MCA Rules for Company Name Approval

Introduction

Registering a business begins with choosing an appropriate name, a process regulated by the Ministry of Corporate Affairs (MCA). The chosen name must be unique and easily distinguishable from existing companies in the same industry. Once you decide on a suitable name, you can apply through Part A of the SPICe+ form. Upon approval, the MCA reserves the name for 20 days, during which all required documents must be submitted to complete the registration process.

Selecting a company name is a critical step in business formation. To ensure compliance, refer to Rule 8 of the Companies Incorporation Rules, 2014, which outlines the standards for name approval and availability under the Companies Act, 2013. This article serves as a comprehensive guide to MCA naming standards for companies in India, providing everything you need to navigate the process successfully. Keep reading for detailed insights!

Choosing a Business Name in India

Selecting the right name is one of the first and most critical steps when starting a new business. Your company name serves as the primary identifier for your enterprise, so it should be unique, easy to spell, and phonetically distinct to stand out effectively in the market.

MCA Guidelines for Company Names

When registering a company in India, the Ministry of Corporate Affairs (MCA) mandates that the company name adhere to specific guidelines. These rules apply to Private Limited Companies, One-Person Companies (OPC), Limited Liability Partnerships (LLP), and other entities. Names that do not comply with MCA standards will be rejected.

The key legal provisions governing company names include:

Section 4(2) & (3) of the Companies Act, 2013
Rule 8 of the Companies (Incorporation) Rules, 2014

Before applying for name approval, it is essential to review these regulations and conduct a trademark search to ensure the name does not infringe on any existing trademarks.

Prohibited Elements in Company Names as per MCA Guidelines

The Ministry of Corporate Affairs (MCA) has established clear restrictions on what can be included in the names of Private Limited Companies to ensure legal compliance and prevent misuse. Key prohibitions include:

Obscenity: Company names must not contain obscene content.
Vulgarity: Use of vulgar or inappropriate words is strictly prohibited.
Offensiveness: Names should not include language that could be deemed offensive.
Compliance with the Names and Emblems Act, 1956: Names must follow Section 3 of the Act, which prevents misuse of official symbols or emblems.
Government Patronage: Names must not imply affiliation with or endorsement by the central or state government without proper approval.
Uniqueness: Names should not be identical or deceptively similar to existing companies or LLPs.
Undesirable Words: Certain words are restricted under Rule 8 of the Companies (Incorporation) Rules, 2014.
Trademark Compliance: Names must avoid infringement of existing trademarks under Section 4 of the Trademarks Act, 1999.

Following these guidelines ensures that your chosen company name is unique, appropriate, and legally compliant, helping avoid rejection during the registration process.

Section 4: Statutory Provisions for Company Naming

Section 4 of the Companies Act, 2013 lays down the statutory framework for naming companies in India. It outlines the essential principles to be followed when selecting a name for a new company. Detailed guidance is provided under Rule 8, which specifies the dos and don’ts for naming a company. According to these provisions, the name mentioned in the company’s Memorandum of Association (MOA) must comply with the following requirements:

Mandatory Suffix Based on Entity Type

Private Limited Companies: Must end with “Private Limited.”
One-Person Companies (OPC): Must include “OPC Private Limited.”
Limited Liability Partnerships (LLP): Must conclude with “LLP.”
Section 8 Companies (Non-Profit): Typically include terms such as “Trust,” “Society,” or “Council.”
Public Limited Companies: Must end with “Limited.”
Producer Companies (Agricultural focus): Must include “Producer Company Limited.”

Key Naming Requirements

Uniqueness: The name must not be identical to any already registered company.
No Resemblance: It should not closely resemble existing company names to avoid confusion.
Legal Compliance: The name must comply with all applicable laws.
Government Approval: Names deemed undesirable by the Central Government cannot be used.

Restrictions on Government Association

The company name must not resemble any government authority or imply affiliation with the government.
Approval Requirement: A company name can only be used after receiving approval from the Government of India.

By adhering to these statutory provisions, businesses can ensure that their company name is unique, legally compliant, and officially approved for registration.

Rule 8 of the Companies (Incorporation) Rules, 2014

Rule 8 of the Companies (Incorporation) Rules, 2014 lays down detailed criteria to ensure the uniqueness of company names and prevent confusion under the MCA naming guidelines. Here’s a comprehensive overview:

Identical or Similar Names

Avoiding Resemblance:
Company names that are too similar to existing names are not allowed. Names are considered identical or similar even with minor differences in:

Legal status indicators (e.g., Pvt Ltd vs. LLP)
Singular/plural forms
Uppercase or lowercase letters
Use of definite or indefinite articles
Tense or numbers
Special characters or domain extensions
Spelling and grammar variations
Complete translations between Hindi and English

Minor Alterations:
Small changes to an existing name, such as changing plural forms, spacing, punctuation, letter case, or adding special characters, are insufficient to make a name distinct.

Distinct Legal Status Exception:
Names with different legal statuses (e.g., Pvt Ltd vs. LLP) may be allowed if a No Objection Certificate (NOC) is obtained from the company holding the existing name.

Undesirable Words (Rule 8A)

Rule 8A specifies words and phrases that are not permitted in company names. These include names that:

Are obscene, vulgar, or offensive
Are prohibited under Section 3 of the Names and Emblems Act, 1950
Are already registered as trademarks under the Trademarks Act, 1999
Resemble names or abbreviations of existing or foreign companies reserved in India
Suggest connections with foreign embassies, consulates, or governments
Imply government patronage or are associated with national or international personalities
Are identical to names of companies dissolved within the last two years due to liquidation
Consist solely of the name of a country, continent, state, or city

Words Requiring Government Approval

Certain words require prior approval from the Central Government before inclusion:

Administrative or statutory terms: Board, Federal, Municipal, Forest Corporation, Commission, Republic, Statute, Statutory, Undertaking
Government authorities or leaders: President, Prime Minister, Rashtrapati, Chief Minister, Governor, Union
Schemes or institutions: Panchayat, Development Scheme, Development Authority, Khadi and Village Corporation, Central Financial Corporation, Nation, or any schemes launched by Central or State Government
National terms: National, Bharat, Indian

Additional Naming Conditions

The company name should reflect its business activity, particularly for sectors like finance.
Names that differ only by the addition of a place name are considered invalid.
Names of companies struck off under Section 560 of the Companies Act, 1956 cannot be reused for 20 years from the date of striking off.

Latest MCA Notification – Nidhi (Amendment) Rules, 2024

Date: 16th July 2024
Update: The word “Nidhi” has been removed from clauses (p) and (v) of the Companies (Incorporation) Rules, 2014.
Impact: The revised rules, called Companies (Incorporation) Amendment Rules, 2024, are effective from the date of publication in the Official Gazette.

These regulations ensure that company names are unique, legally compliant, and aligned with public and regulatory standards, preventing misuse and promoting transparency in company registration.

Guidelines on Selecting Similar Names for Companies

When choosing a company name, it’s important to ensure it is sufficiently distinct. Variations involving common expressions or minor spelling changes may not be considered unique. Key considerations include:

1. Minor Variations:
Slight alterations in spelling or using different expressions of an existing company name are generally not enough to distinguish a new company.

2. Abbreviated Names:
While subsidiaries may adopt initials or abbreviated forms of a parent company’s name, joint ventures are generally required to use more descriptive, expanded names, unless specific permission is granted.

3. No-Objection Certificates (NOCs):
If a proposed company name includes personal names, the individuals concerned must provide a NOC. Additionally, documentation proving the relationship with these individuals is required to use their names.

Additional Naming Guidelines for Companies

To ensure a company’s name aligns with its business activities and legal requirements, the following rules apply:

1. Activity-Based Name Updates:
If a company changes its primary business activities, it must update its name to reflect the new activities within six months. This ensures transparency and relevance of the company’s identity.

2. Declaration of Previous Usage:
Companies must disclose if the proposed name has been used by any other business entity within the past five years. This helps prevent confusion or the reuse of names that may carry historical associations.

3. Specific Nomenclature Requirements:
Certain types of companies, such as Section 8 (non-profit) and Nidhi (mutual benefit) companies, must include specific words in their names that accurately represent their legal status and nature of activities.

4. Restrictions After Name Change:
Companies that have changed their names cannot revert to their previous names for three years. This rule helps avoid confusion and allows stakeholders to adjust to the new identity.

Guidelines for Company Names Under the Trademark Act, 1999

When choosing a company name, brand, or logo, it is essential to assess its compliance with trademark laws to avoid legal disputes. The following points outline the key considerations under the Trademark Act, 1999:

1. Definition of a Trademark:
A trademark may consist of a word, business name, logo, symbol, or any other distinctive element that identifies the source of goods or services and differentiates them from others in the market.

2. Legal Protection:
Trademark law safeguards the exclusive rights of trademark owners against unauthorized use. In India, courts strictly enforce trademark protections, and infringement can result in substantial legal and financial penalties.

3. Trademark Search Requirement:
Before finalizing a company name, it is strongly recommended to conduct a trademark search to verify that the proposed name is neither registered nor under pending registration. This step helps prevent conflicts and ensures legal compliance. Platforms such as IndiaFilings provide free trademark search facilities across India.

4. Compliance with Rule 8:
Under Rule 8 of the Companies (Incorporation) Rules, 2009, a proposed company name is deemed undesirable if it contains words or marks that are already registered or pending registration as a trademark. Such a name may only be used if the trademark owner issues a No Objection Certificate (NOC).

By following these guidelines, businesses can minimize legal risks, ensure regulatory compliance, and establish a distinctive and legally protected identity in the marketplace.

Company Name Search

Before starting the company name approval process, it is crucial to conduct a comprehensive name search to confirm that the proposed name is available and not identical or deceptively similar to existing names. This search can be carried out through the Ministry of Corporate Affairs (MCA) website, which provides an online facility to check registered company and LLP names, as well as trademarks.

By entering the proposed name, you can identify whether any existing entities have the same or closely resembling names. Additionally, platforms such as IndiaFilings offer dedicated tools to assist in company name searches, helping ensure that your chosen name is unique, compliant with legal requirements, and suitable for registration.

Process for Company Name Approval and Reservation in India

Securing approval and reservation of a company name is a vital step in the incorporation process in India. This process ensures that the proposed name complies with all regulatory requirements and is reserved exclusively for the applicant. The procedure is outlined below:

1. Filing the Application

Once a suitable company name is selected in accordance with applicable naming guidelines, an application must be submitted to the Registrar of Companies (ROC) along with the prescribed fee.

Applicable Forms:
The form used depends on whether the entity is new or already registered:

RUN (Reserve Unique Name) Form:
Applicable for existing companies or LLPs seeking to change or reserve a new name.
SPICe Plus (INC-32) – Part A:
Used by new companies for name reservation, either as a standalone application or along with incorporation.
FiLLiP Form:
Applicable to new LLPs, combining name approval and incorporation in a single form.

2. Digital Approval Process

The entire name approval and reservation process is conducted online through the Ministry of Corporate Affairs (MCA) portal. The system includes an auto-check feature to verify the availability and acceptability of proposed names, making the process efficient and cost-effective.

3. Procedure Details

RUN Form:
Allows existing companies or LLPs to propose up to two names. Applicants are granted up to two opportunities for resubmission if the names are initially rejected. The application fee is ₹1,000 for companies and ₹200 for LLPs. Upon approval, the name is reserved for 20 days.
SPICe Plus – Part A:
Enables new companies to propose two names with one resubmission opportunity. The fee for filing Part A is ₹1,000.
FiLLiP Form:
This integrated form for LLPs includes name approval and incorporation. The applicable fee varies based on the LLP’s authorized capital.

4. Timeframe and Validity

The name approval process generally takes 2–3 working days. Once approved, the name remains reserved for 20 days from the date of issuance of the Name Approval Letter, during which incorporation must be completed.

5. Name Reservation Outcome

Upon approval, the ROC issues a Name Approval Letter confirming the reservation. If the proposed names are rejected even after permitted resubmissions, a fresh application must be filed with new name options.

By following this process, businesses can ensure compliance with legal requirements and successfully secure their desired company name within the prescribed timeframe.

About the Author

Ravi

Ravi simplifies complex legal matters into practical insights, helping entrepreneurs meet their legal obligations and grow compliant, sustainable businesses,