COMPANY FORMATION

Company incorporation in Gurgaon

Guidelines for Name Approval

Guidelines for availability of names issued by Ministry of Corporate Affairs

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The following guidelines have been set up by The Department for determining the availability of names:

Any name which is seen to be spoken for by any of the ensuing categories shall not be made available:

If it is not in concurrence with the chief objectives of the firm as established in its memorandum of association. This of course applies for names which already indicate the nature of business the firm is going to indulge in, as every name cannot be an indicator of the objects of a company.

  1. If the Company/Companies primary area of operation is finance unless the name is indicative of the respective financial activities. Viz. Chit Funds/ Investments / Loan, etc.
  2. If it contains any word or words which cause any segment of the population to take offense
  3. If the English name of an already existing company, especially one well known in its field, is simply translated into Hindi.
  4. If the proposed name sounds similar to an already existing company for example, J.K Industries Ltd., Jay Kay Industries Limited.
  5. If the name is generic like Cotton Textile Mills Ltd., or Silk Manufacturing Ltd., and nonspecific like Calcutta Cotton Textiles Mills Limited or Lakshmi Silk Manufacturing Company Limited.
  6. If it contains the word "Co-operative", Sahakari or any other equivalent of word "Co-operative" in any of the regional languages of India.
  7. If it is in contempt of the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time, i.e. use of inappropriate names disallowed by this Act..
  8. If it implies the participation of the Government or its support unless situations indicate it. E.g., a name may be seen to be improper in a particular context if it includes any of the words including but not limited to National, Union, Central, Federal, Republic, President, Rashtrapathi, Small- Scale Industries, Cottage Industries and Financial Corporation etc.
  9. If the words "British India" are included in the proposed name..
  10. If the proposed name connotes any sort of association or connection with Embassy or Consulate or with local authorities such as Municipal, Panchayat, Delhi Development Authority or any other body connected with the Union or the State Government.
  11. If the proposed name is obscure and not clear, like D.J.M.O Limited or T.N.V.R Private Limited or S.S.R.P Limited.
  12. If a proposed name indicates any association or link with or support of a person known throughout the country, or a hero or any person held in regard or important people who are on vital positions in Government so long as they continue to hold such positions.
  13. If it is similar to the well-known or shortened descriptions of significant firms like TISCO (Tata Iron and Steel Company Limited), HMT (Hindustan Machine Tools), ICI (Imperial Chemical Industries), TEXMACO (Textile Machinery Corporation), WIMCO (Western India Match Company) etc. Sometimes, the first or initial words may be the key words and thus should be guarded against any misuse. Even if they haven’t been registered as trademarks, such words should be disallowed.

      a) In cases where the pre-existing firms are known to be reputed and famous in their respective spheres of operation by their abbreviated names, these companies may be given permission to alter their names, by way of abbreviation with the permission of the concerned Regional Director.

  14. If the only difference between the name/names of the existing company/companies and the proposed name is only the name of a place within brackets before the word 'limited' for example, Indian Press Limited. Howbeit, this is waived in cases of the subsidiary and also of a firm doing local business and in other cases on their merits. As for an example, "Corner Garage (Delhi) Private Limited" may be allowed even though it is known, that there is an already registered company "Corner Garage Private Limited" at Calcutta. The same would be with "Regent Cinema Limited" at Chennai, and the subsequently named Regent Cinema (Delhi) Limited. Coming under the same umbrella of management also permits such names to be granted.
  15. If generic and common words are included in the proposed name, like "Popular, General, Janta", and if they are present in the same State or in the same field of business. But when companies deal in different businesses while being in the same State and in every case when the official registered office of the firm is in different States, the rule may be waived. For example, if "Popular Drug House Private Limited" is already in operation, another company by the name of "Popular Plastics Private Limited" should not be hindered in being named so.
  16. If the name of a registered trade-mark is included, unless the permission of the holder of the trade-mark has been furnished by the promoters. It may not be feasible to check up the proposed named with the trade mark in every single case. Nevertheless, if the Registrars are aware of the fact or some interested party / parties brings it to their attention that a trade mark is included in the proposed name then it should be disallowed, until and unless a no-objection certificate is obtained from the owner who has registered the trade mark in his own name. [Note: Section 20(2)/ (3) has been amended by the Trade Marks Act, 1999. The amended section now provides legal protection of all trademarks in the matter of availability of name.
  17. If a name is similar to or closely resembles, the name of which an already existing, pre-registered company. A few examples of closely resembling names are shown below for help in determining such similarities. The names wished for in the left column should not be usually made available in view of the existing firms, as shown in the column on the right. However, if the to be named company is supposed to function the same management or in the same business group and like to have a highly similar name to the existing companies under the same administration or group with to exploit the reputation and public image attached to the management or group name, then such a name may be allowed.

    The same principle may be followed, in every case possible, even with regard to unregistered companies or companies who have built up a reputation over a substantial period of time. If the name is identical with or too similar to the name by which a company has been previously registered and is in operation, it should not be permitted. In light of the difficulties and ambiguities associated with determining whether a proposed name is similar to or too nearly resembles the name of an unregistered firm or a company of repute, the least that can be done is to make sure that a proposed name is not accepted if according to the knowledge of the Registrar, it is similar to or too nearly resembles the name of a pre-registered pre-existing firm. Foreign companies with sizeable reputation should be treated likewise, irrespective of the presence of branches in India.

    Proposed Name Existing Company too nearly resembling name
    Hindustan Motor and General Finance Company Hindustan Motor Limited
    The National Steel Mfg. Co. Private Limited National Steel Works
    Trade Corporation of India Limited State Trading Corporation of India Limited
    Viswakaram Engineering Works Private Limited Viswakaram Engineer (India) Private Limited
    General Industrial Financing & Trading Co. Ltd. General Financial & Trading Corporation
    India Land & Finance Limited Northern India Land & Finance Limited
    United News of India Limited United Newspaper Limited
    Hindustan Chemicals and Fertilizer Limited Hindustan Fertilizers Limited
  18. If it bears a striking resemblance to the name of a firm in the process of being liquidated, since until the liquidation has been carried out to completion the name of the company is still present on the register. A two year window shall be established before allowing the name of such liquidated firms are allowed to be taken up by new companies, or names similar to or resembling the liquidated companies name are permitted to be used by new firms, since such a dissolution could be nullified by a Tribunal order as given under section 356 of the 2013 Act.

    Since the Tribunal can allow the revival of a firm which has been completely liquidated under the provisions of section 356 of the Act within a 20 year period from the date of the Official Gazette that declares the name to be struck off, it is considered good practise to halt or allow the registration of a proposed name which is similar to or identical with the name of such dissolved company for a period indicated below, with certain specific restrictions. 20 years is a significant length of time by any standard and thus the acceptance of a name that is similar to or identical with the name of a company that has been dissolved in light of the provisions of section 560 should be held back for the first five years only. During the next five years if such similar or identical name is proposed, it should be allowed subject to the provision that in the event of the dissolved firm coming back to operation due to a juridical order, the new firm would necessarily have to alter its name. After the succeeding decade, such similar or identical names may be permitted freely and without restraint.
  19. If the only dissimilarity between the name of an existing company and the proposed name is merely the appending of words like New, Modern, Nay etc. such names should not be permitted. Relevant examples are New Bata Shoe Company, New Bharat Electronic etc. when the same words are ordered in a different sequence, it should draw the attention of the registering authorities. A point in case may be, if there is a company in existence by the name of “Builders and Contractors Limited” the name "Contractors and Builders Limited" should be disallowed in non-extenuating circumstances.
  20. If words like "Bank", "Banking", "Investment", "Insurance" and "Trust" are added to the name which may be permitted only in cases which vindicate its use. The advice of the Reserve Bank of India should be taken into consideration when banking companies apply for registration of a name. This is to prevent the misuse of the name of established and well known banks operating outside India, by smaller banking entities. When the opinion of the Reserve Bank of India is in conflict, the issue should be decided upon by the Board.
  21. If the proposed name also includes the words "Industries" or "Business" unless the name points to the business of the proposed company, otherwise it allows for easy diversification of the operations of the company.
  22. If the name is not in concordance with the scope or scale of operations of the firm and suggests much larger commitments than its resources allow for. For example, names like Water Development Corporation of India (Private) Limited, Telefilm of India (Private) Limited, All India Sales Organization Limited, Inter Continental Import and Export Company Limited, etc. should be disallowed. When the authorized capital is limited to a few lakh and the operating territory is to be confined to a single State, words like "International", "Hindustan", "India", "Bharat", "New India" etc., included in the proposed name do not need be validated as Hindustan, India etc. (as they do not give the same sense). Likewise the words, Bharat, India etc. If mentioned in the bracket prefixing the words limited or private limited need not undergo the same rigorous checking as the words India, etc., put at the beginning of the name. The words "India" or "Bharat" in brackets before the words Limited or private limited does not connote that the firm is an Indian Branch or subsidiary of some foreign company, such as "Marsdon Electricals (India) Private Limited".

    If the proposed name sets the word "State" along with the name of any State of the Union of India, such as Kerala State Company Limited, itis not to be authorized as it would give the false impression of the Kerala State Government being a participatory body in the share capital of the proposed firm. Nevertheless, if only the name of the State only is stated without appending the word "State" in the proposed name then it may be given permission as it is not expected to show that the State Government has any interest whatsoever in the firm.

    If the name states the word "Corporation" unless official records officially prove the expanse of the company. That being said, the word "Corporation" and "Company" may be assumed to be highly similar and too closely resembling for purposes of allotting a proposed name. For example, a firm with the name of Rajasthan Finance Company should be regarded as disagreeable in the light of section 20 of the Act as another company by name "Rajasthan Finance Corporation" is already in operation.
    If the proposed name includes words which signify any foreign associations or participation, like French, British, German, etc., until and unless the promoters furnish proof that there is a sort of alliance or link with the foreigners of the respective firm or place the name of which is incorporated in the name. Thus, the name "German Tool Manufacturing Company Limited" should not be authorized if the firm does not show any visible linkage with the nation of Germany.

    In cases where other than the first word of the new name, all other words are either similar to or resemble closely the name or names of already preregistered and pre-existing firms, the first word’s ability to differentiate the name from the name of the existing company should be recognized and allowed for. For example, "Oriental... Limited". [Circular Letter No. 10(1) - RS/65, dated 27-11- 2965.
Guidelines as to use of Key words

With a view to maintain uniformity, the following guidelines may be followed in the use of keywords, as part of name, while making available The proposed names under section 4 of Companies Act, 2013:

S.No Keywords Required Authorized Capital
1. Corporation Rs. 5 Crore
2. International, Globe, Universal, Continental, Inter Continental, Asiatic, Asia being the first word of the name Rs. 1 Crore
3. If any of the words at (2) above is used within the name (with or without brackets) Rs. 50 Lakh
4. Hindustan, India, Bharat being first word of the name Rs. 50 Lakh
5. If any of the words at (4) above is used within the name (with or without brackets) Rs. 5 Lakh
6. Industries / Udyog Rs. 1 Crore
7. Enterprises, Products, Business, Manufacturing Rs. 10 Lakh

These names with key words mentioned in Serial Nos. (6) And (7) may not be considered unless the company proposes to deal in different spheres of business or the company is presently conducting business on multiple fronts (in the case of change of name). F. No. 27/1/87-CL- III dated 13-03- 1989: (1989) 65 com cases 536 (St.)