Name Availability Guideline, 2011 issued by the ministry of Corporate Affairs on 8th july 2011 with effect from 24th July 2011 and related Form 1A was also introduced on that date. The Fees for filing this form is Rs. 1000/-.
[UPDATE: Rule 8 of the Companies (Incorporation) Rules, 2014 replaces these guideline with effect from 1st April 2014. Rules 8 Discussed in another post.]
The applicant has to file a declaration, which in fact requires comply some requirements by the applicant. The proposed name shall have:
(i) No resemblance with existing or approved name of companies or LLPs;
(ii) No trade mark infringement;
(iii) No violation of Emblems and Names (Prevention of improper use) Act, 1950;
(iv) Not constitute offence under any law;
(v) Not offensive to any community; and
(vi) Comply all guidelines.
The applicant may take help of a professional and in that case professional may certify the form and attach search report with form. When we study relevant Form 1A, there is no specific space to attach this search report. In our opinion, this search report may, presentably be attached in space provided in optional attachment. Further, MCA either dispose of this requirement or should provide space in the relevant form.
In case professional certify the form, the name shall be available by the system online. Here professionals are bound with professional regulations. This process is being called non- straight through (STP) mode. The government added some exception to this online processing in April 2012 with effect from 20th May 2012:
(i) Where online check by system show any similarity with any existing trademark;
(ii) Where inline check by system show similarity of any of the two words with existing company name;
(iii) Where name contain only a single word;
(iv) No name available through STP mode, before 1900 hrs of the day where name was approved before 1100 hrs same say, or any other case before of 1900 hrs of next working day.
Any name made available, may be withdrawn by Registrar of Companies after giving opportunity of being heard.
Any name so available may remain available only for 60 days and lapse thereafter if company with such name has not been incorporated within that time period.
Provision of Section 22 shall still apply on the company incorporated with such name. The Central Government may direct the company to change its name.
When we revisit whole guideline once again after reading Section 22, we do not find any requirement to of processing through “non- straight through mode” particularly when both independent professional and government official use same system of search. Further, the search for trademark is available for registered trademark but non – registered trademarks are equally protected in India. This non –STP mode significantly increases time in approval and incorporation of company and have negative impact on doing business ranking of the nation. Instead of non-STP mode, MCA may ask applicant to declare that he has taken all safeguards and got appropriate professional advice and in case of any infringement of trademark or similarity, they understand that they are bound to change the name as per section 22 of the act.
To determine identical name, following shall be disregarded:
(i) Word like Private, Limited, LLP etc;
(ii) Word like company, Corporation etc;
(iii) Plurals of a word;
(iv) Type, case, space, punctuation marks;
(v) Joining two words together or separating them , when it does not make them distinguishable;
(vi) Different tense of a word, a number written in words or in numbers;
(vii) Different phonetic, spellings of a word or number;
(viii) Addition of internet related designations;
(ix) Addition of New, Modern, Shree, Om, Jai, The etc. or addition of name of any place unless there is a no objection certificated through board resolution by existing company;
(x) Different combination of same words;
(xi) Hindi or English translations of same words;
There are some additional features of present guidelines:
(i) No need of main object in proposed name with some exceptions;
(ii) In finance, housing finance, chit fund, leasing, investment, securities, etc. name should indicate main object;
(iii) No word indicative of misleading constitution of company allowed like society;
(iv) Abbreviated name for news companies not allowed, general (generic) name also not allowed;
(v) Name of dissolved company not allowed for 2 years and name of struck off company not allowed for 20 years;
(vi) Inclusion of words like insurance, bank, stock exchange, venture capital, assets management, nidhi , mutual fund may be allowed when declaration given by applicant that requirement of sector regulator/law has been complied;
(vii) Name of word “state” is reserved for government companies. Name containing only name of continent, country, state and city not allowed;
(viii) No word or expression giving any impression of connection with any government not allowed unless previous approval of central government;
(ix) In case of subsidiary of foreign company original name of the holding company will be allowed with addition of word India or name of Indian state or city;
(x) Change of name not allowed in case of defaulting companies.