When choosing a company name, there are numerous dos and don'ts to keep in mind. Keeping these in mind, a proper name should be picked because a business's name has the ability to create or break the enterprise; also, certain names are restricted or prohibited by MCA company naming laws. So, here is the post that will contain all of the information on the MCA Restricted Words for a Company Name.
Company Name Registration by MCA
Before a company or LLP (Limited Liability Partnership) may be incorporated in India, the Ministry of Corporate Affairs (MCA) must first approve the new entity's name. In RUN Form, promoters can list up to two names in the order of selection. Depending on the availability of the company name, one of the provided names would be accepted. If none of the submitted names are suitable, the promoter will be encouraged to resubmit the application with additional new names. One of the most common reasons for rejecting a proposed company name is that it contains terms that are prohibited by the Companies Incorporation Rules.
It is necessary to affix words with suffixes like Limited or Public Limited.
- When a business is registered as a public limited company, the word "Limited" must come after the company name.
- A business name that is registered as a private limited company must have the words "Private Limited" at the end.
- Important Information: Section 8 enterprises and government-owned companies are exempt from this rule.
List of restricted words
The list below includes a list of restricted words. There is no combination of these words with any other words or terms that have a similar meaning in any other language.
- Small Scale Industry
- Development Scheme
- Court or Judiciary
- Forest Corporation
- Development Authority
- khadi and Village Industries Corporation
- Prime Minister or Chief Minister
Insights on words that are restricted by MCA
1. Words Requiring MCA Approval
When a proposed name contains words like "insurance," "bank," "stock exchange," "venture capital," "asset management," "nidhi," "mutual fund," etc., the proper regulators, including RBI, IRDA, SEBI, MCA, etc., must give their approval.
2. The company name contains a city or a name of a foreign nation
If a company name includes the name of a foreign country or city, the name can only be approved if the promoters can show they have close commercial relations with the country in concern.
3. Words that signify a certain sort of corporate structure
Any word that denotes a different kind of corporate structure or legal person, such as cooperative, Trust, LLP, Partnership, Society, Proprietor, HUF, Firm, Inc., PLC, GmbH, SA, PTE, AG, etc., cannot be used in any part of a company name.
4. Language must be illustrative
If the company's major operation is financing, leasing, chit funds, investments, securities, or a combination of these, the company name must be informative of the related financial activity, such as Chit Fund, Investment, or Loan.
When forming a company in India, you have to propose and have authorized a name by the Ministry of Corporate Affairs. If the standards of the Company (Incorporation) Rules, 2014 are not fulfilled, the proposed name may be rejected. As previously stated, certain words are restricted by MCA, and if a Business Owner chooses certain words, MCA (Ministry of Corporate Affairs) will refuse the Company Name Approval.