A Name Can Be A Distinct Identity Or Creation Of Deception

inbatv Articles, India, Legal Reforms

Name of a company/entity plays a key role in running of its activities as it provides a distinct identity to the business from its competitors.

Also, a similar/ identical name can be used for deception, malpractices and conduct fraudulent activities, therefore laws have been made for regulating that what shall be the ‘Name’ of any entity.

The name of a company/entity should be

  • Unique
  • Contain a noun and activity word that reflects the objective
  • In line with Company Name Guidelines issued by Ministry of Corporate Affairs

The Company/entity name should not be

  • Same, similar, identical or resembling to the name of an existing company or LLP registered. Phonetically similar names are also to be provided.
  • Similar of a registered trademark or trademark for which an application is filed.
  • Offensive
  • Undesirable in opinion of Central Government

Section 4 of Companies Act deals with Memorandum under which it is prohibited to use resembling names for incorporation of a company to an existing company and it shall not be undesirable. The name should not be such that to indicate connection with or patronage of Government.

Under Section 16 of Companies Act, 2013, if a company makes default in complying with any direction given by Central Government regarding name clause, the company shall be punishable with fine of one thousand rupees for every day during which the default continues and every officer who is in default shall be punishable with fine which shall not be less than five thousand rupees but which may extend to one lakh rupees.

The Ministry of Corporate Affairs amended the Companies (Incorporation) Rules,2014 on 10th May 2019 and the amendment was applicable from the date of publication in the Official Gazette.

Rule 8 of the Companies (Incorporation) Rules,2014 has been substituted with the following guidelines-

8. Names with resemble too nearly with the existing company

A company name applied for shall be deemed to resemble too nearly with the name of an existing company, if and only, if, after comparing the name applied for with the name of an existing company by disregarding certain matters as described below, the names are same.

The matters to be disregarded while comparing the names are:

a) The words like Private, Pvt, (P), OPC Pvt. Ltd, IFSC Limited, IFSC Pvt Limited, Producer Limited, Limited, Unlimited, Ltd, LLP, Limited, Liability Partnership, Company, & Co, co., Corporation, corp, corpn, corp or group.

b) The plural or singular form of words in one or both names.

Illustration- Green Technology Ltd is same as Greens Technology Ltd and Greens Technologies Ltd

c) Type and case of letters, spacing between letters, punctuation marks and special characters used in one or both names.

Illustration- ABC Ltd is same as A.B.C Ltd and A B C Ltd.

d) Use of different tenses in one or both names.

Illustration- Ascend Solutions Ltd is same as Ascended Solutions Ltd and Ascending Solutions Ltd.

e) Use of different phonetic spellings including use of misspelled words of an expression.

Illustration- Chemtech Ltd is same as Chemtec Ltd , Chenitek Ltd, Cemtech Ltd, Chemtek Ltd. and Kemtech Ltd.

f) Use of host name such as ‘www’ or a domain extension such as ‘net’ ‘org’ ‘dot’ or ‘corn’ in one or both names.

Illustration- Ultra-Solutions Ltd. is same is Ultrasolutions.com Ltd.

g) Order of words in the names.

Illustrations- Ravi Builders and Contractors Ltd is same as Ravi Contractors and Builders Ltd.

h) Use of definite or indefinite article in one or both names.

Illustration- Congenial Tours Ltd. is same as A Congenial Tours and The Congenial Tours Ltd.

i) A slight variation in the spelling of the two names including a grammatical variation thereof.

Illustration- Color Technologies is same as Colour Technologies

j) Complete translation or transliteration and not part thereof of and part thereof of an existing name, in Hindi or in English.

Illustration- National Electricity Corporation Ltd. is same as Rashtriya Vidyut Nigam Ltd.

k) Addition of the name of a place to an existing name, which does not contain the name of any place.

Illustration- If Salvage Technologies Ltd is an existing name, it is same as Salvage Technologies Delhi Ltd or Salvage Delhi Technologies Ltd.

l) Addition, deletion or modification of numerals or expressions denoting numerals in an existing name, unless the numerals represent any brand.

Illustrations- Thunder Services Ltd. is same as Thunder 11 Services Ltd and One Thunder Services Ltd.

Provided that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names, if a no objection by way of a Board resolution has been provided by an existing company.

8A. Undesirable Names

Rule 8A provides a list of names which are undesirable names if Prohibited under any act, offensive, identical or similar to existing name, not indicative of the business, etc.

8B. Words or Expressions which can be used only after approval from Central Government

The following words and combinations thereof shall not be used in the Name of a company in English or any languages depicting the same meaning unless the previous approval of the Central Government has been obtained for the use of any such word or expression:

  • Board
  • Commission
  • Authority
  • Undertaking
  • National
  • Union
  • Central
  • Federal
  • Republic
  • President
  • Rashtrapati
  • Small scale industries
  • Khadi and Village Industries Corporation
  • Municipal
  • Panchayat
  • Development Authority
  • Prime Minister or Chief Minister
  • Minister
  • Nation
  • Forest corporation
  • Development Scheme
  • Statute or Statutory
  • Court or Judiciary
  • Governor
  • Use of word Scheme with name of Government (s), State, India, Bharat or any Government authority or in any manner resembling with the schemes launched by Central, State, or local Governments and authorities and
  • Bureau

Applicable Circulars

Circular 2/2014 dated 11/02/2014 was issued by Ministry of Corporate Affairs that

No company should be allowed to register with the word ‘National’ as part of its title unless it is a government company and Central/ State Government have stake in it. This should be stringently enforced by all Registrars of Companies (ROCs) while registering companies.

There are many entities and associations using the word ‘National’ in their name which is strictly prohibited by the government and can be used only with prior approval or compliance of its pre-conditions mentioned in the circular.

Therefore, all the laws, regulations and rules must be complied for ‘Name’ of any company or entity for its lawful conduct.

Kaviraj Singh

Editorial Committee