Picking a Name For Your Private Limited Company
At Vakilsearch, we deal with two sides of India on a daily basis: start-ups and government. The former expects quick solutions, while the latter is the very opposite. So it’s no surprise that entrepreneurs are hugely frustrated by their interactions with the authorities. What seems a small task to them can take days for the Registrar of Companies (RoC) to complete. This is what start-ups in the legal space, such as Vakilsearch, are trying to solve: ensuring that entrepreneurs don’t have to waste their time figuring out legal, without paying hefty fees.
The earliest event that frustrates entrepreneurs is getting the name of their company approved. The RoC has some rules you need to be aware of (which we’ve listed below) and you must also know which names have already been taken. This can be a time-consuming activity, so we’ve simplified this process by putting together a tool for checking the availability of your company name. Our company name search tool is updated on a regular basis to ensure the validity of the data. It also lists, along with the CIN, the name of companies that have the same or a similar name. Based on this, it informs you whether or not your company name is available.
Picking a Name
Even before the INC-29 procedure was introduced this May, start-ups found it tough to have their name registered on first try, even though you were allowed to submit six names, in order of preference. Now that the INC-29 only allows one, you need to know the rules before you specify a name or you risk having your form rejected. So how do you pick the name of your company?
It’s quite undemanding, really. All the RoC is asking for is for you to first think of a unique name and then follow it up with your business type (the descriptive component of the name). Here’s how it works:
1. Unique Component
Take a name like Jasper Infotech Private Limited (this is Snapdeal’s name, by the way), in which Jasper is the unique component. Now, using our tool you’ll find that there are a number of companies with the same unique component. So how did this one get approved? Well, because none of them have Infotech or an IT-related descriptive component. So for each IT-related company, there can be only one Jasper.
Note: For the unique component, you can’t have abbreviations, adjectives and generic words. So BBC or XYZ would be rejected, as would Good Quality Biscuits. The words bank, exchange and stock exchange, unless approved by RBI or SEBI, would also be rejected.
2. Descriptive Component
The descriptive component depends on the business you’re in. If your in Snapdeal’s business, you would pick Technology Services, which has nine options: Infotech, Infosystems, Tech Solutions, Technology Solutions, Tech, Computers, Innovations, Processors and Informatics.
3. No Common Trademark
In certain cases, if the name you pick clashes with a well-known trademark, the RoC may object to it. In this case, you can only go ahead with this name if you are able to get a No-Objection Certificate from its owner.
Remember, though, when picking a name for your company that it does not matter. As you can see from the example above (of Jasper Infotech and Snapdeal), it’s your trademark that matters to your customers, not your company’s name.
[This is a guest Post by Hrishikesh Datar, founder of Vakilsearch.com, which specialises in facilitation of company and trademark registration. You can access the company name check tool here.]