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Forming a new company or LLP? Here are guidelines to select name of your company / LLP.

Now a days, it is easy to register a Private Limited company or a LLP than selecting a name (literally). Unless you are applying for reservation of name which is already part of your group companies / or is a trademark owned by you, it is a difficult to get the name you want.


While applying for reservation of company/LLP name one must follow the guidelines issued by the Government. In this post we have compiled the various guidelines and practical tips to ensure the name reservation application is approved without hassles.


Before going into technical language, please note the following major rules must be followed:



1. To avoid rejection the Name must indicate the purpose or object of the company, though it is not prescribed in the Act. For example if you have a name "XYZ LLP" you should consider it making as "XYZ Tax Services LLP" so the major objectives are reflected in name.


2. Any of the directors who is applying for Name or involved in incorporation later, must not be disqualified under the companies Act 2013. This may lead to rejection of a even a valid name.


3. Once the name gets approve, Apply for incorporation within 60 days of such name approval, because after the expiry of this term name will got expire and company cannot be incorporated in such name.


4. The first word of the proposed name should not belong to any existing company or LLP. It should also not be a part of trademark.


LEGAL PROVISIONS:


Pursuant to the provisions of Rule 8 (Undesirable names) of the Companies (Incorporation) Rules 2014:


(1) In determining whether a proposed name is identical with another, the differences on account of the following shall be disregarded-


(a) the words like Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership;


(b) words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.;


(c) plural version of any of the words appearing in the name;


(d) type and case of letters, spacing between letters and punctuation marks;


(e) joining words together or separating the words does not make a name distinguishable from a name that uses the similar, separated or joined words;


(f) use of a different tense or number of the same word does not distinguish one name from another;


(g) using different phonetic spellings or spelling variations shall not be considered as distinguishing one name from another. Illustration (For example, P.Q. Industries limited is existing then P and Q Industries or Pee Que Industries or P n Q Industries or P & Q Industries shall not be allowed and similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also;)


(h) misspelled words, whether intentionally misspelled or not, do not conflict with the similar, properly spelled words;


(i) the addition of an internet related designation, such as .com, .net, .edu, .gov, .org, .in does not make a name distinguishable from another, even where (.) is written as ‘dot’;


(j) the addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc. does not make a name distinguishable from an existing name and similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed; such names may be allowed only if no objection from the existing company by way of Board resolution is submitted;


(k) different combination of the same words does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of “Builders and Contractors Limited”, the name “Contractors and Builders Limited” shall not be allowed unless it is change of name of existing company;


(l) if the proposed name is the Hindi or English translation or transliteration of the name of an existing company or limited liability partnership in English or Hindi, as the case may be.


(2) (a) The name shall be considered undesirable, if-


(i) it attracts the provisions of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950);


(ii)it includes the name of a trade mark registered or a trade mark which is subject of an application for registration under the Trade Marks Act, 1999 and the rules framed thereunder unless the consent of the owner or applicant for registration, of the trade mark, as the case may be, has been obtained and produced by the promoters.


(iii) it includes any word or words which are offensive to any section of the people;


(b) The name shall also be considered undesirable, if-

(i) the proposed name is identical with or too nearly resembles the name of a limited liability partnership;


(ii) (this clause is no more relevant)


(iii) the company’s main business is financing, leasing, chit fund, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund or Investment or Loan, etc.;


(iv) it resembles closely the popular or abbreviated description of an existing company or limited liability partnership;


(v) the proposed name is identical with or too nearly resembles the name of a company or limited liability partnership incorporated outside India and reserved by such company or limited liability partnership with the Registrar:

Provided that if a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is may be allowed with the addition of word India or name of any Indian state or city, if otherwise available;


(vi) any part of the proposed name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof e.g. co-operative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.;


Explanation.- For the purposes of this sub-clause, it is hereby clarified that the name including phrase ‘Electoral Trust’ may be allowed for Registration of companies to be formed under section 8 of the Act, in accordance with the Electoral Trusts Scheme, 2013 notified by the Central Board of Direct Taxes (CBDT):


Provided that name application is accompanied with an affidavit to the effect that the name to be obtained shall be only for the purpose of registration of companies under Electoral Trust Scheme as notified by the Central Board of Direct Taxes;


(vii) the proposed name contains the words ‘British India’;


(viii) the proposed name implies association or connection with embassy or consulate or a foreign government;


(ix) the proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in Government;


(x) (this cause is omitted)


(xi) the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding and a period of two years have not elapsed from the date of such dissolution:

Provided that if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 248 of the Act or under section 560 of the Companies Act, 1956(1 of 1956), then the same shall not be allowed before the expiry of twenty years from the publication in the Official Gazette being so struck off;


(xii) it is identical with or too nearly resembles the name of a limited liability partnership in liquidation or the name of a limited liability partnership which is struck off up to a period of five years;


(xiii) the proposed name include words such as ‘Insurance’,‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., unless a declaration is submitted by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with by the applicant;