Mark Business Identity Wisely – Choosing the name of Company
The stakeholders including the consumers as well as competitors refer the company by its name. The name of the company plays a very important role in creating and establishing the significance of its main object in the Market.
A company being Private Limited Company or otherwise, is a separate legal entity established by law, its identity is very different from its members and it holds a distinct position in its own name. A name with some uniqueness and relation with major activities will always assist you with a benefit of establishing a very sound position in the mind of consumers and opponents. Therefore, for easy understanding a name should made up of three components being
- Your brand;
- Main business activity; and
Choosing name is a crucial part while incorporation and register as a Limited Company. Here know what aspects are to be entertained while choosing the name of the Company!
Formulation of Name:
The name of a Company consist mainly 3 parts as mentioned above, which can be explained and rationalised below:
First Part of the name helps the Company to get the distinctive identity apart from other players in the market. This part acting as prefix to the name can be a coined word or an invented word with mixture or combination of two or more of such words which can help to reflect the characteristic of the Services or quality of Goods to be provided by Company or any such terms which are usually used in the industry however unique in nature.
As you never know, when your Company name will become a brand and will be recognized by the unique word chosen as prefix in name. We can see various examples in the corporate world like Reliance, TATA, Larsen & Toubro (L&T) etc. have become brand in their own market by choosing such words which reflect quality, combination or characteristics of Goods and services.
This aids the promoters for easy reservation of the name for proposed company along with the registration under Trademarks. As stated earlier, this part of the name mostly helps to establish the Brand of the company and therefore it should be coined keeping in mind the requirement of Trademark Registration also, which in future will help for easy Trademark registration in the name of company or the promoters.This aids the promoters for easy reservation of the name for proposed company along with the registration under Trademarks. As stated earlier, this part of the name mostly helps to establish the Brand of the company and therefore it should be coined keeping in mind the requirement of Trademark Registration also, which in future will help for easy Trademark registration in the name of company or the promoters.
Second part of the name helps consumers to relate with the field of operations. Targeted consumers can approach the Company by easily identifying the activities of the Company by its name, which helps to indirectly promote the activities of the Company. This will work as a middle part of the name.
The third part is the statutory requirement. The company by virtue of its nature and registration under Indian Companies Act, 2013 requires the entities to add the word “Private Limited” or “Public Limited” or “(OPC) Private Limited” at the end of its name, which reflects that the entity is registered with the MCA under the Companies Act. This suffix is used to make third parties and contracting parties to be aware about the constitution of the organisation and liability of members and directors.
Consider following factors before choosing the name to register as a limited company:
- Think wisely while choosing your name of the Company keeping in mind that every business you incorporate with a vision of long term growth.
- Easy to spell and remember
- Short & simple: The name shall be of reasonable length and not so lengthy.
- Unique: One can use prefix to make the name distinct from others
- Meaning: The name should be such that it helps people to connect with the Company and its branding and help to establish a Brand and Trademark.
- The name should not be such that it is offensive to any religion, caste, race, community, group, society etc.
- It should not be opposed to public policy.
- It should not include any word that can lead to impression that the entity is having any connection or association with Local/ State/ Central Government.
- The name should not be similar with any existing company/ LLP and also with any Trademark. However, if you are willing to reserve same name, you can apply the same with the consent of owner by submission of NOC.
- Not to include any word, prohibited by the Government or any under any law prevailing in India.
- Always try to provide maximum six names to your professional to seek the best advice on choosing the name for your Company.
- Requisite of Approval: Names which include words such as ‘Finance’, ‘Bank’, ‘Insurance’, ‘Mutual Fund’, etc., the in-principle approval of concerned Regulatory such as SEBI, RBI, IRDA, etc. is required to be submitted along with the name approval application.
You may check the availability of the name at the online portal of MCA at http://www.mca.gov.in/mcafoportal/showCheckCompanyName.do.
For the purpose of reserving the name, applicant needs to make an application in the prescribed form, through his professional expert in this field i.e. a Company Secretary or a Chartered Accountant. In this application, applicant can submit maximum 2 names in order of preference along with providing the base of choosing the name, if any. After due verification, the Registrar may approve any of the name applied by the applicant for the registration of Private Limited Company.
Once the name application is approved by the Registrar, the name of Private Company will be reserved by the Ministry for a period of 20 days, during which the procedure for incorporation and Online Private Ltd Company Registration shall be completed, failing to which the name reserved for the applicant will be withdrawn and the applicant is required to make fresh Name Approval Application with payment of requisite fees to Government.
CS Prachi Prajapati
Company Secretary with a forte in content writing! Started as a trainee, she is now leading as a Content Writer and a Product Developer on technical hand of LegalWiz.in. The author finds her prospect to carve out a valuable position in Legal and Secretarial field.
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