Introduction

Choosing a company name is a crucial step when registering a Private Limited Company. During the name approval process conducted by the Ministry of Corporate Affairs, applicants are required to submit two options for the company name in order of preference. The Registrar of Companies (ROC) will accept one of the two options. The recently introduced SPICe+ incorporation process combines the steps of obtaining a Director Identification Number (DIN), getting name approval, and incorporating the company into a single process.

If a company name matches any LLP name, Trademark Name, or existing company name, the applicant needs to resubmit the form with the new name. This article will discuss the reasons for the rejection of company names.

Reasons for Company Name Rejection

1. Conflict with primary objectives– If the suggested name conflicts with the primary objectives stated in the application for company incorporation, it may be rejected.

For instance, if a company named “ABC Private Limited” intends to provide business consulting services, the name might be rejected due to its                inconsistency with the company’s intended activities.

Another example – If a company is named Health Sphere Private Limited but the main activity of the company is just to develop an application             for patients and doctors to meet them on a platform then the name shall be misleading and would not get approved unless the suffix like                            Technology or Tech Solutions we add in it. So keep the primary objective in mind while thinking about the name of the company.

2. Names include Udyog, Manufacturing, Etc– The Ministry of Corporate Affairs (MCA) allows the inclusion of terms such as “Industry,” “udyog,” “ Ventures”, “Enterprises,” “products,” “business,” or “manufacturing” in a company’s name only if the company is involved in or plans to engage in multiple commercial activities. Using these keywords in names that are specific to a single industry is not permitted. It is important to note that simply intending to engage in various activities does not automatically qualify a company to use the terms industry, udyog, enterprise, products, business, or manufacturing. The MCA may require a proven track record of success as well.
3. Unfavorable adjectives- The Ministry of Corporate Affairs (MCA) considers the inclusion of terms like national, central, union, India, and federal in company names as undesirable. Consequently, the MCA will reject names that contain these terms.
4. General name- Reservations for names in company registration are only allowed for distinctive objects. This also applies to the reservation of company names. If the approving authority deems a name too general, it will be rejected. For example, names like “Cement Private Limited” or “Successful Private Limited” are considered highly generic and lack any unique or distinguishing qualities. The name should be very unique and not general.

         For Instance, if a company deals in Handcrafted Valuable items then the name could not be ‘Handcrafted Valuables Private Limited”. The Name           should be unique like Handcrava which can be approved by the MCA.

5. The name indicates the relationship with the National Leader or Government-If a proposed business name indicates a connection with or approval from a National Leader or the government, it will be rejected by MCA(Ministry Of Corporate Affairs) For example if you add “Rajiv Gandhi”, “Abdul Kalam” As a prefix in the name of the company it will not be approved.
6. Same name or somewhat similar-If the proposed name is the same as or closely resembles the name of an existing company, it may cause confusion among the public. The Companies Act, of 2013, prohibits the registration of two firms or companies with similar names or trademarks. If the proposed name sounds too similar to an already-used name, it will be rejected. It is important to consider that the authorities responsible for approval also take into account names that have similar pronunciations, ensuring that the company name does not sound familiar or create confusion among people.
7. Company Name is missing a prefix– In company names, it is customary for the business or brand name to serve as the prefix. It is essential for a name to have an appropriate prefix in order to be approved. If the prefix resembles existing trademarks or company names, or if it is deemed inappropriate, the Ministry of Corporate Affairs may reject the name.

Conclusion–

It is of utmost importance to choose a distinctive business name that can be approved by the ministry to avoid the inconvenience of having to reapply for a name. The provided information will help you select a company name that will not be rejected by the Ministry of Corporate Affairs (MCA).