Name Approval Process of Private Limited Company
Company registration is a process which involves several steps. Name approval is one of those steps. After getting Digital signature certificate (DSC) and Director Identification number (DIN), the next step is name approval of the company.
Before finalise your name you must check that the name must not resemble with existing company name or trademark. If the company name resembles other company name then MCA shall not approve the name. The prime criteria which is considered by the MCA official while approving name, is your company's objectives. It means the if your company name matches or signifies your objectives or main activities then you win the half battle in approving your name.
While approving the name of your company you have to check the following points as precautions:
- It is very much obvious to say that your name must not resemble other company name.
- The last word of the company must be public limited company, private limited company or Nidhi Company as per the type of the entity.
- If you are going to approve your company name through INC-1 route then you can mention maximum 6 names in the order of priority.
- Then you have to give the short description to elaborate why you choose such name and how it is representing your company activities.
- You can use the name search facility at MCA site to search the name availability.
- The proposed name shall not violate the rules and law in existence.
After submitting you name approval application, MCA takes normally 5 to 7 days to approve your name. But sometimes MCA does not approve name easily and rejects the same. Even in that case you have the opportunity to get your name approved by re-submitting the form 2 times after rectifying the earlier mistakes.
If you fail to get the name in extra 2 attempts as well then you have to move a fresh application from starting. After the getting the name, such name is valid only for another 60 days. It's like a reservation period within which you should incorporate you company otherwise proposed name can be lapsed due to no usage of the same.
There are few reasons which are important to know that why the proposed name is rejected, which are as follows:
There are so many points which must be kept in mind while going for name approval which are very well defined in the companies act, 2013. Therefore, we can conclude one thing that the main reason that due to which the name is rejected, is overlooking the laws. So, I am just mentioning those points which are neglected generally by the people as follows:
- Resemblance of the name with the existing company name.
- Proposed name is too general and don't depicts the main business of the company.
- Matching of the proposed name with registered trademark.