Words that are restricted by MCA for a Company Name: All you need to Know
There are many dos and don’t s while coming up with a company name. Keeping those in mind, a suitable name should be chosen because a company’s name has the power to make or damage the enterprise, not only that but certain names are restricted or prohibited from MCA company naming guidelines. So here is the article that will includes all the information on the Words that are Restricted by MCA for a Company Name.
Table of Content
Insights on words that are restricted by MCA for a Company Name
The Ministry of Corporate Affairs (MCA) must first approve the proposed entity’s name before a company or LLP (Limited Liability Partnership) may be registered in India. Promoters can list up to two names in RUN Form, in the order of choice. One of the requested names would be accepted depending on the availability of the company name. The promoter will be invited to resubmit the application with additional new names if none of the proposed names are suitable. One of the main grounds for rejecting a proposed company name is because it contains phrases that are against the Companies Incorporation Rules.
Suffixes like Limited or Public Limited must be added to words.
- The term “Limited” should be at the end of the company name when it is registered as a public limited company.
- The words “Private Limited” should come at the end of the company name that is registered as a private limited company.
Important Note: Government-owned businesses and section 8 enterprises are exempt from this rule.
List of words that are restricted
The words that are restricted are listed in the list below. These words cannot be combined with any other words or terms with comparable meanings in any other language.
- Small Scale Industry
- Development Scheme
- Court or Judiciary
- Forest Corporation
- Development Authority
- Development schemes or the use of the word “scheme” in conjunction with the names of any government, state, India, or any government authority, or in anyway similar to the programmes introduced by the Central, State, or Local Government or Authorities, are prohibited.
- khadi and Village Industries Corporation
- Prime Minister or Chief Minister
Words that Need MCA Approval
When a proposed name includes terms like “insurance,” “bank,” “stock exchange,” “venture capital,” “asset management,” “nidhi,” “mutual fund,” etc., the appropriate regulators, such as RBI, IRDA, SEBI, MCA, etc. must give their approval.
Company Name includes a foreign country name or a City
If a company name contains the name of a foreign nation or city, the name can only be granted if the promoters can demonstrate that they have substantial business ties to that nation.
Words that denote a specific type of business constitution
Any component of a company name cannot contain words like cooperative, Trust, LLP, Partnership, Society, Proprietor, HUF, Firm, Inc., PLC, GmbH, SA, PTE, AG, etc. that are indicative of a different sort of business constitution or legal person.
Words must be descriptive
The company name must be descriptive of the associated financial activity, such as Chit Fund, Investment, or Loan, if the company’s primary business is financing, leasing, chit funds, investments, securities, or a mix of these.
Suggested Read: Reasons for Company name Rejection
When you form a company in India, you must propose a name and have it approved by the Ministry of Corporate Affairs. The proposed name can be rejected if not followed under the guidelines of Company (Incorporation) Rules, 2014. As mentioned above there are certain words that are restricted by MCA, and if a Business Owner select those words then that Company Name Approval is rejected by MCA (Ministry of Corporate Affairs).
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