468 total views, 3 views today
Posted on April 24, 2021
Choosing an appropriate name for the company is one of the most important steps while setting up a business or a company. The name which is chosen should be under the rules of the Companies Act, 2013 or Limited Liability Partnership Act, 2008. There are certain rules and guidelines in naming the company which has to be followed while choosing an acceptable name for a LLP or a company.
Generally, an acceptable name company or LLP has three parts; they are the Name part, the Object part, and the Constitution part. For instance, if the name is ABC Solution Private Limited, the “ABC” represents the name part of the company, “Solution” represents the Object part and “Private Limited” represents the Constitution part of an acceptable name of company or LLP. Let us look at the three parts in detail.
According to the Companies Act or the LLP Act, every company should name themselves with a unique and acceptable name in accordance with the guidelines. The name must not resemble or be the same as that of an entity or trademark or LLP of the same industry which already exists. For instance, if there is a company called ABC potables Private Limited then there cannot be any company existing or running with the same name in the same field and it should not even as ABC potables LLP. However, a company with the same name in a different field may be acceptable. Therefore, it is the founder’s responsibility to ensure the sanctity of the names while choosing for the business.
The object part of the company name is important as it tells what the company deals about or all about or the nature of business. In short, the object part of the acceptable name defines the company’s business or activity. Even though the companies may have or share the same company name, if their company’s objects are different, in this type of situation, the same company’s name are acceptable and is allowed to be registered. Anyway, it is important for the company to name their object part very clearly. Company names without an object part can be rejected during the registration process. Here are some of the well-known object parts, Technology, Textiles, Hospital, Pharmaceuticals, Medicals, Trading, Aviation, Shipping, Information, Manufacturing, Electricals, Mobiles, Containers, Designs, Foods, Hotel, Restaurant, Motors, Power, Steel, Holding, Construction, Real Estate, Financial, Travels, Energy, Solar Power, Garments, Plastics, and Interiors and so on.
The constitution part of the company name represents the type of business or entity. Private Limited Companies are defined by Private Limited Company or Pvt. Ltd Company; Limited Companies are presented by LTD Company or Limited Company; One Person Companies are defined by OPC or One Person Company, and Limited Liability Partnerships are presented by LLP or Limited Liability Partnership.
Minimum Authorized Capital for Certain Words
There are certain words that can be used in the name of a company which requires the company to possess a minimum amount of authorized capital for their business. Below is the table with details of the word and the required minimum amount of authorized capital.
|The word that can be sued in the name of a company||Authorized capital required|
|Corporation||Rs. 5 Crore|
|International, Universal, Continental, Asiatic, Globe, Inter-Continental, Asia being the first word of the company name||Rs. 1 Crore|
|Industries / Udyog||Rs. 1 Crore|
|If International, Globe, Universal, Continental, Inter-Continental, Asiatic, Asia is applied within the name (with or without brackets)||Rs. 50 Lakhs|
|Hindustan, Bharat, India being the first word of the name||Rs. 50 Lakhs|
|Enterprises, Business, Products, Manufacturing||Rs. 10 Lakhs|
|If Hindustan, India, Bharat is applied within the name (with or without brackets)||Rs. 5 Lakhs|
As per Companies Act, 2013 or Limited Liability Partnership Act, 2008, there are certain rules and guidelines which have to be followed while naming a business or entity or company. Here are some such rules and guidelines which have to be kept in mind when choosing a unique and acceptable name.
- It is not acceptable if the Plural Version of any of the words is used in a company name that is already running the market. For example, you cannot name your company as ABC Steels Private Limited if a company already exists has the name as ABC steel Private Limited.
- It is not acceptable if you change the case or type of letters or punctuation marks or the spacing between letters of an existing company name to make it a unique company name. For instance, changing ABC Construction Private Limited to Abc Construction Private Limited.
- It is not acceptable if you try to join any words or separate any words, like, do not change ABC Construction Private Limited to A B C Construction Private Limited and so on.
- It is not acceptable if you change the tense or number of a word in the company name which works in the same field or industry. For example, ABC Construction Private Limited cannot be changed to ABC’s Construction Private Limited.
- The use of different spelling or phonetic spelling with variations cannot be acceptable as a unique name.
- It is not acceptable if you misspell certain words in the name intentionally to make the company name unique because the checking of the name is done with the correct spelling or words only.
- Adding internet-related designations like .com, .net, .edu, .gov, .org, .in and so on to make it as a unique name is not acceptable.
- It is not acceptable to add any common names or the name of a place or titles to make the name as a unique name. However, in some cases, the names with places may also be allowed and to get this, you have to submit the no objection letter from the existing company by way of Board resolution.
- Different combinations of the same name or words are not acceptable. Such as, Manufacturers and Traders cannot be accepted as Traders and Manufacturers.
- There are certain criteria that qualify the names as undesirable.