How to Correctly Choose Your New Business NameJuly 20, 2017
Naming a company might seem like a small, insignificant step, but most brand consultants will tell you that it is critical for your business. A good name could be all the difference between running an average company and building a well-known brand.
In India, the process of naming a company is strictly regulated. A company name falls under the purview of two major legislations: Companies Act, 2013 and Limited Liability Partnership Act, 2008.
As per these laws, the name of a company can be divided into three main parts:
- The name
- The object
- The constitution
For example, if the name is XYZ Solutions Private Limited, then ‘XYZ’ forms the Name, ‘Solutions’ is the Object and ‘Private Limited’ is the Constitution. Let us look at each part individually.
These are the requirements for an acceptable company name —
- It should be unique.
- It should not resemble, look, or sound like an existing company, especially if the two are in the same industry.
- It should not willfully hurt public sentiment (this is suggested, but not warranted by law).
The ‘object’ of the company’s name defines the kind of work the company is doing. It comes into play when two or more companies have the same or similar name.
Usually, two companies are allowed to bear the same name if their ‘object’ is different and they belong to different industries. For example, ABC Manufacturing and ABC Travels can both be allowed to register.
Here are some of the most commonly used ‘objects’ in company names: Aviation, Construction, Containers, Designs, Foods, Holding, Hospital, Hotel, Information, Motors, Power, Steel, Technology, Textiles, Trading, etc.
This part of the name denotes the kind of structure the company is going to follow in its day-to-day operations. A company can be registered as any one of the following:- Private Limited Company — Pvt. Ltd. Company
- Private Limited Company — Pvt. Ltd. Company
- Limited Company — LTD. Co.
- One Person Companies — OPC
- Limited Liability Partnership — LLP
- Sole Proprietorship Firm
- General Partnership Firm
When deciding a name, you should also be mindful of the criteria for declaring the name ‘undesirable’, which will disqualify it from being registered. To prevent that from happening to you, keep these pointers in mind:
- It should not violate any provision mentioned in Section 3 of the Emblems Act, 1950.
- It should not violate any existing trademarks or patents.
- It shouldn’t be an offensive word or one that might be construed as offensive by a section of the people.
As is evident by now, there is a lot more to name a company than meets the eye. Therefore, we suggest you pay proper attention to these laws and come up with a unique name that can stand as a brand for future generations.