Avoiding Prohibited Company Names
Part of the strategies of entrepreneurs is to make sure they provide a unique business name that would somehow ring a bell. A name recall of sorts, if not authoritatively imposing on how good they are.
Business Company name gives identity & impression to help push the marketability of products or services they’re selling.
However, not all business names are acceptable in India, where some 1.35 billion potential clients live.
As it is, the Ministry of Corporate Affairs (MCA), India’s governing agency on company registrations, deemed it proper and logical to stipulate provisions on matters regarding corporate tags, aptly referred to as Prohibited Company Names.
MCA’s strict guidelines on business name registration are consistent with the Trade Marks Act of 1999. This specifically outlines what business names are not allowable and why such prohibition is necessary.
Provisions under the Trade Marks Act of 1999 is primarily designed to prevent the inconveniences of having to start the business name registration process all over again, just because the desired company name doesn’t fit the law and norms of India.
Undesirable Company Names
India’s Trade Marks Law doesn’t have prohibited company names because they provide what’s to be avoided.
The reinforced version of Emblems and Names is India’s Trade Mark Laws (Prevention and Improper Use) Act of 1950. These laws stipulate that business names are classified as Prohibited Company Names on these following grounds:
MCA considers a proposed business name as a prohibited company name if another corporation has already registered the same or almost the same for their business. This is unless the company which first had it registered executes a formal waiver and consent.
Business names that resemble the abbreviated description of an existing company disallowed by MCA.
A local company is a subsidiary of a foreign company. However, MCA doesn’t allow proposed names that identical or resembles any company name incorporated outside in India.
– MCA likewise deems it proper to decline proposed business names that carry word/s that tend to discriminate. A business name is a prohibited company name if it contains offensive words, regardless of gender, age, religion, race, ideology, social status, and economic standings.
– The government of India also considers deceptive business names as Prohibited Company Name. Allow us to provide some examples.
- Business name registration of Nacho Cheaps Ahoy disallowed by MCA because of food company brand product Nacho Chips that’s been registered and doing local business in India.
- Another example would be: MCA denies registration of Cheat Fund because the name in itself suggests fraud.
- MCA’s turning down of suggested business name registration has nothing to do with their line of business.
- MCA does not approve of company names that connote two or more indicative types of business.
- Likewise, MCA rejects “influence-peddling” business names. The Indian government specifically hints prohibition on the words ‘British India’ as it implies affiliation with an embassy, consulate, or a foreign government.
Business name is comparable to a corporation that’s been dissolved in liquidation proceeding is additionally turned down. Interestingly, identical business name registration could also be allowed by the MCA after a period of two years from the date of the dissolution.
MCA is strict when it comes to business names, especially on those which include generic business terms. A financial institution does not need to include the word “bank” when applying for the business name. Same principle applies in the use of these words: insurance, stock exchange, venture capital, asset management, Nidhi, and mutual fund.
Private companies, as the name connotes, are private in nature and as such, MCA instantly turns down proposed business names which include the word “State” in it.
Playing Safe, Spending Wisely
The process of business registration in itself is time-consuming as it requires compliance with local laws. To avoid doing the process all over again after being declined, it’s logical to commission the task of registering a corporation name to a business advisor with a proven record of excellence.
If you need help to select Indian company name, feel free to contact 3E Accounting.