Before Company Incorporation, the first and most important thing that should be done properly is selecting a Company name. The proposed Company’s name must be first approved by the MCA (Ministry of Corporate Affairs). The application for the approval of the name must be made under SPICe+ Form. One of the requested Company’s Names would be accepted depending on the availability of the Company Name. In case none of the proposed Company Names are suitable, then the applicant needs to resubmit the application with additional new names. In this blog, we will discuss a list of restricted words by MCA for a Company Name.
What is the Meaning of Restricted Words?
Once you register a Company in India, you need to propose a name for the same & get it approved by the MCA. The proposed name can be rejected or cancelled if not followed under the Guidelines of Company (Incorporation) Rules. There is a restriction of words that can’t be used while choosing the name of the Company.
Insights on Restricted Words by MCA for a Company Name
Following is the list of restricted words by MCA for a Company, and these restricted words by MCA for a Company name cannot be combined with any other words or terms with comparable meanings in any other language:
- Forest Corporation
- Development Authority
- Small Scale Industry
- Court or Judiciary
- Development Scheme
- Development Schemes or the use of the word “Scheme” in conjunction with the names of any State, Government, India, or any Government Authority or in any way similar to the programmes introduced by the State, Central, or Local Government or Authorities are prohibited.
- Khadi & Village Industries Corporation
- Words Need MCA Approval: When a proposed name comprises terms like a bank, asset management, mutual fund, insurance, venture capital, mutual fund, etc., the appropriate regulators like RBI, SEBI, IRDA, MCA, etc. must give their approval.
- Company name includes a Foreign Country name or a City: If the name of the Company contains the name of the Foreign City or Foreign Nation, the name can only be granted if the promoters can demonstrate that they have substantial business ties to that nation or Country.
- Words that Denote a Specific Type of Business Constitution: Any component of a Company Name cannot contain a word like LLP, HUF, Cooperative, Firm, PLC, PTE, AG, Society, Partnership, Trust, AG, etc., that is indicative of a different sort of business constitution or legal person.
- Words must be descriptive: The Name of the Company must be descriptive of the associated financial activity like Investment, Chit Fund, or Loan if the primary business of the Company is leasing, chit funds, financing, investments, securities, or a mix of these.
Some Common Reasons for Rejection of Proposed Name of the Company – Restricted words by MCA for a Company Name
Following are some common reasons for the rejection of the proposed name of the Company:
- The proposed name is not as per the activities described in Main Objects;
- The proposed name doesn’t include a suitable prefix;
- In case of the Company takes over the partnership firm’s business, the applicant must provide a copy of the Partnership Deed, the latest Assessment order, the Balance sheet of the past 2 years & also the Profit and Loss Account. An affidavit signed by all the proposed Partners showing that the primary object of the Company will be to take over the business of the present firm & thereafter, the firm will be dissolved;
- Words like Enterprises, Business, Industry, Udyog, Products, and manufacturing may be considered when the Company proposes to deal in various business activities or the Company is already carrying on various business activities (in case of a change of Company Name). As your business activity is in a particular trade, said keywords cannot be allowed.
- The proposed Company name is too general without any unique word or identity.
- The proposed Company name is not available in view of the existence of identical or closely resembling companies.
After discussing the list of restricted words by MCA for a Company name, it is concluded that you must propose a name & have it approved by the Ministry of Corporate Affairs. The proposed name can only be accepted if followed by Company (Incorporation) Rules and guidelines. As we mentioned above, there are some restricted words by MCA for a Company Name and if a Business Owner selects those words, then that Company Name Approval is rejected by MCA.
Read Our Article:What are the Requirements Before Choosing Company Name in India?