What are the Rules for Selecting the Names of a Company?

Choosing a name for your company is one of the building stones of building a business empire. You should choose a name that not only represents your business, but also a legacy. The Companies Act of 2013 has laid down some rules and regulations for selecting a name for your agency while small businesses setup in India. According to it, the list of the words you can use for your company is mentioned.

It has bifurcated the end words of a company’s name by characterizing it on the basis of the nature of business. For instance, if the company is a public limited, it shall end with (Ltd.), if the company is a private limited, it must end with (Pvt. Ltd.), so on and so forth.

A very interesting notion suggested by the Companies Act 2013 is that in order to use certain words in your company’s name, your company’s capital must match the authorized figures of capital for that specific word. For example, in order to use the word ‘corporation’, your company’s capital must at least be 5 crores INR. For using the words Enterprises, Products, Business, and Manufacturing you must have a minimum capital turnout of 10 Lakh INR.


Let’s discuss some guidelines issued by the authorities regarding choosing a name for a Company:


  1. The name of your company cannot be pre-existent in the names of registered companies. This implies that you need to choose a unique name for your company, one that isn’t used by any other organization. You cannot name your company similar to another company, even if you change the punctuation, spacing, and plurality of the name. Moreover, even adding abbreviations, titles, changing tenses, adding synonyms, or jumbling the sequence of words won’t help. You simply need to come with a new, entirely different name altogether in order to get registered.


  1. The name of your company must not be offensive to insensitive towards the sentiments of any community, or group, gender, ethnicity, religion, etc.


  1. The name of the company must reflect upon the ideals of the company meaning, that must explain the purpose of the company, and the work it conducts. For e.g., if you are in the furniture industry, then the name of your company must reflect that.


  1. If you are naming the company after a person or your dear ones, you must have legal proof of your relationship with them. For e.g., if you are naming your company after your wife, you can use your marriage certificate as proof.


  1. If you add a foreign country’s name in your company’s name, you must present a Memorandum of Understanding establishing your business connection with that particular nation.


  1. Private companies cannot use the word ‘state’ in their companies’ names as it can only be issued by a government agency or public limited company.


  1. You cannot name your company after a vague or abbreviated word that cannot be recognized as being meaningful or purposeful.


Whether you are a small business set up in India or looking forward to setting up a new business opportunity, choosing a unique name not only attracts a larger customer base, but also potential investors.