A Simple Guide to Company Name Registration in India: Everything You Need to Know

Starting a business in India is an exciting journey, but one of the very first steps is selecting a suitable name for your company. This process is more than just being creative; it’s about ensuring that your name is legally compliant, unique, and reflective of your business.

This comprehensive guide will take you through the company name registration process in India with all the important rules, restrictions, and steps involved, while breaking down each point clearly for easy understanding.

When registering a company, you must follow the rules and regulations outlined in the Companies Act 2013. All required documents and forms should be submitted in accordance with these guidelines. The entire company name approval process is done online.

What is Company Name Registration?

Company name registration is the official process of choosing a unique name for your business and getting it approved by the Ministry of Corporate Affairs (MCA).

Your company’s name will be your identity in the business world, and it needs to meet specific legal requirements before it can be used.

It is a necessary first step to legally establish your company and protect your business’s identity.

Required Words to Use at the End of Your Company Name for Approval

When applying for company name approval, there are specific rules about the words to use at the end of your company name.

For a private limited company, the name must end with “Private Limited.” You should not use abbreviations like “Pvt. Ltd.,” “Pvt. Limited,” or “(P) Ltd.,” even though they are commonly used.

For a public limited company, the name must end with the word “Limited.” You cannot use abbreviations like “Ltd.” or any other variations.

In the case of a one-person company (OPC), the name should include “(OPC)” between the company name and the words “Private Limited.” So, the correct format for an OPC is “(OPC) Private Limited.”

These rules are important because they clearly identify the type of company you are registering, whether it’s a private limited, OPC, or public limited company. This helps both the general public and the Registrar of Companies (ROC) understand the company type.

Key Rules for Choosing a Company Name

When it comes to company name registration, there are several essential rules and guidelines that need to be followed. Here are some of the most critical rules you should be aware of when choosing your company name:

• No Identical or Similar Names: Your company name must be distinct and unique. It cannot be identical or too similar to the name of any already existing company or LLP (Limited Liability Partnership). The Ministry of Corporate Affairs (MCA) ensures there is no duplication in company names to avoid confusion.
• No Offensive or Prohibited Terms: The name you choose must not contain any offensive or objectionable terms. The name should be respectful and should not harm public morals, religious sentiments, or hurt the dignity of any individual or group.
• Words Requiring Approval: Certain words in a company’s name need prior approval from the authorities. These include terms like “State,” “National,” “Board,” and “Minister.” If you want to use these terms, you must get the necessary approval before proceeding with the registration.

Restrictions on Company Names

While choosing your company name, it is important to understand the specific restrictions that apply to company names. Below are some key restrictions to keep in mind:

• Names Too Similar to Existing Names: The MCA will reject any name that is identical or too similar to the name of an existing company or LLP. Even small variations like changing punctuation marks, singular/plural forms, or the arrangement of words can lead to rejection.
• Trademark Conflicts: Before finalizing your company name, ensure that it does not conflict with any registered trademarks. You should conduct a trademark search through the Indian Trademark Registry to check if your chosen name is available for registration.
• Misleading or Deceptive Names: The name must not be misleading or suggest activities your company does not engage in. For example, if you name your company “ABC Finance Ltd.” but don’t deal with financial services, this could lead to the name being rejected.
• Government or Judicial Associations: A company name cannot imply any association with the government unless explicitly approved. Similarly, judicial terms such as “Court” or “Judiciary” are restricted and cannot be used unless authorized.
• Generic Names: Generic names or those that are too broad are discouraged. For instance, names like “XYZ Enterprises” or “ABC Traders” are considered too vague and can be rejected as they don’t provide any real distinction.

What Happens If Your Company Name Is Too Similar to Others?

Rule 8 of the Companies (Incorporation) Rules, 2014 states that before approving a company name, it must be checked to see if it is the same as any existing company or LLP name. Differences caused by the following factors should be ignored when comparing names:

• Common Words: Names that include words like “Limited,” “LLP,” “Pvt,” or other similar terms are not considered different.
• Singular vs. Plural: For example, “Green Technology Ltd.” is the same as “Greens Technology Ltd.”
• Punctuation and Spacing: “XYZ Ltd.” is equivalent to “X.Y.Z. Ltd.”
• Different Tenses: “Descend Web Solutions Ltd.” is similar to “Descended Web Solutions Ltd.”
• Phonetic Variations: “Shemdech Ltd.” is similar to “Shemdec Ltd.”
• Domain Extensions: “XYZ Solutions Ltd.” is the same as “XYZsolutions.com Ltd.”
• Word Order: “XYZ Builders and Contractors Ltd.” is the same as “XYZ Contractors and Builders Ltd.”
• Articles: “A Coenial Tours and Travels Ltd.” is the same as “Coenial Tours and Travels Ltd.”
• Spelling Variations: “Color Solutions Private Ltd.” is the same as “Colour Solutions Private Ltd.”
• Complete Translations: “National Steel and Aluminium Corporation Ltd.” is similar to its Hindi counterpart.
• Location Additions: “XYZ Solutions Ltd.” is the same as “XYZ Solutions Mumbai Ltd.”
• Numerical Changes: “XYZ Services Ltd.” is the same as “XYZ10 Services Ltd.”

Avoiding Undesirable Names

As per Rule 8A of the Companies (Incorporation) Rules, 2014, the following cases are considered undesirable names:

• Prohibited Names: Any name that violates the Emblems and Names (Prevention and Improper Use) Act, 1950.
• Trademark Conflicts: Names that include a registered trademark under the Trade Marks Act, 1999.
• Similar to LLP Names: Names that are identical or too similar to those of existing limited liability partnerships.
• Offensive Terms: Any name containing words that could be considered offensive to a particular group.
• “British India”: Proposed names that contain the words “British India.”
• Use of “State”: Names that include the word “State,” unless the company is a government entity.
• Geographic Names: Names that consist solely of a continent, country, state, or city, such as “Asia Limited” or “Germany Limited.”

Restricted Words (Rule 8B)

Some words and phrases need special permission from the Central Government before they can be used in a company’s name. These words are often linked to the government or specific sectors. Here’s a breakdown of these restricted terms:

These words are restricted because they are associated with government functions or specific industries and could mislead people about the nature of the company. Therefore, approval is required before using them in a company name.

Steps to Follow Before Applying for Company Name Registration

Choosing the right name for your company is crucial, and it’s essential to be aware of the potential pitfalls that could lead to rejection. Here’s a simplified guide to help you navigate the process effectively:

• Check for Similar Names: Your proposed name should not be identical or too similar to an existing company or LLP name.
• Avoid Registered Trademarks: Ensure that your proposed name does not include any words that are registered trademarks in relevant classes.
• Describe Your Business Accurately: Make sure you correctly indicate the class, category, or sub-category of your company in the application form.
• Industrial Activity Code: Verify that the activity code aligns with the business objectives stated in the SPICe+ PART A form.
• Common Words: If the name is too descriptive or uses commonly known terms without unique prefixes or suffixes, it may be rejected.
• Significance of Abbreviations: Ensure that any abbreviations used in the name are meaningful and relevant to the business.
• Relevant Terminology: If your name includes words like “Finance,” “Investment,” or “Insurance,” ensure these activities are reflected in your company’s objectives.
• Specificity: Vague objectives such as “manufacturing” or “development of all types of goods” can lead to rejection. Be specific about what your business does.
• Approval Needed: Avoid using words like “Board,” “National,” or “Commission,” which require prior approval from the Central Government.
• Restricted Names: Be aware that names deemed undesirable by the government cannot be used. The system may automatically reject such applications.
• Government Affiliation: If your name suggests a connection with the government or local authorities, you must obtain prior approval.
• Significance of Foreign Names: If your name includes a foreign country, you must provide proof of business relations with that country, such as a Memorandum of Understanding (MOU). Names combining India with a foreign country are allowed only with government participation.

By following these precautions, you can significantly reduce the chances of your name application being rejected. Always conduct thorough research and ensure compliance with regulations to make the process smoother.

The Company Name Reservation Process

When starting a new company or changing an existing company’s name, you must go through a name reservation process. Here’s a clear breakdown of how it works according to the Companies Act.

How to Apply for Name Reservation

To reserve a company name, you can use the SPICe+ web-based service (Simplified Proforma for Incorporating Company Electronically Plus) or the RUN (Reserve Unique Name) service. You need to submit:

• The name of the proposed company, or
• The name you want to change to.

Make sure to include the required fee with your application.

What is the Process for Reserving or Changing a Company Name?

In India, you can reserve a name for your new company or request a name change for an existing one using online services provided by the Ministry of Corporate Affairs (MCA). There are two main options:

• SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus): Used for new company name reservations. This form also helps you register your company, get a Director Identification Number (DIN), and complete other mandatory registrations like PAN, TAN, EPFO, ESIC, and GSTIN.
• RUN (Reserve Unique Name) Service: Used when you want to change the name of an existing company.

Step-by-Step Guide to Name Reservation

For a New Company (Using SPICe+):

When you’re starting a new company, you’ll need to apply for a name reservation. Here’s how you can do it:

• Part A and Part B: When filling out the SPICe+ form, you can either submit Part A to reserve a name only or submit both Part A and Part B if you’re ready to incorporate your company as well.
• Part A is for selecting a company name, while Part B is used for the actual incorporation process.
• Important Note: The name reservation through SPICe+ is valid for 20 days. If you don’t complete the process within this time, you’ll need to apply again.

For an Existing Company (Using RUN):

If you already have a company and want to change its name, you can do so by using the RUN service. Here’s what you need to know:

• Two Names: You can propose two names for the name change request. The MCA will check if these names are available.
• Resubmission: If your application is rejected, you can resubmit the request once.
• Validity: The approval for a name change is valid for 60 days, meaning you must complete the process within this time frame.

What Makes a Good Company Name?

When you are reserving or changing your company name, it’s important to choose a name that not only reflects your business but also complies with the MCA’s guidelines. Here are the key criteria for selecting a name:

• Uniqueness: Your company name must be distinct and unique. It cannot be identical or too similar to another existing company or Limited Liability Partnership (LLP). This helps avoid confusion and legal issues.
• Descriptive: The name should give a hint of what your business is about. Ideally, it should include a noun and an activity word that describes the main objective of your company. For example, “Tech Innovations Pvt. Ltd.” is descriptive of a company involved in technology.
• Compliance: Ensure your name follows the rules set by the Ministry of Corporate Affairs. There are certain words and terms you cannot use in your company name.

Duration of Name Reservation

According to Section 4(5):

• Once your application is received, the Registrar may reserve the name for 20 days from the date of approval.
• If you are applying to change the name of an existing company, the name can be reserved for 60 days from the date of approval.

Common Reasons for Name Rejection

Your name reservation application may be rejected for several reasons, including:

• Mismatch with Main Activities: The proposed name does not align with the activities described in the company’s objectives.
• Similarity to Existing Names: The name is too similar to existing companies or LLPs.
• Generic Names: The proposed name lacks distinctiveness and is too general.
• Improper Use of Keywords: Words like “Industry,” “Enterprises,” or “Manufacturing” may not be used unless they reflect specific business activities.
• Justification for Certain Terms: Words like “International,” “India,” or “Corporation” are not permitted unless justified by the business scope.
• Undesirable Words: Names containing words such as “National,” “Central,” “Union,” or “Federal” are not allowed.

Consequences of Providing Incorrect Information

If you provide incorrect or misleading information during the name reservation process, it can lead to:

• Rejection of the Name: The MCA will not approve the name if the details are inconsistent or incomplete.
• Delay in Company Incorporation: Errors in the name reservation application can delay the overall process of company incorporation.

You could face a penalty of up to one lakh rupees.

Can You Change the Company Name After Registration?

Yes, changing your company name after registration is possible, but it requires following a formal procedure, including:

• Board Resolution: A resolution must be passed by the board of directors.
• Approval from MCA: After the board’s approval, you will need to apply for name change via the RUN service.
• Stakeholder Notification: All stakeholders must be informed, and business records must be updated with the new name.

Things to Keep in Mind

Always suggest two names when reserving a company name. This increases your chances of getting your name approved on the first try.

Remember, once your company name is approved, you have limited time to complete the process:

• New companies: The name is valid for 20 days.
• Name changes for existing companies: The name is valid for 60 days.

If your first name reservation request is rejected, you are allowed to resubmit once with new name options.

ROC Power for Cancellations and Penalties

If, after approval or reservation, it is discovered that a company name was applied for using incorrect or false information, the Registrar of Companies (ROC) has the authority to cancel the name. The person responsible for submitting the incorrect details may be liable for a penalty, which can extend up to Rs. 1,00,000.

If a company has already been registered with a name obtained through false information, the ROC, after giving the company an opportunity to be heard, may either:

• Direct the company to change its name
• Strike the name off the Registrar of Companies records
• File a petition for the company’s winding-up

It’s important to note that company registration does not grant you the right to use that name as a trademark. To protect your brand, it’s advisable to apply for trademark registration for the appropriate class of goods or services.

After the company is registered, make sure to display the exact company name on all business documents, such as letters, notices, invoices, publications, and receipts. The company name should also be clearly displayed outside the registered office.

If you need assistance with the MCA name approval procedure and company registration, consider seeking the services of a practicing chartered accountant, company secretary, or advocate. These professionals can guide you in getting your desired name approved and help you through the company incorporation process. It’s recommended to choose a professional who has experience in company registration services.

Final Thoughts on Reserving or Changing Your Company Name

Reserving or changing your company name in India is an essential part of the business registration process. By following the guidelines set by the Ministry of Corporate Affairs and ensuring that your company name is unique, descriptive, and compliant, you can avoid delays and legal issues.

To ensure your company name stands out, use the SPICe+ or RUN services, and always double-check that your name aligns with the MCA’s rules. With these steps, you’ll be on your way to successfully reserving or changing your company name.

For more detailed information on company name reservation and changes, visit the MCA website or consult with a professional to guide you through the process.

Also Read: Post Incorporation Compliance for a private limited company