The Ministry of Corporate Affairs(MCA) has issued Name Availability Guidelines, 2011, vide its notification dated 8th July, 2011.
The applicants and Registrar of Companies are advised to adhere to following guidelines while applying or approving a name:
1. A company cannot be registered with an undesirable name. (As per Section 20 of the Companies Act, 1956)
Meaning of undesirable:
1.A proposed name is considered to be undesirable if it is identical with or too nearly resembling with:
(i) Name of a company in existence and names already approved by the Registrar of Companies;
(ii) Name of a LLP in existence or names already approved by Registrar of LLP;
(iii) A registered trade-mark or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999.
2. While applying for a name in the prescribed e-form-1A, using Digital Signature Certificate (DSC), the applicant shall be required to furnish a declaration to the effect that:
(i) he has used the search facilities available on the MCA portal for checking the resemblance of the proposed name(s) with the companies and (LLPs) which are already registered or the names already approved.
(ii) the proposed name is not infringing the registered trademarks or a trademark which is under application for registration.
(iii) the proposed name is not in violation of the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950
(iv) the proposed name shall not constitute an offence under any law for the time being in force.
(v) the proposed name is not offensive to any section of people or is not considered a slur against an ethnic group, religion, gender or heredity
(vi) he has gone through all the prescribed guidelines, understood the meaning thereof and the proposed name is in conformity thereof;
(vii) he undertakes to be fully responsible for the consequences, in case the name is found to be in contravention of the prescribed guidelines
Scope of Certification:
The professional certifying the Form 1A, shall certify, after verifying the following points:
a. Search facilities have been explored on the MCA portal for checking the resemblance of the proposed name(s) with the companies/(LLPs) already registered or names already approved a
b. Search Report is attached with the application form.
c. Proposed name is not an undesirable name
The name will be made available by the system online to the applicant without backend processing by the Registrar of Companies (ROC).
This facility is not available for applications for change of name of existing companies.
Consequences of Faulty Certification:
The professional shall be liable for penal action under provisions of the Companies Act, 1956 in addition to the penal action under Regulations of respective professional Institutes.
Q1. What if e-form 1A has not been certified by the professional?
Ans: The proposed name will be processed at the back end office of the ROC and the availability or non availability of the name will be communicated to the applicant.
With drawl of Name:
The name can be withdrawn at anytime before registration of the company, by way of specific order giving reasons for withdrawal, with an opportunity to the applicant of being heard, if it is found that the name should not have been allowed.
Consequences of delay in incorporation:
a. The name shall be reserved for 60 days from the date of approval.
b. If the proposed company has not been incorporated within such period, the name shall be lapsed and will be available for other applicants.
Role of Central Government:
The Central Government may direct the company to change the name under Section 22 of the Companies Act, 1956, under the following circumstances:
The name resembles the name of an existing company or a registered trademark.
Q2. How to determine whether a name is identical or not?
Ans: The following shall be disregarded:
(i) The words Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership;
(ii) The words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.;
(iii) The plural version of any of the words appearing in the name;
(iv) The type and case of letters, spacing between letters and punctuation marks;
(v) Joining words together or separating the words,
For example, Ram Nath Enterprises Pvt. Ltd. will be considered as similar to Ramnath Enterprises Pvt. Ltd.;
(vi) The use of a different tense or number of the same word, does not distinguish one name from another.
For example, Excellent Industries will be similar to Excellence Industries and similarly Teen Murti Exports Pvt. Ltd. will be to Three Murti Exports Pvt. Ltd.;
(vii) Using different phonetic spellings or spelling variations,
For example, J.K. Industries limited is existing then J and K Industries or Jay Kay Industries or J n K Industries or J & K Industries will not be allowed.
Similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also;
(viii) The addition of an internet related designation, such as .COM, .NET, .EDU, .GOV, .ORG, .IN,
(ix) The addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai,
For example, New Bata Shoe Company, Nav Bharat Electronic etc.
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.
For example, ‘Unique Marbles Delhi Limited’ can not be allowed if ‘Unique Marbles Limited’ is already existing;
Such names may be allowed only if no objection from the existing company by way of Board resolution is produced/ submitted;
(x) Different combination of the same words does not make a name distinguishable from an existing name,
For example, if there is a company by the name of “Builders and Contractors Limited”, the name “Contractors and Builders Limited” should not be allowed;
(xi) Exact Hindi translation of the name of an existing company in English especially an existing company with a reputation.
For example, Hindustan Steel Industries Ltd. will not be allowed if there exists a company with name ‘Hindustan Ispat UdyogLimited’;
The user shall also adhere to following guidelines: -
(i) It is not necessary that the proposed name should be indicative of the main object. However, in case the proposed name is indicative of any activity, the same will be appropriately reflected in the main object clause of the Memorandum of Association
(ii) If the Company’s main business is finance, housing finance, chit fund, leasing, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund/ Investment/Loan, etc.;
(iii) If it includes the words indicative of a separate type of business constitution or legal person or any connotation thereof, the same shall not be allowed.
For Example, cooperative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.;
(iv) Abbreviated name cannot be given to a new company.
For Example, ‘BERD limited’ or ‘23K limited’
However well known companies are allowed to change their names to abbreviation.
For Example,(for Delhi Cloth Mills limited to DCM Limited, Hindustan Machine Tools limited to HMT limited)
For Example, If the name is only a general one like Cotton Textile Mills Ltd., or Silk Manufacturing Ltd., and not specific like Calcutta Cotton Textiles Mills Limited or Lakshmi Silk Manufacturing Company Limited, the same shall not be allowed;
(v) If proposed name is identical to a dissolved company & it is dissolved as a result of liquidation, proceeding should not be allowed for a period of 2 years from the date of such dissolution since the dissolution of the company could be declared void within the period aforesaid by a Court order under section 559 of the Act.
If the proposed name is identical with the name of a company which is struck off in pursuance of action under section 560 of the Act, then the same shall not be allowed before the expiry of 20 years from the publication in the Official Gazette being so struck off since the company can be restored anytime within such period by the competent authority;
(vi) If proposed names include words such as ‘Insurance’ , ‘Bank’ , ‘Stock Exchange’ , ‘Venture Capital’ , ‘Asset Management’ , ‘Nidhi’ , ‘Mutual fund’ etc., the name may be allowed with a declaration by the applicant that the requirements mandated by the respective Act/ regulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with by the applicant;
(vii)The word “ State”, shall be allowed only in case of a government company.
Also, if proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited, the same shall not be allowed;
(viii) If proposed name contains any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of the Central Government, any State Government, or any local authority, corporation or body constituted by Central or any State Government under any law, unless the previous approval of Central Government has been obtained for the use of any such word or expression;
(ix) If a foreign company is incorporating its subsidiary company, 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;
(x) Change of name shall not be allowed to a company which is defaulting in filing its Annual Returns or Balance Sheets or which has defaulted in repayment of matured deposits and debentures and/or interest thereon.