What are the basic things to avoid while naming a company?June 2, 2021
Choosing a name for the company is one of the most important parts of company registration in India. You and your business are going to be identified by this name. Your name will actually be your first impression. It has incredible power to lend credibility, assure quality and set customer expectations – all with just the name.
It is advisable to always put effort into choosing a name for your company. The company name stands for the brand you are and the brand you will be. In addition to all these obligations, the Ministry of Corporate Affairs has also laid down some regulations that you have to consider while naming your company. This is to ensure that your name is ethically correct and up to the business standard while avoiding duplication. Let’s see what you need to keep in mind before choosing a name for your company registration in India.
How to NOT choose a company name:
If the company name you propose does not fall under the set of rules given by the Ministry of Corporate Affairs (MCA), your application for the name might be rejected.
- a) According to the ministry of Corporate Affairs, owners who are applying for a company name must ensure that your proposed name does not contain words which are prohibited in Section 4(2) & (3) of the Companies Act, 2013.
- b) The applicants are also requested to check the Trademark search to ensure that the proposed name is not in violation of provisions of Section 4(2) of the Companies Act, 2013, failing which it is liable to be rejected.
- c) You can search the MCA database for the company name availability.
https://www.mca.gov.in/mcafoportal/showCheckCompanyName.do. Here you can check for the company name, trademark as well domain.
- d) The name you’re trying for should not be identical to any existing name of a company, or a registered trademark, or a trademark already in the process of registration. The Ministry of Corporate Affairs (MCA) can also reject similar sounding names as it can classify those as being similar, irrespective of the spelling.
- e) The MCA also mentions that the name of the company must have the last word “Limited” in the case of a public limited company, and the words “Private Limited” in the case of a private limited company.
- f) Avoid adding common words to your company name. Words used in everyday life like ‘Om, Sai, Shri, New’ etc. are very common and might cause your company name to be rejected. Remember, the idea is for your company name to be as unique as possible while retaining the brand elements.
- g) If the name you’ve chosen already exists or is in the process of existing, adding a place to the name will certainly not help. For example, if ‘Excalibur’ is an already registered company, ‘Excalibur Pune’ will not be accepted as the name for your new company.
- h) If your company name includes technical terms like like ‘Insurance’, ‘Bank’, ‘Asset Management’, ‘Mutual fund’, ‘Stock Exchange’, ‘Venture Capital’ etc., you are required to get it formalities mandated by respective regulators such as IRDA, RBI, SEBI, MCA, etc., depending on the term.
- i) You aren’t supposed to use the word ‘state’ on your website as it is reserved only for government companies.
- j) Direct translations from Hindi to English or vice-versa are bound to be rejected. Do not translate an already existing company’s name and try using it in your application. It will be rejected.
- k) Abbreviations are not entertained by the Ministry of Corporate Affairs. Avoid using abbreviations like OMG in your applications, as it can get your company name rejected.
- l) Maintain ethical standards. The Ministry of Corporate Affairs will appreciate profanity in no case. Your company name should also not be offensive to any section or group in society.
Besides these basic not-to-dos, you must simply remember one thing. That the name of your company, is not JUST A NAME. It is the identity of your venture and has to resonate with the ideals you possess. Keeping that as your anchor and following all the guidelines by the MCA, you’re good to name your company.