Selecting an appropriate name for your company is one of the most difficult as well as exciting moments for entrepreneurs. Since it is a rule that all companies registered in India must have unique names, the MCA allows entrepreneurs to reserve company name before the online company registration is complete.
Earlier, the MCA only provided one separate form to apply for unique company name reservation. However, with the advent of the ease of doing business scheme in India, the MCA also allows to reserve company name directly through the web form for company incorporation.
What is Reserve Unique Name (RUN) Application?
RUN is a web service on the MCA portal. The RUN application form allows you to either reserve unique name for a new company, or change the name of an existing company. With the help of this form, you can verify that the name you want for your company is available and stays reserved for you, until the company registration process is complete.
The RUN is only one of the options for reserving company name. The second option for reserving unique name is to submit it in the Spice+ Part A form.
Also Read: Everything about Spice Form for company registration
Requirements to reserve company name using RUN
Before you can start with the application for company name reservation through RUN form, it is advisable to fulfill the following prerequisites:
- Registration as user on MCA portal;
- Corporate Identification Number (CIN) (if applicable); and
- Lastly, the proposed name.
Apart from that, you need to keep in mind the following precautionary measures:
I. Formulation of Company Name
The Companies Act, 2013 along with the other governing regulations, provide certain guidelines on the formulation of a proper company name. If the name you choose to reserve fails to meet the guidelines, the MCA might reject the names proposed by you.
According to the guidelines, a company name must have three parts:
First– a unique or coined word
Second– any suffix and;
Third– private limited or public limited or (OPC) private limited.
Further, certain other factors that you need to consider is that the company name must not resemble any other existing company or LLP’s name. Lastly, it must not infringe upon the trademark and domain name rights of any party.
II. Checking the Availability of Unique Name
Once you successfully formulate a list of names that you might use for your company, you need to check its availability. Since the process of company name reservation involves charges, the MCA provides a facility to check company name availability before you proceed with the RUN application.
Process to Reserve Company Name
Below is the step by step guide to reserve unique name for your company.
Step 1: Login to the Portal
To be able to file the name application, it is mandatory to have a user registration on the MCA portal. You can create an account by visiting the MCA portal, selecting the type of user and entering your relevant details. Once you successfully login, you can proceed with the process to reserve company name. Do note, that the one user registration you create, will be used for all the other business and company matters on MCA.
Step 2: Documents to reserve company name
It is not mandatory to submit any documents while reserving unique name for company. However, if you feel the need to submit any documents for informational purposes, you can do so in a PDF format attachment. For this purpose, you can provide documents that furnish the following information:
- Information of resubmission (if applicable);
- Type of Company;
- CIN (if applying for change in company name);
- Two unique proposed company names; and
- Business Activity.
Step 3: Submit Web-Based Application
Now, the MCA provides for different modes to reserve company name. Let’s take a look at those modes:
- For new company name reservation: Spice+ Part A form is applicable;
- For change in existing company name: Web-based RUN form is applicable;
- Name reservation for LLPs: To reserve a unique LLP name, you need to file the RUNLLP form.
Step 4: Payment of Fees to reserve company name
Before you can submit the application for the reservation of unique name, you need to pay the government fees associated with the process. The fees to reserve company name is INR 1000/-. Whereas, the cost of reserving unique LLP name is INR 200/-.
You can submit this fee online through Debit/Credit cards, or NEFT/RTGS options available on the MCA Portal. Upon completion of submission, the MCA will issue a SRN number for your application.
Key Takeaway: The fees for company name reservation is non-refundable. So, even if the proposed names given by you are not approved, you cannot claim a refund on that cost.
Step 5: Approval or Resubmission of proposed names
Once you submit the form applicable, the MCA will verify the form and information provided by you. This process takes up to 2 to 3 working days after submission of the application. In those 2 to 3 days, you can also track the progress of your application. The steps below show how:
- Login to the MCA portal;
- Choose MCA services from menu; and
- Select “Track SRN/Transaction Status.
After processing the application, if the MCA might take one of the below two decisions
- Approve the Name: here you will receive the name approval letter. Once you have this, you can proceed further with the company registration process; and
- Resubmission of RUN: when the MCA feels that the names do not suffice up to the guidelines, they will give you two more shots at resubmission of RUN application. In this case, the application status will change to “Sent for Resubmission”.
Key Note: In case of re-submission, the email with such notification, will also include the deadline for re-submission. If you miss out on the deadline, your application might get rejected. This will increase the cost of filing a new application.
Validity of Company Name Reservation
Once the company name reservation is approved, it stays reserved for 20 days from the date of approval. Hence, the applicant needs to submit the company incorporation form within those 20 days, to avoid expiration of the reserved name.
The company name reservation process is quite simple. Yet, it involves deadlines and the need for timely action. Hence, it is advisable to hire certified professionals to help you to reserve company name for your venture. Contact LegalWiz.in for a hassle free process today!