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According to the Companies Act 2013, a private limited company is an entity that should have a minimum of 2 members and a maximum of 200 members. The best part about forming a company in the form of a private limited company is that the liability of the partners is limited to the assets of the company. However, a Private Limited Company should have a minimum of 2 directors and a maximum of 15 directors. It is not possible to transfer the shares of a private limited company, which makes it one of the best forms of ownership. In this article, we will tell the process for the private limited company name check.
Private entities, especially start-ups, expect expedited solutions. However, the cumbersome processes followed by the Government prevent smooth operation. It leads to the development of frustration among entrepreneurs while dealing with authorities. As per them, the processing time of the Registrar of Companies (RoC) is inadequately slow, leading to wastage of time and resources.
Getting the name of a Private Limited Company approved is a tedious task in itself. It is a time-consuming affair to follow all the RoC rules, and find out which names are already taken/registered. This process can be made easy by making use of a tool for checking the availability of company names. The database is updated regularly to ensure the validity of data. It lists, along with the Corporate Identification Number (CIN), the companies that have the same or similar names, based on the search results. The tool informs whether a particular company name is available or not, thereby providing heads start in the name selection process.
Earlier, the INC29 allowed an applicant to submit six names in order of preference. Following the amendments in May 2015, INC29 now admits just one name. So, this has increased the risk factor manifold. An applicant must know all the rules before specifying a name in the application, or risk rejection. One ideal way to ensure selection of the name, as suggested by RoC, is to come up with a unique name followed by the business type (descriptive type). It works in the following manner: in the recent Amendment in 2018, the now Private limited company can apply for only one name and there is no resubmission process. Hence, if the name is rejected again Inc-1 has to fill with additional fees. The name of the proposed private limited company must be in accordance with the Companies Act 2013 and recent guidelines issued by MCA from time to time.
Also, Read: Private Limited Company Registration in India and Requirements.
For example, the online shopping portal ‘Snapdeal’ has its company registered as Jasper Infotech Private Limited. Although the unique part of the name ‘Jasper’ is actually quite common, still it got registered. The trick was the addition of ‘Infotech’ in its name. There are a lot of companies with the name ‘Jasper’, but just one IT-related company with the same name.
Note: Abbreviations, adjectives and generic words are inadmissible for the unique component. So, options like BBC, ABC, or XYZ would be rejected. Similarly, names such as ‘Good Quality Biscuits’ or ‘Excellent Chocolate’ would not be registered. Unless approved by Reserve Bank of India or Securities and Exchange Board of India, words like ‘Bank,’ ‘Exchange’ and ‘Stock Exchange’ would be rejected as well. you may keep the business names and legal as different. for securing your business name you should apply for trademark registration. Company name check is one of the most important steps in the name reservation of a private limited company.
The nature of the business determines the components. For a company like Snapdeal, one has to choose Technology Services, which has nine options: Info-systems, Infotech, Tech Solutions, Tech, Computers, Technology Solutions, Innovations, Informatics and Processors,
Sometimes, if the chosen name clashes with a well-known trademark, the RoC may have objections to it. In such cases, the applicant can only go ahead with the proposed name if a ‘No Objection Certificate’ can be furnished from the owner of the Trademark. One should remember that while picking the name for a company, the name actually does not matter. As evident from the example of Jasper Infotech and Snapdeal, what matters to the customers is the Trademark, and not the company’s registered name.
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