MCA Naming Guidelines for Private Limited Companies

Oct 16, 2023

The first and most crucial step in forming a new company is choosing a name to distinguish it from others and raise awareness. Contact the Ministry of Corporate Affairs (M.C.A.) to reserve a distinctive company name. Regulation 8 of the Companies Incorporation Rules 2014 establishes approval/availability standards under the Companies Act 2013 when selecting words for businesses. We covered everything about “M.C.A. naming guidelines” in this post.

Here is a thorough breakdown of the factors to consider when choosing a name for your new business.

M.C.A.’s Rules for Private Limited Companies, O.P.C.s, and L.L.P.s

One-person companies (O.P.C.s), Limited Liability Partnerships (L.L.P.s), and Private Limited Companies all have specific name criteria set down by the Ministry of Corporate Affairs (M.C.A.). When registering or reserving a company name for various kinds of entities, you must follow the following guidelines:

The selected name should be distinct, not used previously, and not too similar to the terms of other businesses. To avoid misunderstanding in the workplace, individuals undertake this action.
To enhance transparency in business operations, individuals should ensure that the name includes a noun (a word or thing) and an activity term expressing the goals or character of the company.
Adhering to moral and legal norms, one must choose a name following the precise Guidelines for Company Names established by the Ministry of Corporate Affairs. These rules may limit specific corporate names’ words, phrases, or symbols.

Essential Considerations to Avoid Naming Pitfalls for Your Company

Carefully choose company names to avoid falling into one of the following categories.

Similarity to Existing Entities: To avoid confusion, names that are identical to, identical to, or phonetically similar to those of previously registered Companies or L.L.P.s should be avoided.
Conflicts with other trademarks: File the name reservation application under the Ministry of Corporate Affairs (M.C.A.) to reserve a distinctive company name for 20 days. If the application is approved, finish the last phases of the business establishment procedure within this period.
Legally Offensive or Undesirable Names: It is best to avoid using names that the central government might consider illegal or offensive.
Misleading Government Association: Company names should not indicate any link to governments, whether federal, state, or municipal unless the relevant government body has granted formal authorization.
Misrepresentation of operations: A corporation must refrain from using a name that implies engagement in financial, leasing, chit-fund, investment, or securities-related operations when it is not the case.
Descriptive Names: Avoid using incredibly descriptive names or employing phrases often used to describe a company activity since they could lack individuality and originality.

You must strictly follow these rules to ensure that your company’s name is legally correct, distinctive, and doesn’t cause problems with existing businesses or trademark holders.

Essential Considerations when reserving a Company Name

There are crucial factors to bear in mind to guarantee a smooth procedure while reserving a company name:

Application for SPICe + Form: Fill out Part A of the SPICe + form and apply for firm name reservation. The process of incorporating a company begins with this stage.
Name Reservation Period: Once approved, the Ministry of Corporate Affairs (M.C.A.) will reserve the name for 20 days. The applicant must complete the final phases of the business establishment procedure during this period.
Timely formation: Submitting the required paperwork on time and completing the business formation procedure within 20 days are crucial. Please do so to avoid the expiration of the name reservation.

Additional Fee for New Application:

If the name reservation expires and the applicant wishes to use the same name, they must submit a new application, incurring an additional fee.

Critical Considerations for Comparing Company Names Under M.C.A. Naming Guidelines

Under the M.C.A. naming guidelines, disregard several factors when comparing company names for availability. These include:

Specific Words and Abbreviations: Do not consider certain words like “Private,” “Pvt,” “Ltd,” “L.L.P.,” “Company,” “Co,” “Corp,” and other variations for differentiation. For example, “A.B.C. Ltd.” and “A.B.C. Ltd.” should be treated as the same.
Plural vs. Singular: Whether a word is plural or singular in one or both names should be disregarded. For instance, “Organic Product Ltd” is similar to “Organics Product Ltd.”
Type, Case, Punctuation: Disregard the type and case of letters, spacing, punctuation marks, and special characters used in the names. For example, “A.B.C. Ltd.” is the same as “A.B.C. Ltd.”
Tense Variations: Ignore different tenses in the names. For example, “Bright Solutions” and “Brightening Solutions” are considered the same.
Phonetic Spellings: Disregard different phonetic spellings and even misspelled words. For example, “Cue Math Pvt Ltd,” “Q Math Private Limited,” and “Que Math Pvt Ltd” are considered the same.
Domain Extensions: Ignore the use of domain extensions such as “www,” “net,” “org,” “dot,” or “com” in one or both names. For example, “Shehmaroo Ltd.” is the same as “Shehmaroo.com Ltd.”
Order of Words: The order of words in the names should not be a distinguishing factor. For instance, “Kotak Builders and Contractors Ltd.” is similar to “Kotak Contractors and Builders Ltd.”
Definite or Indefinite Articles: Disregard the use of actual or indefinite articles. For example, “Dreams Tours Ltd.” is the same as “The Dreams Tours Ltd.”
Slight Spelling Variations: Treat slight variations in spelling or grammatical variations of names as the same. For example, “Color Technologies Ltd.” is similar to “Colour Technologies Ltd.”
Complete Translations or Transliterations: The complete translation or transliteration of an existing name in Hindi or English, and not just part of it, should be disregarded. For example, “National Electricity Corporation Ltd.” is the same as “Rashtriya Vidyut Nigam Ltd.”
Addition of Place Names: Disregard adding the name of a place to an existing term that doesn’t contain a place name. For example, “Salvage Technologies Ltd.” is similar to “Salvage Technologies Delhi Ltd.”
Numerals and Brand Representations: Disregard the addition, deletion, or modification of integers in a name unless the digit represents a brand. For example, “Thunder Services Ltd” is similar to “Thunder11 Services Ltd,” but “One 11 Power Equipment Ltd” is not the same as “One Power Equipment Ltd” unless “One 11” represents a brand.

Words and Phrases Requiring Central Government Approval in Company Names

Authorized use in a company’s name is permissible after obtaining prior approval from the Central Government, per M.C.A.’s name availability guidelines.

Board
Commission
Authority
Undertaking
National
Union
Central
Federal
Republic
President
Rashtrapati
Small Scale Industries
Khadi and Village Industries Corporation
Financial Corporation and similar terms
Municipal
Panchayat
Development Authority
Prime Minister or Chief Minister
Minister
Nation
Forest Corporation
Development Scheme
Statute or Statutory
Court or Judiciary
Governor
Including the term “Scheme” in connection with the names of Government(s), State, India, Bharat, or any Government authority, or in a manner resembling schemes launched by Central, State, or local Governments and officers is prohibited.
Bureau

To prevent problems, ensure the chosen business name adheres to the M.C.A. naming criteria. The Registrar of Companies (R.O.C.) can demand a name change or dissolve the business and issue a fine of up to Rs. 1 Lac if it violates these rules.

To minimize the possibility of future issues, consider consulting a professional like Chennai Filings when choosing your company name. It ensures the name is distinctive and complies with legal regulations.

Extension of Company Name Reservation: New Provisions for Name Extension

In a notification dated December 24, 2020, the Ministry of Corporate Affairs (M.C.A.) introduced the provision for extending the reservation of a company name in certain situations. Under this rule, the Registrar can prolong the name reservation period, as outlined in Rule 9, for up to 60 days by paying a specified fee.

The Table shows the fees and Extension Period for the name Reservation

Extension Period	Fees to be Paid	Application to be made before
40 Days	INR 1000/-	Expiry of 20 days from the date of approval
60 Days	INR 2000/-	Expiry of 40 days(if extension of 20 days taken)
60 Days	INR 3000/-	Expiry of 20 days from the date of approval

Conclusion

Chennai Filings is committed to providing clients in India and overseas with complete services, including incorporation, compliance, advising, and management consultation. We promise to offer the most excellent solutions conceivable and strive for perfection in meeting the demands of our clients, assuring their complete satisfaction. If you need any assistance or have questions, please don’t hesitate to contact us. We’re here to help.