When starting a Private Limited Company in India, one of the first steps you must undertake is Name Reservation for a Private Company. This process, conducted via the Ministry of Corporate Affairs (MCA) portal, ensures that your desired name is available and complies with legal regulations. Let’s break down everything you need to know about securing a unique name for your private company.
What is Name Reservation?
Name reservation is a process where you first apply to the Ministry of Corporate Affairs (MCA) to secure the name of your private limited company before officially registering it. This way, you ensure that your chosen name is available and compliant with regulations before proceeding with incorporation. This guarantees that your chosen name is unique and meets the legal and regulatory standards required for business names in India.
Why is Name Reservation Important?
- Legal Protection: By reserving a name, you ensure that your business will be recognized as unique under the Companies Act, 2013.
- Brand Identity: The name is your company’s first impression in the marketplace. It represents your business and should be distinctive.
- Avoid Confusion: Name reservation prevents multiple businesses from using the same name, protecting your brand and intellectual property.
Steps for Name Reservation for a Private Company
1. Choose a Suitable Name
Selecting a name for your private limited company is the first step. Ensure the name:
- Is unique and doesn’t resemble any existing company names.
- Reflects the nature of your business and its activities.
- Ends with the suffix “Private Limited” to denote its status as a private company.
Pro Tip: Avoid names that could mislead customers or contain restricted words (e.g., “bank,” “insurance,” “stock exchange”).
2. Check the Availability of the Name
Before proceeding with the application, first verify if your desired name is available using the MCA name search tool. This helps you avoid rejections and delays. If the name is already taken, then consider modifying it or choosing an alternative. Once you confirm availability, you can proceed confidently with the name reservation process
- Use the MCA’s Name Availability Tool: Search for similar or identical company names using the MCA’s online tool.
- Trademark Search: Ensure the name is not already a registered trademark to avoid infringement issues.
If someone has already taken your desired name, you must choose another one.
3. Prepare Your Application
To apply for name reservation, there are two primary forms available:
- RUN (Reserve Unique Name) Form: This is a simple form used for reserving a name. Only one name can be submitted at a time. If it is available, the name will be reserved for 20 days.
- SPICe+ Form (Simplified Proforma for Incorporating Company Electronically): This is a more comprehensive form used for company incorporation. It includes the reservation of the company name, along with other statutory requirements for setting up the company. You can submit up to six name options in case your first choice is unavailable. This way, you increase the chances of getting approval without unnecessary delays.
4. Submit the Application
After selecting the name and filling out the application, you will need to submit it through the MCA portal.
With the RUN form, you reserve only the name, and incorporation occurs only when you complete the company registration.
With the SPICe+ form, once MCA approves the name, you can directly proceed with the incorporation process, as it includes both name reservation and other incorporation details.
5. Government Fees
There is a non-refundable fee for submitting a name reservation application:
- INR 1,000 for the RUN and SPICe+ application.
This fee is payable at the time of submission. It is important to note that even if the name is rejected, the fee is not refundable.
What Happens After You Apply?
Once you have submitted your name reservation application, the MCA will review it. You should expect to receive the following outcomes:
- Name Approved: If the name is approved, it will be reserved for 20 days.
- Name Rejected: If the MCA rejects your name, they will provide a reason. You can then apply again with a new name, but a new fee will be charged.
How Long is a Reserved Name Valid?
- Initial Validity: The reserved name for a private limited company is valid for 20 days from the date of approval.
- Extension of Name Reservation: If you fail to incorporate your company within this time frame, then you can request an extension of up to 20 more days. Under special circumstances, the extension may reach a total of 60 days.
Extensions require a payment of the prescribed fee.
Can I Change My Company Name After Reservation?
Once you incorporate your private limited company, you can change the name if needed. To do so:
- Pass a special resolution by the company’s board of directors.
- File for a name change with the Registrar of Companies (ROC) through the SPICe+ form.
However, changing the name after incorporation can be more complex, as it may require additional documentation and legal formalities. Therefore, it is essential to choose the right name from the beginning so as to avoid unnecessary complications later.
Reasons for Name Rejection
If the MCA rejects your name, it will first provide a detailed explanation. Afterward, you can review the reason and make the necessary adjustments. Once done, you may submit a new application with a revised name. Common reasons for rejection include:
- The name is too similar to an existing company name or LLP.
- It contains prohibited words or phrases, such as “bank,” “insurance,” or “national.”
- The name violates trademarks or intellectual property rights.
- The name is misleading or does not comply with the Companies Act, 2013.
In such cases, you will need to submit a fresh name reservation application.
Guidelines for Choosing a Name for Your Private Limited Company
To ensure your name is acceptable, here are some naming guidelines:
- The name should be unique and not cause confusion with other companies or trademarks.
- Avoid generic terms like “Best Services” or “Quality Products.” The name must be distinctive and reflect your business’s activities.
- Suffix “Private Limited”: The name must include this suffix to signify its legal status as a private limited company.
- The name should not be offensive or violate public policies.
- Avoid using terms that require special government approval, like “Bank,” “National,” or “India.”
Final Thoughts
Name Reservation for a Private Company is the first crucial step in forming a legally recognized entity. Reserving a name through the MCA portal is a straightforward process; however, it requires careful attention to detail. By carefully following the guidelines, thoroughly selecting a unique name, and ensuring compliance with legal requirements, you can successfully establish a strong as well as legally protected identity for your business.
Remember, once you reserve and receive approval for the name, then you can proceed with your company’s registration, thereby ensuring a smooth transition into the business world. Additionally, take the time to choose a name that reflects your business’s vision and ensures it stands out in the competitive market.
Are you ready to reserve your private limited company’s name? If so, start your journey today on the MCA portal and take the first step toward building your business identity.
