Common Causes of Rejection of Spice+ Part-A or RUN Application under CRC

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Before applying for a name change of the Company or submitting a fresh application to the Ministry of Corporate Affairs (MCA), mandatory to comply with the name guidelines as per Rule 8 of the Companies (Incorporation) Rules, 2014, which states that names which closely resemble the name of an existing company are not permitted. Make sure the proposed name must be distinctive and should not be misleading regarding the nature of the company's business. Moreover, it should not infringe on any registered trademarks unless consent or NOC has been obtained from the trademark owner. Certain words and expressions are prohibited unless specific approval is granted, such as those suggesting state patronage or international cooperation. 

Furthermore, the name should not be offensive or against public interest. Reviewing the proposed name for compliance and conducting a name availability search on the MCA portal will help ensure the application is not rejected and will facilitate a smoother incorporation or name change process.

Extract of Rule herewith: -

(1) A name applied for shall be deemed to resemble too nearly to the name of an existing company, if, and only if, after comparing the name applied for with the name of an existing company by disregarding the matters set out in sub-rule (2), the names are same.

(2) The following matters are to be disregarded while comparing the names under sub-rule (1): -

(a) 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, corp or group.

(b) The plural or singular form of words in one or both names.

1. Illustrations

(i) Green Technology Ltd. is the same as Greens Technology Ltd. and Greens Technologies Ltd.

(ii) Pratap Technology Ltd. is the same as Pratap’s Technology Ltd. and Pratap’s Technologies Ltd.

(iii) SM Computers Ltd. is not the same as SMS Computers Ltd.

(c) Type and case of letters, spacing between letters, punctuation marks, and special characters used in one or both names.

2. Illustrations

(i)   ABC Ltd. is the same as A.B.C. Ltd. and A B C Ltd.

(ii)  Teamwork Ltd. is the same as Team@Work Ltd. and Team-Work Ltd.

(d) Use of different tenses in one or both names

3. Illustrations

(i)   Ascend Solutions Ltd. is the same as Ascended Solutions Ltd. and Ascending Solutions Ltd.

(ii)  Speak English Solutions Limited is the same as Spoken English Solutions Limited.

(e) use of different phonetic spellings including the use of misspelled words of an expression.

4. Illustrations

(i) Chemtech Ltd. is same as Chemtech Ltd., Chemtek Ltd., Cemtech Ltd., Chemtech Ltd., Kemtech Ltd., and Kemtek Ltd.

(ii) Bee Kay Ltd is the same as BK Ltd, Be Kay Ltd., B Kay Ltd., Bee K Ltd., B.K. Ltd., and Be Kay Ltd.  

(f) Use of a hostname such as ‘www’ or a domain extension such as ‘net’, ‘org’, ‘dot’, or ‘com’ in one or both names.

5. Illustrations

(i) Ultra Solutions Ltd. is the same as Ultrasolutions.com Ltd.

(ii) Supreme Ultra Solutions Ltd. is not the same as Ultrasolutions.com Ltd.

(g) The order of words in the names

6.Illustrations

(i) Ravi Builders and Contractors Ltd. is the same as Ravi Contractors and Builders Ltd.

(ii) Ravi Builders and Contractors Limited is not the same as Ravi Shankar Builders and Contractors Limited.

(h) Use of the definite or indefinite article in one or both names

7. Illustrations

(i) Congenial Tours Ltd. is the same as Congenial Tours Ltd. and Congenial Tours Ltd.

(ii) Isha Industries Limited is not the same as Anisha Industries Limited.

(i) A slight variation in the spelling of the two names including a grammatical variation thereof.

8. Illustrations

(i) Color Technologies Ltd. is the same as Colour Technologies Ltd.

(ii) Disc Solutions Ltd. is the same as Disk Solutions Ltd., but it is not the same as Disco Solutions Ltd.

(j) Complete translation or transliteration, and not part thereof, of an existing name, in Hindi or English.

9. Illustrations

(i) National Electricity Corporation Ltd. is the same as Rastriya Vidyut Nigam Ltd.

(ii) Hike Construction Ltd. is not the same as Hike Nirman Ltd.

(k) Addition of the name of a place to an existing name, which does not contain the name of any place.

10. Illustrations

(i) If Salvage Technologies Ltd. is an existing name, it is the same as Salvage Technologies Delhi Ltd and Salvage Delhi Technologies Ltd.

(ii) Retro Pharmaceuticals Ranchi Ltd. is not the same as Retro Pharmaceuticals Chennai Ltd.

(l) Addition, deletion, or modification of numerals or expressions denoting numerals in an existing name, unless the numeral represents any brand.

11. Illustrations

(i) Thunder Services Ltd is the same as Thunder11 Services Ltd and One Thunder Services Ltd

(ii) Style Garments11 Ltd. is the same as Style Garments Ltd and Style12 Garments Ltd.

(iii) One 11 Power Equipment Ltd is not the same as One Power Equipment Ltd if One 11 represents a brand:

Provided that clauses (f) to (h) and clauses (k) and (l) shall not be disregarded while comparing the names if no objection by way of a Board resolution has been provided by an existing company.

8A. Undesirable names. - 

(1) The name shall be considered undesirable, if-

(a) It is prohibited under the provisions of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950) unless previous permission has been obtained under that Act.

(b) Save as provided in section 35 of the Trade Marks Act, 1999 (47 of 1999), the name includes a trademark registered under the Trade Marks Act, 1999  and the rules framed thereunder in the same class of goods or services in which the activity of the company is being carried out or is proposed to be carried out,  unless the consent of the owner or applicant for registration of the trade mark, as the case may be, has been obtained and produced by the promoters;

(c) It includes any word or words that are offensive to any section of the people.

(d) The proposed name is identical to or too nearly resembles the name of a limited liability partnership:

Provided that the provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a limited liability partnership.

(e) The proposed name is identical with or too nearly resembles a name which is for the time being reserved following rule 9:

Provided that the provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling a reserved name.

(f) The company’s main business is financing, leasing, chit fund, investments, securities, or a combination thereof, but the proposed name is not indicative of such related financial activities, viz., Chit Fund or Investment or Loan, etc.

(g) The company’s name is indicative of activities financing, leasing, chit fund, investments, securities, or a combination thereof, but the company’s main business is not related to such activities.

(h) It resembles closely the popular or abbreviated description of an existing company or limited liability partnership.

(i) The proposed name is identical with or too nearly resembles the name of a company or limited liability partnership incorporated outside India and reserved by such company or limited liability partnership with the Registrar:

Provided that if a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is maybe allowed with the addition of the word India or the name of any Indian State or city, if otherwise available:

Provided further that provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a company or limited liability partnership incorporated outside India.

(j) Any part of the proposed name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof e.g. co-operative, shikari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG, etc.

Explanation. - For this clause, it is hereby clarified that the name including the phrase ‘Electoral Trust’ may be allowed for registration of companies to be formed under section 8 of the Act, by the Electoral Trusts Scheme, 2013 notified by the Central Board of Direct Taxes (CBDT):

Provided that the name application is accompanied by an affidavit to the effect that the name to be obtained shall be only for registration of companies under the said Electoral Trust Scheme as notified by the Central Board of Direct Taxes.

(k) The proposed name contains the words ‘British India’.

(l) The proposed name implies an association or connection with an embassy or consulate of a foreign government.

(m) The proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in the Government.                                        

(n) The proposed name is identical to the name of a company dissolved because of liquidation proceedings and a period of two years has not elapsed from the date of such dissolution:

Provided that if the proposed name is identical to the name of a company that is struck off in pursuance of action under section 248 of the Act or section 560 of the Companies Act, 1956 (1 of 1956) then the same shall not be allowed before the expiry of twenty years from the date of publication in the Official Gazette being so struck off.

(o) It is identical with the name of a limited liability partnership in liquidation or the name of a limited liability partnership which is struck off for up to a period of five years.

(p) The proposed name includes words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual Fund’, etc., unless a declaration is submitted by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA, etc. have been complied with by the applicant.

(q) The proposed name includes the word "State", in case the company is not a government company;]

(r) The proposed name contains only the name of a continent, country, State, or city such as Asia Limited, Germany Limited, Haryana Limited, or Mysore Limited.

(s) Use of descriptive names, where the name merely consists of commonly used words to describe an activity.

Explanation. —For this clause, -

(A) The term “commonly used words” refers to the use of generic expressions that may be used by any other company to describe its trade.

(B) While determining whether a name is descriptive or not, the objects of the proposed company or the order of words appearing in a name shall not be relevant.

(C) The name shall not be deemed to be descriptive where “commonly used words” are used in addition to other words in the name.

1. Illustrations

(i)  The names Silk Manufacturers Private Limited and Manufacturers Silk Ltd. are descriptive names as they merely describe an activity which may also be carried out by any other company and the order of the words is not relevant while determining a descriptive name.

(ii) The names Computer World Ltd., Food Star Ltd., Tour Hub Ltd, or House of Chocolate Ltd are not descriptive as the names do not merely consist of commonly used words.

(iii) The names Technical Vista Ltd or Vista Technical are not descriptive as the names do not merely consist of commonly used words and the order of the words is not relevant while determining whether a name is descriptive.

(iv) The name Drinking Water Plant Ltd. is descriptive, even if the object of the company is not related to making a drinking water plant as it consists of commonly used words and objects of the proposed company is not relevant while determining whether a name is descriptive.

(v) The name Silk Wise Manufacturers Private Limited is not descriptive as it contains words other than commonly used words.

(t) The proposed name includes the name of any foreign country or any city in a foreign country, the same shall be allowed if the applicant produces any proof of the significance of business relations with such foreign country like a memorandum of understanding with a company of such country:

Provided that the name combining the name of a foreign country with the use of India like India Japan or Japan India shall be allowed if, there is government-to-government participation or patronage and no company shall be incorporated using the name of an enemy country.

Explanation. - For this clause, ‘enemy country’ means so declared by the Government of India from time to time.

(u) The proposed name of a section 8 company under the Act does not include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, and the like, etc.

(v) The proposed name of a Nidhi company under the Act does not have the last word “Nidhi Limited” as a part of its name.

(w) The proposed name has been released from the register of companies upon the change of name of a company and three years have not elapsed since the date of the change unless a specific direction has been received from the competent authority during compromise, arrangement, or amalgamation.

(2) The applicant shall declare in affirmative or negative (to affirm or deny) whether he is using or has been using in the last five years, the name applied for incorporation of company or LLP in any other business constitution like Sole proprietor or Partnership or any other incorporated or unincorporated entity and if, yes details thereof and No Objection Certificate from other partners and associates for use of such name by the proposed Company or LLP, as the case may be, and also a declaration as to whether such other business shall be taken over by the proposed company or LLP or not.

8B. Word or expression which can be used only after obtaining previous approval of Central Government.

In terms of clause (b) of sub-section (3) of section 4, the following words and combinations thereof shall not be used in the name of a company in English or any of the languages depicting the same meaning unless the previous approval of the Central Government has been obtained for the use of any such word or expression: -

(a) Board.

(b) Commission.

(c) Authority.

(d) Undertaking.

(e) National.

(f) Union.

(g) Central.

(h) Federal.

(i) Republic.

(j) President.

(k) Rashtra Pati.

(l) Small Scale Industries.

(m) Khadi and Village Industries Corporation.

(n) Financial Corporation and the like.

(o) Municipal.

(p) Panchayat.

(q) Development Authority.

(r) Prime Minister or Chief Minister.

(s) Minister

(t) Nation

(u) Forest corporation.

(v) Development Scheme.

(w) Statute or Statutory.

(x) Court or Judiciary.

(y) Governor.

(z) the use of the word Scheme with the name of Government (s), State, India, Bharat, or any Government authority or in any manner resembling the schemes launched by Central, State, or local Governments and authorities; and

(za) Bureau.]

Hence before applying a Name change of Company Registration, the promoter or Applicant must ensure to follow guidelines under Rule 8A identifies undesirable names, which may include those prohibited under the Emblems and Names (Prevention and Improper Use) Act, 1950, names containing offensive words, or names implying association with national figures or entities. Furthermore, Rule 8B stipulates words or expressions require prior approval from the Central Government before incorporation. Connect with Compliance Calendar LLP to adherence all legal standards and facilitate the smooth Private Limited Company registration process or Company Name Change

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