Guidelines for Selecting Company Name

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Hiral Vakil

PLC
Start & Run Business
Last updated on May 18th, 2020

Selecting your company name is one of the first and most important decisions you make when you venture into your business. After all, you want the company as well as its name to be part of your life for a long time to come. However the Companies Act, 2013 has detailed guidelines, restricting the words you could use as your company name, i.e. Private Limited, One Person Company or Limited Liability Partnership.

Basic Provisions as per Companies Act, 2013

The name of company shall end with the words “Limited (Ltd.)” in case of a Public Limited Company, “Private Limited (Pvt. Ltd.)” in case of a Private Limited Company, “Limited Liability Partnership (LLP)” or in case of a Limited Liability Partnership and “One Person Company (OPC)” in case of a One Person Company.

Requirement of Minimum Authorized Capital for use of Certain Words

The use of certain pre-determined words in the name of a company require the proposed company to mandatorily have a minimum amount of authorized capital for registration of company. The table details the words and the amount of minimum authorized capital required to incorporate those words in the name.

Words Minimum Authorized Capital Required
Corporation Rs. 5 Crore
International, Globe, Universal, Continental, Inter-Continental, Asiatic, Asia being the first word of the name Rs. 1 Crore
Industries / Udyog Rs. 1 Crore
If International, Globe, Universal, Continental, Inter-Continental, Asiatic, Asia is used within the name (with or without brackets) Rs. 50 Lakhs
Hindustan, India, Bharat being the first word of the name Rs. 50 Lakhs
Enterprises, Products, Business, Manufacturing Rs. 10 Lakhs
If Hindustan, India, Bharat is used within the name (with or without brackets) Rs. 5 Lakhs

Your Company name can not be similar to another registered Company’s name

Your company needs to have a unique name. A proposed name for a company should not be same, identical or resemble too closely to the name of an existing corporate body. To determine whether a name is identical to that of an existing company, the following checks can be used:

For Example: If there is a company with the name, “Opal Steel Private Limited”, then the name “Opal Steels Private Limited” shall not be allowed.

For Example: If there is a company with the name, “Opal Steel Private Limited”, then the name “OPAL Steel Private Limited” or “OpalSteel Private Limited” or “OP AL Steel Private Limited” or “Opal-Steel Private Limited” shall not be allowed.

For Example: If there is a company with the name, “Alpha One Steel Private Limited”, then the names “Alpha’s One Steel Private Limited” or “Alpha 1 Steel Private Limited” shall not be allowed.

For Example: If there is a company with the name, “RK Steel Private Limited”, then “R and K Steel Private Limited” or “Aar Kay Steel Private Limited” or “R n K Steel Private Limited or “R & K Steel Private Limited” shall not be allowed. If there is a company with the name, “Fox Star Private Limited”, then the name “Foxx Star Private Limited” shall not be allowed.

For Example: If there is a company with the name, “Fox Star Private Limited”, then the name “FoxStar.com Private Limited” or “FoxStar Dot Com Private Limited” shall not be allowed.

For Example: If there is a company with the name, “Fox Star Private Limited”, then the name “New Fox Star Private Limited” or “The Fox Star Private Limited” shall not be allowed.

For Example: If there is a company with the name, “Fox Star Private Limited”, then the name “Star Fox Private Limited” shall not be allowed.

For Example: If there is a company with the name, “Opal Steel Private Limited”, then the name “Opal Ispat Private Limited” shall not be allowed.

Your Company name should not be unacceptable

Under the following circumstances, the proposed name for your venture shall be considered legally unacceptable or prohibited by law.

If your Company name contains name of an Individual

In case the proposed company name includes a name of relatives, it needs to attach the proof of relation. If it includes the name of any person other than the name of owners/ shareholders/ promoters or their blood relatives, a No Objection Certificate must be taken from such person and attached with the application for name approval with Ministry of Corporate Affairs.

Words requiring approval from Central Government:

A proposed company name that includes any words and their combinations from the following list will require a prior approval from the Central Government.

(a) Board, (b) Commission, (c) Authority, (d) Undertaking, (e) National, (f) Union, (g) Central, (h) Federal, (i) Republic, (j) President, (k) Rashtrapati, (l) Small Scale Industries, (m) Khadi and Village Industries Corporation, (n) Financial Corporation and the like, (o) Forest Corporation, (p) Municipal, (q) Panchayat, (r) Development Authority, (s) Prime Minister or Chief Minister, (t) Minister, (u) Nation, (v) Development Authority, (w) Statute or Statutory, (x) Court or Judiciary, (y) Governor, (z) Development Scheme, (za) use of word Scheme with the 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 (zb) Bureau.

Special conditions for Company Name

Example:- BMCD Limited representing first alphabet of the name of the promoter like Bharat, Mahesh, Chandan and David will not be allowed.

FAQs

Which words not Allowed in Company Name

The following words or combinations that contain the following words are not allowed to be a part of a company name or LLP name.
– Board
– Commission
– Authority
– Undertaking
– National
– Union
-Central
– Federal
– Republic
– President
– Rashtrapathi
– Small Scale Industries
– Khadi and Village Industries Corporation
– Forest, Corporation and the like
– Municipal
– Panchayat
– Development Authority
– Prime Minister or Chief Minister
– Minister
– Nation
– Forest Corporation
– Development Scheme
– Statute
– Statutory
– Court or Judiciary
– Governor
-Bureau

How to choose a name for your business?

> Be descriptive but not too general or vague. Don’t choose a name that is too vague or too meaningful.
> Use related words in a creative way.
> Keep it simple.
> Don’t copy your competitors.
> Avoid using your own name.
> Choose a name that’s scalable.
> Make sure you have a related domain.

Who can use Pvt Ltd?

Private limited company is held by few individuals privately having separate legal entity. In this the shareholders cannot trade publicly shares. It restricts its number of shares to 50. Shareholders cannot sell their shares without the approval of other shareholders.