Companies Act of 2013 states that a brand name is a company’s most valuable asset. Having a brand name increases your company’s goodwill with potential customers and clients. Brand names remain an organization’s most important identifier as long as they exist. The Companies Act, 2013 and the Companies (Incorporation) Rules, 2014 therefore play a massive role in enforcing the rules that companies must abide by when naming their companies, whether it is a private limited company or an OPC.Guides Regarding Company Names Under The Companies Act Of 2013: An Overview:
LLP (Limited Liability Partnership) or person company according to the Companies Act of 2013.
Take into consideration the following aspects before selecting the winning name for the company, which will lead the company to new heights:
Companies Act Of 2013 stipulates that a company’s name must be unique:
A company name must be novel and unique for it to be approved by the Ministry of Corporate Affairs. The MCA. The proposed name should not be similar to that of existing companies or LLPs. Before coining a company name, the following factors must be considered.
- If the company name is simply the plural version of an existing name, it will not be considered unique. If they called it ‘Novotel Gears Private Limited’, the company would be rejected.
- Spelling, punctuation, and letter case: Simply altering the letter case, spacing between words, or punctuation marks in an already existing company name can’t make it unique. Novotel Gear Private Limited or Novotel Gear Private Pvt Ltd is not an exclusive company name and cannot be registered.
- Combining or detaching words from an existing brand name will not constitute a new or innovative name. Names such as NovoTel Gear Private Limited and Novotel Gear Private Limited will not be approved for companies named NovoTel Gear Private Limited.
- A new brand name that changes one or more tenses of an existing brand name, or by changing words to numbers, will be rejected. The name of the company will also be rejected if it is ‘Novotel One Gear Private Limited’ or ‘Novotel 1 Gear Private Limited’.
- Even minor changes to a brand name would not make it novel or unique. If a company came up with the name ‘EM.EN.EM Private Limited’ instead of the name of an existing company, it would be rejected.
- If a private company’s name is merely altered or misspelled, the resulting name will be compared to the originally registered names for uniqueness, and it will be rejected if it is similar to the former. A registered company named Magic Movies Private Limited will be disapproved if another business comes up with the name Magic Movies Private Limited even though there is a variation in spelling.
- The addition of internet-related domain names such as .com, .net, .org, etc. to existing names cannot be considered for registration. In the event that a company is registered as ‘Magic Movies Private Limited’, coming up with a name like ‘Magic Movies.com Private Limited’ will be rejected.
- Common Titles: Adding words like The, Modern, New, Shri, Sree, Om, Jai, etc, does not make the title unique. If a company’s name is Magic Movies Private Limited, then ‘The New Magic Movies Private Limited’ is not considered to be unique.
- Addition of names of places: Adding names of countries, cities, or other geographical locations to an existing name will not make it unique. If the registered name is Magic Movies Private Limited, adding India to it and making it ‘Magic Movies India Private Limited’ will not make the name unique.
- Reversing the Order of Words in an Existing Title: rearranging or reversing the order of words in an existing title cannot be considered unique. For instance, if the registered name is ‘Packers and Shakers Private Limited’, changing it to ‘Shakers and Packers Private Limited’ does not constitute a unique name.
In addition, the name chosen should follow the guidelines listed below:
- In accordance with the Emblems and Names (Prevention and Improper Use) Act 1950, the name should not violate emblems and names.
- The proposed name of the company should not violate or be incompatible with the Trademarks Act, 1999
- It should not contain any words that are offensive or repulsive to any section of the population
- The company’s name should not be similar to names of LLPs or names that are being reserved by the MCA
- The name of the company should reflect the nature of its business, as described in the Memorandum of Association (MoA)
- In the event that the company deals with financial activities, such as investment funds, securities, or a combination of these, the name of the company should reflect that.
- It should not include words indicating a legal entity or its connotations like Trust, LLP, Partnership, HUF, proprietor etc.
- ‘British India’ should not appear in the name
- If the company’s name implies that it is affiliated with any foreign government or embassy, that is not the case in reality.
- A company’s name should not be associated with a national leader, a revered person, or a person occupying a critical position in government
- Vague or abbreviated names are strictly prohibited, such as ‘XYZ Private Limited’, or ‘ABK Private Limited’, meaning names starting with the initials of the names Amar, Bharat, Kumar, etc.
- There should be no resemblance between the name and the names of liquidated companies. You must wait at least two years before naming such companies
- Names of companies should not be identical to those of companies that were struck off. The name may not be used before the expiration of 20 years after which the name will be struck off the official Gazette
- It is necessary to obtain approval from the respective regulators if the company’s name includes words such as ‘Bank’, ‘Insurance’, or ‘Stock Exchange’, such as RBI (Reserve Bank of India), SEBI (Securities and Exchange Board), IRDA (Insurance Regulatory and Development Authority).
- A private company cannot include the word ‘State’ in its name. It can only be used by government companies.
- The name of a country, a continent, a state, and so on cannot be used. Examples include Chennai Limited and Mysore Limited. A company cannot use the name of another country as part of its name unless there is a valid proof of business alliance with that country, such as a signed Memorandum of Understanding
- Names such as National, Union, Republic, Federal, etc require the approval of the central government.
It is therefore important to follow all the rules mentioned while coming up with the name of a business. Even though the list may seem too exhaustive, given the permanence of the name and the importance it carries, it is important to note such minute details. As long as the company exists, its name will be passed down from generation to generation. Hence, the company name should be chosen with utmost care.