If you have just started your journey of starting your startup or business in India, you must understand that name represents a lot in Indian culture, and so does the business name. While registering a new business, the most critical thing is to find a suitable name for the company. Your company’s name serves as your business card, distinguishing your enterprise in a vast market. It is very important that you choose a name that’s compelling, creates a favorable impression, and is in compliance with the naming regulations prescribed by the Ministry of Corporate Affairs (MCA) in India. Here in this article, we will provide a detailed overview of the rules for Private Limited Company name approval in India.
You Must Choose a Company Name That is Desirable
The Companies Act, of 2013, states that a company should not register under a name that is undesirable. An undesirable name can be one that is identical to or closely resembles an existing company’s name, or a Limited Liability Partnership (LLP) registered or approved by the Registrar. Also, names that infringe on a registered trademark, or trademark applications, are deemed undesirable. Furthermore, names that include offensive or profane words or phrases that could offend any group of people are not permitted.
You Must Do a Test for Similarity
The task of determining the similarity between a proposed name and an existing one follows specific guidelines. Firstly, a simple change in the plurality of words, variation in type/case/spacing of letters, or using different tenses or numbers of the same word does not make a name unique. For instance, ‘City Hospital Private Limited’ and ‘City Hospitals Private Limited’ are considered identical. Also, names with different phonetic spellings or combinations of the same word aren’t distinct. Preceding an existing name with words like ‘New’, ‘Shree’, ‘Om’, etc., also doesn’t make it unique.
Be Cautious with Names that Require Approval from Other Authorities
In cases where the proposed name includes certain specific words such as ‘insurance’, ‘bank’, ‘stock exchange’, ‘venture capital’, and so on. A declaration by the applicant affirming compliance with the requirements of the respective regulators such as IRDA, RBI, SEBI, etc., is required. Moreover, if the name suggests any connection or patronage with the Central or State Government, or any local authority or body formed by them, prior approval from the Central Government is mandatory.
Minimum Authorized Capital is Required for Certain Names
Certain keywords in a company’s name can require a specific minimum authorized capital. For example, if you choose to incorporate ‘Hindustan’, ‘India’, or ‘Bharat’ in any part of the company’s name. You need to have a minimum authorized capital of Rs. 5 lakhs. If words like ‘Enterprises’, ‘Products’, ‘Business’, and ‘Manufacturing’ form part of the name, a minimum authorized capital of Rs. 10 lakhs is required. For ‘Hindustan’, ‘India’, and ‘Bharat’ being used as the first word of the company’s name, the required minimum authorized capital is Rs. 50 lakhs. The requirement can go up to Rs. 1 crore or Rs. 5 crores for using specific words like ‘Industries’, ‘Udhyog’, ‘International’, ‘Global’, ‘Universal’, ‘Continental’, ‘Inter-Continental’, ‘Asiatic’, ‘Asia’, and ‘Corporation’.
The process of naming your private limited company in India requires careful thought. Not just from a branding perspective but also in terms of legal compliance. Ensuring that the name is desirable, unique, approved by relevant authorities, and aligns with your company’s authorized capital. All are part of the process that paves the way for a smooth start to your entrepreneurial journey. If you already decided on a name for your business, and want to register a private limited company. Chartered Accountant can greatly assist you in the process of registering a private limited company. They can give you a hassle-free experience of starting a new business here in India.
