The Ministry of Corporate Affairs (MCA) established a Central Registration Centre (CRC) to process Applications for Reservation of Companies Names across India [25 Jan 2016]. The CRC process the application for reservation of name received by it in e-form INC-1 with the prescribed fee as provided in the companies (registration of offices and fees) Rules,2014. In the customary process, application in form INC-1 allows you to submit six options for your company name, in order of preference. If you have preferred all in one form INC-29 for registration/incorporation of a company, the system allows you to give you only one option. Therefore it is important to understand the MCA’s naming guidelines before selecting a name for your company. In the application form, you need to describe the significance of the approved name of the proposed company in one or two sentences. The brief description of objects of the company, authorized capital of the company, DIN of the prospective directors with their names shall be furnished.
MCA under companies (incorporation) Amendment Rules has amended/omitted certain clauses and rules in the Companies (incorporation) Rules 2014 vide notification dated 22nd January 2016. The omission of certain clauses and rules in Rule No.8, Rule No.9, and Rule No.36 in the above amendments eased the name approval process. The earlier requirement of naming a company on the basis of the object of the company is now dispensed with in the amended rules. Thus, the Promoter can keep any name for their company and it will not be rejected on the ground of being vague. The amended rules allow continuation of the old name of the company even when business activities of the company is changed. Further, the amended rule allows three opportunities for resubmission of the application without fresh fees under Form INC-29 instead of two opportunities provided earlier.
The proposed name may be rejected under following circumstances:
Section 4 companies act 2013 and rule 8&9 of companies (incorporation) Rules 2014, the name of the proposed company shall not be identical or to nearly to the name of an existing company or a trademark registered under existing company law or any previous company law. Further, the name shall not be such that its use by the company will constitute an offense under any law for the time being in force or ii) is undesirable in the opinion of Central government. So, you need to find out from MCA portal whether the name intended to be proposed is currently used by someone else or name proposed is already under trade- mark protection. You can check at ipindia.nic.com to confirm that there is no registered trademark in the same name. However, you may take NOC from the owner of the Trademark authorizing you to keep the same name to your company. The additional words (like New, Om, Jai, Shri or Sri etc.) and clubbing or separating words of existing company do not make a name unique. Similarly, adding the internet words like .com or dot com, .net, .org etc. does not make a name unique. The different phonetic spelling and spelling variation do not make the name unique. The name of the proposed company cannot suggest the association or connection with persons of high position in the Government or a national hero. It shall not imply the association with Indian or Foreign Government. The name of the proposed company cannot comprise the words like insurance, bank, stock exchange, venture capital, asset management, mutual fund or other financial activity, without the approval from Sectoral Regulatory Bodies like RBI, SEBI, IRDAI, etc. The name of the close blood relative of the promoter can be proposed as part of the name of the company subject to the approval of the same by MCA on submission of proof of the relation between the named person and the promoter. If the name proposed is the name of an existing business of the promoter under any Partnership firm, sole proprietary or unregistered entity, then it is necessary to specify the name of such firm and attach NOC from the sole proprietor/ partners/other associates of existing company.
The approval of name proposed will be reserved for sixty days from the date of approval. Additional thirty days may be allowed to keep the reserved name on revalidation application with requisite fee to MCA. If the proposed company has not been incorporated within such extended period the reservation of name will be lapsed by MCA and same may be available for other applicants.
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Disclaimer: This article should not be construed as a professional advice under any circumstance. It is clarified to the readers that the contents provided in this write-up are intended for general information only and cannot be relied upon for real-time professional facts. If help/clarification is required, readers are advised to refer relevant provisions of law and also to take the advice of the qualified professionals like a Company secretary, Charted Accountant, etc. before applying or accepting any of the points mentioned above. The author or the website accepts no responsibility whatsoever caused by the use of any information provided in this article and shall not be liable for any losses, claims or damages which may arise because of the contents of this post.