Promoters can select any name for company registration. They can even change it at any point of time by taking necessary approvals from registrar.
However, words and expressions used in the name should not be prohibited or undesirable as per various rules, clarifications, circulars and guidelines issued under the companies act, 2013.
In this article, we have noted certain words and expressions which you are not allowed to use and cases where you can use with prior approvals.
Words for which NOC or approval has to be obtained
As per the companies act, 2013, you are required to take prior approval from various agencies if certain names and/or expressions are used in your company name.
Here is a list of those cases where necessary approvals of government and other agencies are required.
- Word that gives a impression that the company is connected with a government. If it’s used, the previous approval from respective government departments must be obtained.
- Bank – it can be used only when no objection certificate is issued by RBI
- Stock exchange or exchange – only when no objection certificate has been obtained from SEBI
- Commodity exchange – Can be used after getting NOC from forward markets commission (FMC)
- Insurance – NOC from IRDA is required
- venture capital
- Asset management
- Mutual fund
- Name of a group company – approval of those companies board of directors. If the name has trademark then NOC must be obtained from the owner.
Words which can’t be used
Certain words and expressions are specifically prohibited for general public to use and in some other cases it’s specifically reserved for various government agencies.
Here is a list of words and expressions which are prohibited or not allowed for general public to form a company.
- the word or words that are offensive to any section of the people.
- National – It can be used only when government has stake in the company
- British India
- Where the word in the proposed name is indicative of a separate type of business constitution or legal person or any connotations thereof. For instance words like LLP, Inc, Gmbh, AG, Partnership, and proprietorship not allowed.
- Word implies association or connection with embassy, consulates, foreign government, national hero,
- State – only when it’s a government company
- Name of continent, country and city;
- Name which is too general;
- Small Scale Industries;
- Khadi and Village Industries Corporation; ( Financial, Corporation and the like;
- Development Authority;
- Prime Minister or Chief Minister;
- Forest corporation;
- Development Scheme;
- Statute or Statutory;
- Court or Judiciary;
- Development Scheme or the use of word Scheme with the name of Government
- Bharat or any government authority or in any manner resembling with the schemes launched by Central, state or local Governments and authorities; and
In addition to above restrictions, you should remember that the names you have chosen is also not in contravention to provisions of Emblem and Names (Prevention of improper use) Act, 1950.
Power of ROC to cancel name and impose penalty
If after reservation of the company name, it is found that name was applied by furnishing wrong or incorrect information, then ROC has power to cancel the name and impose penalty up to Rs 1,00,000 on the person making application with wrong or incorrect information.
In case the company is registered after getting the name approved by providing wrong or incorrect information, then ROC after giving the company an opportunity of being heard, either direct the company to change its name within a period of 3 months, take action to strike off the company or make a petition for winding up of the company.