As we know, the process for name approval for companies is governed by Rule 8 of Chapter II of The Companies (Incorporation) Rules, 2014. Understanding these rules is crucial to prevent the rejection of name applications. Below is a summarized overview of the rules to assist you in obtaining name approvals.
1. Names Resembling Existing Companies
A proposed name is considered too similar to an existing company’s name if they are identical after ignoring certain factors:
- Common Terms: Ignore words like Private, Ltd., and LLP.
- Singular/Plural Forms: Both forms are treated the same.
- Letter Variations: Disregard differences in case, spacing, and punctuation.
- Tenses: Different verb forms are considered the same.
- Spelling Variations: Phonetic or minor spelling differences don’t count.
- Domain Extensions: Names with extensions like .com or .org are treated as similar.
- Word Order: The arrangement of words is irrelevant.
- Articles: The presence of “the” or “a” doesn’t affect similarity.
- Translation: Complete translations of names are treated as identical.
- Place Names: Adding a location to a name that originally has none is not considered different.
- Numerals: Changes to numerals are ignored unless they represent a brand.
Note: In few cases a no objection by way of a Board resolution if provided by an existing company may be allowed.
8A. Undesirable Names
A proposed name is considered undesirable if it meets any of the following criteria:
- Legal Violations: The name conflicts with the Emblems and Names (Prevention and Improper Use) Act, 1950, unless prior permission has been obtained.
- Trademark Issues: It includes a registered trademark in the same class of goods or services without the owner’s consent.
- Offensive Language: The name contains words that may offend any group of people.
- Similarity to Existing Entities: It closely resembles the name of an existing limited liability partnership or company, making it potentially misleading.
- Reserved Names: It is identical or too similar to a name that is currently reserved with the Registrar.
- Inaccurate Representation: If the company’s main activities relate to finance or investments, but the name does not reflect those activities (e.g., not including terms like “Chit Fund” or “Investment”).
- Misleading Description: The name suggests activities that do not align with the company’s actual business.
- Popular Descriptions: It resembles the abbreviated or popular description of an existing company or limited liability partnership.
- Foreign Names: It is identical or too similar to the name of a company incorporated outside India that is reserved in India.
- Specific Business Terms: It includes words suggesting a particular legal structure (e.g., cooperative, LLP) without proper justification.
- Prohibited Phrases: It contains “British India,” suggests association with foreign embassies, or implies connection to a national hero or prominent individual.
- Recent Dissolution: It is identical to a name of a company that was dissolved within the last two years, unless it has been struck off for twenty years.
- Limited Liability Partnerships: It is identical to a name of a limited liability partnership that has been liquidated or struck off within the past five years.
- Regulatory Terms: It includes terms like “Insurance,” “Bank,” or “Stock Exchange” without meeting regulatory requirements.
- Government Implication: The name includes “State” if the company is not a government entity.
- Geographical Names: It consists solely of the name of a continent, country, state, or city.
- Descriptive Nature: The name is purely descriptive, meaning it only consists of commonly used words to describe an activity, without any additional distinctive elements.
- Foreign Associations: It includes names of foreign countries or cities without proof of significant business relations.
- Section 8 Companies: It does not contain specific terms like Foundation, Forum, or Association as required for Section 8 companies.
- Recent Name Changes: It has been released from the company register due to a name change within the last three years, unless specifically directed by an authority.
8B. Words Requiring Central Government Approval
Under clause (b) of sub-section (3) of section 4, the following words and phrases cannot be included in a company name without prior approval from the Central Government:
- Board
- Commission
- Authority
- Undertaking
- National
- Union
- Central
- Federal
- Republic
- President
- Rashtrapati
- Small Scale Industries
- Khadi and Village Industries Corporation
- Financial Corporation
- Municipal
- Panchayat
- Development Authority
- Prime Minister
- Minister
- Nation
- Forest Corporation
- Development Scheme
- Statute or Statutory
- Court or Judiciary
- Governor
- Any variation of “Scheme” in relation to government entities.
- Bureau
These restrictions ensure that the use of such terms does not mislead the public regarding the company’s nature or affiliations.
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