Choosing the correct company name would be important, provided its potential to shape the success of the company. In India, Chapter II- The Companies (Incorporation) Rules, 2014 have been implemented by the Ministry of Corporate Affairs (MCA), which prohibits certain names for businesses. This article provides an in-depth analysis of the MCA Restricted Words for Company Names.
There are several dos and don’ts to bear in mind while selecting a company name. Keeping these things in mind, choosing an appropriate name is important since a company’s name has the power to make or ruin an organization and because MCA company naming rules ban or outlaw some names.
Registration of Company Names Under MCA
The Ministry of Corporate Affairs (MCA) must first approve the name of the new entity before it can be used to establish a company or LLP (Limited Liability Partnership) in India. Companies/LLP can suggest a maximum two names in Name reservation form out of which one name is approved by the Central Registration Center (CRC). The promoter will be invited to resubmit the application with fresh names if none of the names supplied are acceptable. The fact that a proposed business name contains words that are forbidden by the Companies Incorporation Rules is one of the most frequent justifications for rejecting it.
Particular Suffixes Would be Important
It is required to affix words with the suffixes such as limited or Public limited.
- The word limited should arrive after the name of the company when the business would get registered as a public limited company.
- A business name should be secure with the words Private Limited/Pvt. Ltd. at its end that is registered as a private limited company.
- Companies registered as producer companies should use suffix Producer Limited.
- Companies registered as OPC should use the suffix OPC Pvt./Private Limited.
- Companies registered as IFSC should use the suffix IFSC Limited/Pvt. Limited.
- Business entity registered as an LLP should use the suffix LLP/ Limited Liability Partnership.
- Essential information- Section 8 enterprises and government-owned companies would get exempted from the same law.
Below Mentioned Would be the MCA Restricted Words for a Company Name
Companies have to take prior permission of the Central government to use following words and combinations thereof in English or any of the languages depicting the same meaning:
| Board | Statute or Statutory | National |
| Union | Small Scale Industry | Commission |
| Central | Minister | Nation |
| Panchayat | Forest Corporation | Municipal |
| Court or Judiciary | Development Scheme | Bureau |
| Development Authority | Khadi and Village Industries Corporation | Prime Minister or Chief Minister |
| Authority | Undertaking | Republic |
| Federal | Rashtrapathi | Governor |
| President | Financial Corporation and the like | The 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 |
Perspectives on MCA-Restricted Words
Here, we have defined the main perspectives on MCA-restricted words for company names.
MCA Approval-Demanding Words
When a proposed name comprises the words such as “insurance,” “bank,” “stock exchange,” “venture capital,” “asset management,” “Nidhi,” “mutual fund,” and others, the proper regulators, along with RBI, IRDA, SEBI, MCA, etc., should furnish their approval.
Names of Foreign Countries or Cities are Included in the Company Name
When a company name contains the name of a foreign nation or city, the name can only be granted if the promoters can demonstrate that they have strong business ties to the nation in question.
Read Also: All About New MCA Filing Form SPICe+ (SPICe Plus) for Company Registration
Business Organization Terms
Any word that represents a different kind of corporate structure or legal person, like cooperative, Trust, LLP, Partnership, Society, Proprietor, HUF, Firm, Inc., PLC, GmbH, SA, PTE, AG, etc., cannot be used in any part of a company name.
Use of Illustrative Language is Required
When the company’s main functioning would be financing, leasing, chit funds, investments, securities, or a combination of these then the company name should be informative of the concerned financial activity like Chit Fund, Investment, or Loan.
Important Restrictions While Reserving Names
- The name should not be similar in any way such as the plural or singular form; use of different tenses; use of different phonetic spellings including grammatical change; any change in order of name; any change in type or case of letters/ spacing between letters/ punctuation marks/ special characters used; use of host name such as ‘www’ or a domain extension such as ‘net’, ‘org’, ‘dot’ or ‘com’; use of the definite or indefinite article; translation of name in Hindi/English; use of any name of place and any addition, deletion, or modification of numerals.
- The name should not be used if prohibited or registered under the following act unless prior approval is taken from the applicable authority:
- Section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950)
- Trade Marks Act, 1999
- Company should take care of the following:
- The name should not be offensive to any section of the people;
- The name should not contain the words ‘British India’
- The name should not be identical to the name of a limited liability partnership incorporated in India or outside India
- The name should not imply association or connection with an embassy or consulate of a foreign government
- The name should not imply association or connection with or patronage of a national hero or any person held in high esteem or important personages who
- Occupied or are occupying important positions in the Government
- The name of the company should be related to the main business activities/ objectives of the company
- The name should not be related to the popular or abbreviated description of an existing company or limited liability partnership
- The name should not include the word “State”, in case the company is not a Government company
- The name should not contain the name of a continent, country, State, city such as Asia Limited, Germany Limited, Haryana Limited or Mysore Limited
- The term “commonly used words” refers to use of generic expressions that should not be included in the proposed name
- The name should not include words such as ‘Insurance’, ‘Bank’, ‘Stock
- Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual Fund’, etc., unless a declaration is submitted by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA, etc. have been complied with by the applicant;
- Domestic/ Foreign Group Companies incorporating its subsidiary company in India can use the original name of the holding company as it is may be allowed (with the addition of the word India or name of any Indian State or city, for foreign Subsidiaries) and also consent/ copy of resolution is to be attached approving/NOC for using the same name should be attached with the form.
- The proposed name should not be identical to the following names:
- Company dissolved as a result of liquidation proceeding for a period of two years from the date of such dissolution.
- Company which is struck off in pursuance of action under section 248 of the Act or under section 560 of the Companies Act, 1956 (1 of 1956) for a period of twenty years from the date of publication in the Official Gazette being so struck off;
- LLP in liquidation or which is struck off for a period of five years
Conclusion:
When creating the company in India then you would be needed to propose and authorise the name by the Central Registration Centre (CRC). When the norms of the Company (Incorporation) Rules, 2014 do not satisfied then the proposed name might get dismissed. As mentioned previously, the MCA limits some words and when the Business owner opts for the specific words then the MCA (Ministry of Corporate Affairs) shall dismiss the approval of the company name.
