The Ministry of Corporate Affairs (“MCA”) has released the Companies (Incorporation) Fifth Amendment Rules, 2019, effective 10th May, 2019. The amendment has been brought making changes to provisions of Companies (Incorporation) Rules, 2014, with regard to undesirable and resembling names of companies.
Key changes brought about in this amendment:
- Names applied for, will be considered to be resembling the name of an existing company too nearly, only if, after comparing the two names, the following matters are disregarded:
- addition, deletion, or modification of numerals or expressions denoting numerals in an existing name, unless the numeral represents any brand.
- addition of the name of a place to an existing name, which does not contain the name of any place
- complete translation or transliteration, and not part thereof, of an existing name, in Hindi or in English;
- a slight variation in the spelling of the two names including a grammatical variation thereof;
- the use of the definite or indefinite article in one or both names;
- the order of words in the names;
- use of host name such as ‘www’ or a domain extension such as ‘net’ ‘org’, ‘dot’ or ‘com’ in one or both names;
- use of different phonetic spellings including use of misspelled words of an expression;
- use of different tenses in one or both names;
- type and case of letters, spacing between letters, punctuation marks and special characters used in one or both names;
- the plural or singular form of words in one or both names;
- the words like Private, Pvt, Pvt., (P), OPC Pvt. Ltd.; IFSC Limited, IFSC Pvt. Limited, Producer Limited, Limited, Unlimited, Ltd, Ltd., LLP, Limited Liability Partnership, company, and company, & co, & co., co., co, corporation, corp, corpn, corp or group;
- Following are some circumstances when a name suggested would be considered undesirable as enumerated in the newly inserted provision (Rule 8A):
- Use of descriptive names, where the name merely consists of commonly used words to describe an activity.
- the proposed name includes the word “State”, in case the company is not a Government company,
- the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding and a period of two years has not elapsed from the date of such dissolution,
- the proposed name contains the words ‘British India’,
- the company’s main business is financing, leasing, chit fund, investments, securities or combination thereof, but the proposed name is not indicative of such related financial activities, such as Chit Fund or Investment or Loan,
- the proposed name is identical with or too nearly resembles the name of a limited liability partnership,
- it includes any word or words which are offensive to any section of the people,
- If it is prohibited under the provisions of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950, unless a previous permission has been obtained,
- Below are some words/expression which can be used only after obtaining previous approval of Central Government:
- Board
- Commission
- Authority
- Undertaking
- National
- Union
- Central
- Federal
- Minister
- Nation
- Small Scale Industries
- Development Authority
Source : Ministry of Corporate Affairs
