not getting themselves upgraded or changed with the system and this has affected them a lot in many ways. I have in another article named “Traditional Business = Are we not personally responsible for the decline in Business?” have given a brief description of how Traditional Businesses are getting lost in this fast-changing business race.
Here the intent of the Topic is Business Name and its relevance to its growth. The majority of the Business Owners have now started giving importance to have their own brand especially in the Manufacturing Sector and also in the Service sector. The online sales companies providing the platform to sell their goods/services have almost made it mandatory of proving that the brand is either owned by them or Trademark Registration Application has been filed which is a good sign and a way to promote their brand.
The term “Business name” means the name of the business entity which is being chosen by the Entrepreneur which most of the time either becomes their brand entity in the market and or just a compliance name. For ex., CCD is a brand but the name of the business entity is different. It is of utmost importance for every business owner to understand the difference between a business name and brand name and this calls for an initial discussion of long term planning in small ways. Once there is clarity on the business name and brand name and way of doing the business, necessary steps can be taken.
The brand name is normally called as Brands. The term Brands means “Brands create trust, provide orientation, influence purchasing decisions and bind customers. Brands suggest quality and create identity. A good brand increases the value of business entities and at the same time sharpens the business’s profile, as it helps you to differentiate yourself from your competitors”.
Once the idea becomes a concrete plan, the second stage comes is the Business set-up and once that is decided, here comes the major decision step i.e., Business Name and Brand name. In today’s era, Brand is a reputation that decides the goodwill of your products or services and hence it shall not be taken lightly or to say be taken seriously. There are many business entities who have hired consultants to decide on the name of the business, brand, color to be used, pattern to be used, sound to be used and else and else and this is nothing but a part of marketing strategy to create the brand and then to sell the products or services
I invite your attention that under the provisions of Companies Act, 2013, one cannot get the name if the same is either registered or is being filed under Trademark Act and also if the mark falls under Section 9 and 11 of Trademark Act and in fact, even the Partnership Firm is not getting the name which is already on their database but since there is no online system as with ROC, it is not sure how they work. Most of the times, Entrepreneurs start their business as Sole Proprietorship and start using the name and then they find it difficult to convert into another entity with ROC for not getting the name as per the criteria laid down by ROC in regard to name approval and hence it is always better to see if the same is available with ROC and then apply for Trademark Registration and then either you can get the name approval done and if You intend to do the business as Sole Proprietorship or Partnership, you can get the same file with TM Office and start advertising so that you can then claim its prior ownership and this will safeguard from other who intend to use similar names.
It is relevant to note that in India, brands and nowadays business names are governed by the Trademark Act, 1999, and also under the Common Law. Statutory protection of a trademark is administered by the Controller General of Patents, Designs, and Trade Marks, a government agency that reports to the Department of Industrial Policy and Promotion (DIPP), under the Ministry of Commerce and Industry. It is important to understand that Trademark Registration is not mandatory but the prior usage is and hence even if you are using the mark for a long time and is found similar to already registered mark which is prior to you, then your name or mark will be canceled. There are provisions under the Companies Act wherein if any company is formed with names similar to names which are being used by another business entity, then such business entity can make an application for rectification of names and there are many matters where the name change is ordered and if failed, then further coercive action is also being ordered.
In this era, brand name/business name if similar to brand name performs four functions:
In, Mahendra and Mahendra Paper Mills Vs Mahindra and Mahindra Ltd (09.11.2001), Mahindra & Mahindra Ltd., the respondent herein, instituted a suit before the Bombay High Court seeking a decree of permanent injunction against Mahendra & Mahendra Paper Mills Ltd., the appellant herein, restraining it from using in any manner as a part of its corporate name or trading style the words “Mahendra & Mahendra” or any word which is deceptively similar to “Mahindra” and/or ‘Mahindra & Mahindra’. In the said suit the plaintiff filed an application seeking an interim order of injunction against the defendant on similar terms. The Hon’ble Court after perusal of the records passed the interim order by stopping the Defendant from using the name ‘Mahendra & Mahendra’ in his business establishment, which order was confirmed by the Division Bench of the court, is under challenge in this appeal filed by the defendant.
The reading of the above paras gives the clear picture that choosing the business name is of utmost importance as any name in which you invest money and there is goodwill being created amongst the public at the large, sudden change of name may result in slowing down the business and or may result in winding up. We are in the era of Trademarks and hence the Business name is the most important decision for any Entrepreneurs or Startups.
The best way to chose the business name, in my view, is as under:
Note: Please avoid using the name if you found is not clear or your name has any resemblance to ensure there is no dispute in future
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*Content of this post is a Copyright work and is owned by THE LEGAL DESK (Adv Lalit K Jain)