Why and How you should register your business or trade name in India

Trade name is the first and foremost thing you should find before starting your business. Many also refer it as a business name.

If you don’t register it with the government, then you can’t sign legal documents with your trade name in it.

You can’t even accept account payee cheques or payments through any other banking mode in your trade name as bank will not allow you to open an account without a government certificate.

Certain type of businesses in India are not allowed without a government registration.

Before you start using a name, we advise you to make sure that no one else is using it. You can do it by searching MCA and trademark database in addition to a internet search.

Imagine, you have not registered your trade name and someone else has opened up same type of business using the same name with all required registrations. In this type of situations, your business may lose money and brand value.

If you are planning for a long term, spending a lot on marketing and expecting customers to know you by your name, then you have to make sure that its properly protected and registered as per law. If you register your business, it will automatically register your trade name with the government.

Registering your business name with MCA

You can register your business name by creating a OPC, private limited or public limited company.

When you apply for your company or business name approval before registering any of these companies, government will first make sure that the proposed or similar name is not in use by any existing business registered with MCA or for which their is a trademark.

If it’s used by any existing company or LLP, then your application may get rejected. Therefor, its advised to register your business first instead of postponing it for a later date.

You can create following types of organization to register your business with ministry of corporate affairs:

  • One person company
  • Private limited
  • Public limited
  • Limited Liability Partnerships

You can form a one person company with a minimum of one member and one director in it.

If you have two or more persons then a private limited company can be formed. Similarly, 7 or more persons can form a public limited company.

In all these cases, your business will have a separate legal entity operating with the name in which certificate is obtained. If you have registered your business with MCA, then no other person will be able to form a company or LLP with the same name in India. In this way you are safe.

However, to get a full proof, we suggest you to go for trademark registration. With trademark registration, you can be sure no one else uses it. For instance, if you have registered your company as “xyzabc private limited”, then a proprietorship or partnership business can use “xyzabc & co” or any other form by using “xyzabc” in it. In this type of cases, you can protect your name “xyzabc” by taking trademark registration for it.

Trade name registration for a proprietorship and partnership firm

A sole proprietorship and partnership firm does not provide any legal protection to its owner. This means in case of any legal dispute on debt, liability or bankruptcy, owner’s personal asset can be used to settle claims if business assets are not sufficient.

For a proprietorship and partnership firm, there is no restriction on use of trade name unless and until you have trademark for it.

You can also perform work without any registration by just forming a proprietorship or partnership firm as both form of businesses are not required to be registered in India.

However, in case of a partnership firm, you have to get separate income tax permanent account number to open a bank account or to start the business.

Based on your business type, you may also require licenses from various government departments such as drug license, GST registration, Import Export Code etc. We suggest you to consult a professional to know more based on your business requirements.

Whatever registration you take for your proprietorship or partnership firm, please remember there is no protection on misuse of trade name unless and until you have trademark for it.

Why to get trademark registration

To make sure everything is legal, we suggest you to apply for trademark in addition to any government registration.

Trademark is a word, phrase, symbol or design or any other thing that identifies the source of a product or services which are different from its competitors.

If you have registered trademarks, then it’s going to be much easier for you to take legal action against the person who is misusing your registered trade name and recover losses or damages caused due to such misuse.

To get trademark registration from the government, you must file an application with the office of the registrar of trademarks. There is a fee you need to pay while filing the application.

Therefore, before applying, as an entrepreneur you need to conduct comprehensive search to make sure no one is already using the proposed name or else your application will get rejected and you will lose the application money.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.