Starting a Private Limited Company includes a step by step process. The process starts with the name of the company. The name plays a vital role in the current scenario. It creates a brand which indirectly relates to the company’s turnover. A good name in the market creates the goodwill and goodwill attracts the consumers. Hence, there is a chain starting with the name and ending with sales.
Now the question arises how to choose the name while registration of a private limited company. Key factors to be considered while selecting a name as per recent amendments in the Companies Act are as under.
- A name must not resemble with the name of an existing company or LLP
- The use of the word “A” or “THE” will not be considered as a unique name
- Usage of singular or plural form of words will not be a new name
- The Phonetically similar name will not be a unique name
- One shall not use the following undesirable names
- Prohibited names under the Emblems and Names Act
- Name registered/applied for registration under the Trademark Act
- Offensive words
- Using words related to finance, investment, securities, etc. if the business activity is not such
- Any other name as prohibited under the law
Before finalizing the name, one must check the name availability of the company to avoid the rejection from the ministry.
Process to check availability of name of the company
The name must be checked on MCA portal as well as Trademark portal.
- To check the name on MCA, open tab CHECK COMPANY NAME from the website of MCA.
- Enter the name of the company and your main business activity in activity type. For e.g. for software development business enter “software” or “technology” in activity type. It is not mandatory to enter business activity but it shows the accurate results.
- On clicking search, it will show all the results with a similar name. If the name is available it will show an error as “Entered Company/LLP name does not exist”.
- One should check the name by entering only the first or first two words.
- As per rules, the name must not resemble with trademark except the owner of a trademark provides NOC to use such name. Hence the name must also be checked on trademark portal.
- One must know the trademark class for goods and services to check the availability under the trademark.
- Open trademark search from the trademark portal and enter the name and class.
- One must check by selecting “phonetic” also as MCA also compares phonetically similar names.
One can apply the name with MCA if the name seems available. If the name is most unique then one can directly apply name within the form of incorporation of the company. But if the chances of availability of name are less then the separate name application can be filed. In a name application, one can apply for maximum two names. If MCA does not approve any of the names then the applicant will get one more chance to apply the other two names.
Checking the availability of the name is an important step involved in private limited company registration. One can easily check the name of the company following the above steps. But it is important to check it through the professionals. MCA has the final authority to approve or reject the name.