Yes, there are certain rules to follow in choosing the name of the company. Memorandum of Association of the company as per Section 13 of companies Act 1956 must specify the name of the company. The promoters of the company should choose at least six desirable names and file an application in Form 1A to enable the Registrar where the proposed company is to be established to check for the availability of those names. The Registrar within 7 days from the receipt of the application of the promoter shall provide the information on the name availability of the company. Also, name of the public company must end with words “limited” and end with words “private limited” in case of private company.
Section 20 of the Act states that a company is barred to register the name of company which is already existed for another company or undesirable name or the name closely resembles to the already existing name. Also, the company is barred from using the name of the company which is prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950.
If the name chosen by the Promoters found to be undesirable, the registrar may reject the same and inform the applicant to resubmit the application form with new desirable names within 3 days from the date of receipt of application. The applicant is given two opportunities for re-submission of proposed names of the company.
Once the name is approved by the Registrar, the promoters are required to adopt the approved name within 60 days from the date of name allowed. If the name is not adopted within the stipulated period, the applicant is required to apply with the Registrar for extension of such approved name for further period i.e. 30 days. No further extension is permitted after these 90 days from the date of approval of the name. The Ministry of Company Affairs vide its notification dated 5/1/1990 directed the Registrar of Companies to register the company only in cases where the promoters mentioned in the availability of name application are also the subscribers of Memorandum of Association of the proposed company at the time of registration in order to prevent the pre-emption of names by the promoters.
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Adv. Anitha Gutti