Tips to avoid resubmission in name reservation application
Name is an integral part of any business entity. It creates an identity in eyes of stakeholders.
Professionals as well as the promoters involved in incorporation needs to very sensitive towards the legal provisions regarding reservation of name. At the same time, they must be creative to develop a unique name which is able to make its place in the market.
Often professionals face resubmission while making a name reservation application for proposed Company/LLP.
In few cases even after complying with all the relevant provisions of law, resubmission is faced due to the discretionary power of authorities.
Following steps could be followed to avoid resubmission and obtaining approval in the first instance
1. .Provide significance of proposed name: Though it is not a mandatory requirement, but still, it is highly advisable to provide significance of proposed names. For example: In case the promoters propose the name based upon the name of their children, parents etc. It is better to mention this fact along with a copy of identity proof of the person whose name is being used in proposed name.
It is observed that in case the prefix of name is such which is not known or make sense in general. Central Registration Centre, MCA marks the form for resubmission with a remark “Provide Significance of name”. This situation can be avoided in case the significance along with supporting document (if applicable is attached as an attached in the very first instance itself)
2. Public Search of Registered Trademark in the appropriate class: Sometimes we omit to go for a public search of registered trademark and simply file the application on the basis of public search of existing Company /LLP on MCA portal. It is equally important to have a through search and see that prefix or the entire proposed name is not a registered trademark as per trademark registry.
In case such trademark belong to the promoter or permission is taken from trademark owner to use the trademark, ensure that a “No Objection Certificate” along with a self-attested copy of PAN card of trademark owner is attached along with name reservation application. In case the trademark owner is a company then No Objection certificate shall be in form of a Board Resolution and PAN of signatory shall also be attached.
3. Public search of Existing Companies / LLP having similar name: Public search of existing companies and LLP should be made very precisely keeping in mind all the relevant rules of Companies Act, 2013 and LLP Act, 2008 as may be applicable.
In case the name resembles with the name of existing company which belongs to the promoter group or consent from such company with whom the proposed name resembles is obtained, make sure that the consent is received in the form of a board resolution only and PAN of signatory shall also be attached.
4. Selecting appropriate Activity Code: Activity code shall be entered with extra consciousness as this also one of the major reasons for resubmission. Ministry is very sensitive towards the correctness of activity code. There should be a proper sync between the brief objects provided and activity code selected.
Consequences when the form is marked for resubmission
1. Delay in entire incorporation process: Resubmission leads to filing the application again and the form is then lined up once again in the queue of ministry for processing which causes a delay in the entire incorporation process. This could be painful in case of urgent assignments.
2. Possibility of Rejection: Only one resubmission is allowed, post that if the application is not approved it gets rejected, which implies a loss of statutory fees.
Make sure that while making resubmission you do not just pay heat to resubmission remark but also go through all the provisions once again, as there could be multiple deficiencies in the proposed name out which few may get omitted in the scrutiny in the first instance. These can be pinpointed in second instance as rejection remark.
For eg. A proposed name may have two deficiencies
a. It is identical to an existing company
b. The prefix of proposed name is a registered trademark.
In such case if the resubmission remark is raised only for point (a) and is omitted for point (b). The stakeholder may just comply with the resubmission remark by attaching the No Objection Certificate for existing name.
In such scenario the ministry can reject the resubmitted form on basis of point(b) mentioned above.
So, it is the duty of stakeholder to ensure completeness of application even at resubmission stage and not just to rely on the resubmission remark.
3. Loosing trust of Client: Clients appreciate the work of professionals if it is prompt and completed in the very first instance. On the contrary new clients may lose their trust on professionals in such cases.
Though resubmissions are inevitable, we can try being extra sensitive to reduce the resubmission rate which in turn would reduce burden of pendency on central registration centre, ministry of corporate affairs.
Author Bio
Very informative and well articulated!