You are currently viewing MCA Naming Guidelines for Private Limited Companies

MCA Naming Guidelines for Private Limited Companies

Loading

Last Updated on June 17, 2024 by Kanakkupillai

Name selection is one of the key steps in company incorporation, as its approval must be given by the Ministry of Corporate Affairs (MCA). Unwanted names can include ones that resemble existing businesses or contain sensitive terms that require approval by other regulators such as RBI, IRDA, SEBI, etc.

MCA Naming Rules

  1. Availability of the Name

Name selection is one of the most consequential decisions any business must make, as it conveys its vision and motive to its target market. Therefore, selecting an original and distinguishing name for their organization is vitally important; additionally, no other businesses must use that name – so checking MCA database availability before making your final decision can help.

Once a name has been selected, it must be submitted for review by MCA for approval. If it meets their guidelines and is accepted as part of your company name, MCA will reserve it; otherwise, it will be rejected and remain unavailable.

When this occurs, the promoter can submit up to two more names for consideration; however, it’s important to keep in mind that the reservation of a name for a company or LLP lasts only 20 days; within this period, they must file for incorporation or else it will expire, and they’ll need to select another one.

Naming your business may be challenging and time-consuming. Still, the effort will pay off in creating something truly memorable and original that stands out in the market and attracts more customers.

  1. Restrictions on the Name

Name is one of the primary identities for any business. It should remain unchanged throughout its lifespan, making selecting an apt one of the most essential decisions a business owner must make. MCA has issued guidelines on this front to help ensure their business stands out from competitors by choosing something special and distinctive.

These guidelines must be observed when selecting a name for your company, as they will help ensure its availability while preventing undesirable registrations. Any company that registers using names not compliant with MCA guidelines could face serious repercussions, such as being ordered to change it immediately and possibly paying a fine.

MCA naming guidelines stipulate that no company may register with a name that resembles or closely resembles another business, LLP, trademark, domain name or offensive to any section of society.

The MCA naming guidelines stipulate that any company name should not imply any connection or patronage by either the Central Government, any State Government or local authority formed under a State Government law; they also prohibit certain words similar to “bank”, “insurance”, then “stock exchange”, which necessitate approval by the Central Government before being used in their name.

  1. Characteristics of the Company

Name selection is paramount when starting up a new business, as it sets the tone and impression people have of your brand. Therefore, selecting an original and relevant name that embodies your business must also comply with MCA guidelines and be legally available.

MCA provides a service called RUN that allows entrepreneurs to reserve a unique business name before Pvt Ltd company registration, speeding up the registration process. However, certain restrictions exist regarding what can and cannot be used as the name of a private limited company.

  1. Restrictions on the Name of a Public Limited Company

Naming your business is an integral first step when starting up, as a good name can create an immediate positive impression and draw customers. Furthermore, it can make it easier for people to remember you – but there are certain rules you must abide by when selecting a name for your company.

Names that could be considered controversial should not contain words considered sensitive by government and local authorities, nor can they resemble another company listed on Companies House; should that occur, Companies House will contact you and advise on the necessary steps.

If your company is limited, add “Limited” or “Ltd.” Additionally, check to see if its name has already been trademarked – if so, seek permission from its owner before proceeding with use.

Remember that the Registrar of Companies (ROC) will reserve your new company name for 20 days; if this timeframe passes without your approval, other companies could use it instead. Changing company names requires conducting an extraordinary general meeting, passing a special resolution, and amending Memorandum and Articles of Association documents.

  1. Restrictions on the Name of a Limited Liability Partnership

Selecting an effective name for your company is a significant undertaking, serving as its identity and helping attract customers while growing the business. But there may be restrictions regarding what names can and cannot do; you can use a company name availability checker and the UK Intellectual Property Office trademark register to ensure that any proposed names do not breach existing intellectual property rights.

Name restrictions on limited liability partnerships (LLPs) include being distinct from all domestic or foreign limited liability partnerships, corporations, reserved names, assumed names, trademarks, or service marks registered with the Secretary of State and not being likely to mislead the public.

Names of limited liability partnerships should accurately convey their business activities while including “limited liability partnership.” In addition, their objective should be listed. Examples would be AAA Trading Private Limited and VERVE Hospital Private Limited, both accepted since their purposes differ significantly. Avoid names without objects or that sound similar, as the Ministry doesn’t approve these of Corporate Affairs.

If you wish to change the name of your LLP, an extraordinary general meeting must convene and pass a special resolution to do so. Once approved by MCA, its implementation can begin.

  1. Restrictions on the Name of a Limited Company

Name is one of the most essential assets of a business as it signifies its good standing in the market. Therefore, when selecting its name, it should follow all rules and guidelines in the Companies Act 2013 and Rules of Incorporation; additionally, it must reserve its name with the Registrar of Companies by applying with all fees due.

When selecting names for a company, it is vitally important that any proposed names are available; otherwise, the ROC will likely reject it as well as reserve any name that suggests Government or State control or creates the impression in the minds of the public that there may have been some state sponsorship of that particular venture.

Limited companies must not include words implying they are government organizations, such as “City,” “Township” and “Federal.” In addition, they cannot include references that might imply they operate within these industries unless such business activities exist within their business model.

Name changes require approval from majority shareholders and an updated Memorandum and Articles of Association drafted, which must be approved by the Central Government before the change occurs.

Dos and Don’ts of Choosing a Company Name

1. Object of the Company or LLP

Defining the nature of the business activity is key, so ensuring that the object part of your company or LLP reflects that is essential in ensuring its name accurately reflects this activity. Furthermore, its object part should not be too vague or obscure, and the constitution part should reflect the entity type established (Private Limited Company, LLP or OPC).

When applying to reserve a name with MCA, it mustn’t duplicate trademarks already registered with them. Therefore, before filing the RUN e-form with MCA, it is advisable to conduct an exhaustive search on their website.

Your company/ LLP name must not contain generic terms like International, Hindustan, India, Bharat, or Continental Asiatic Corporation. Any application found using such generic names would be rejected and sent back for resubmission.

2. Object Part of the Company or LLP Name

When selecting the name for your company, be sure that it embodies its purpose well and accurately represents what your business stands for. Furthermore, ensure that it does not resemble any registered under the Companies Act and is free of offensive words.

Your business name should convey trust and security for customers. An online trademark search will show whether a name you propose already exists.

Your business name must include “limited” if it will be a private limited company; Section 8 enterprises and government-owned companies are exempt. Furthermore, avoid words that require prior approval from regulators such as insurance or bank, stock exchange or venture capital asset management otherwise, Nidhi mutual funds are restricted by MCA and need prior approval by their relevant regulatory body.

3. Constitution Part of the Company or LLP Name

Names must not mislead the public about what kind of activities a company engages in, and any proposal that gives the impression that the firm engages in unauthorised financial activities, for example, financing, leasing, chit fund investments, or securities, is unlikely to be approved.

ROC has simplified and expedited the name approval and reservation process, making it swift, simple and cost-effective. Names may be submitted online by filling out either RUN or SPICe Plus forms, depending on the type of company being formed; once approved, they will be reserved for up to 20 days before becoming active again.

Names chosen for companies and LLPs must be distinctive from other existing entities, trademarks or brand names, etc. As per MCA naming guidelines, company names should meet several do’s and don’ts when selecting names; an ideal name combines all three components: Name part, Object part and Constitution part for optimal company growth.

4. Legality of the Company or LLP Name

As part of your company or LLP name, it should reflect your main business activity and act as the core identity of your enterprise. When selecting this element of a name for either company or LLP registration, make sure it embodies this core activity clearly – one way is to choose an original word that resonates with what your enterprise does while making it easy to remember.

Name your proposed company name after itself without being too similar to existing names. The RUN e-form on the MCA portal can be used to check its availability.

Once you have chosen the name for your business, Kanukkapillai can also assist in carrying out a trademark search to ensure any future issues do not arise. Once registered, your new name can be registered through us and registered as such.

Supreena

Welcome to www.kanakkupillai.com! Hello there, I'm Supreena, a legal advisor deeply passionate about entrepreneurship and dedicated to helping business owners and startup enthusiasts navigate the complex landscape of business formation, growth, and success. My profound understanding of the intricate aspects of various industries, legal frameworks, and strategies for sustainable growth makes me your trusted partner in achieving your business goals. With a commitment to promoting diversity and inclusivity in the business world, I firmly believe that every entrepreneur, regardless of their background, should have access to the legal expertise and guidance needed to thrive in the competitive startup ecosystem. I am honored to be part of your journey toward entrepreneurial success through this blog, where I'll provide valuable legal insights and strategies tailored to your business needs. Thank you for entrusting me with the opportunity to contribute to your path to business prosperity. For more information and resources, please visit www.kanakkupillai.com.