Page 231 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes 9.4 Guidelines for Availability of Names

According to the clarifications issued by the government, in following cases, a name is considered
undesirable and a company is not allowed to be registered with such a name:

1. If the name is identical with or too nearly resembles the name by which a company is
already registered, or the names under which well known firms and other bodies are
doing business, then such names are considered undesirable for a new company.
2. If the proposed name is identical with or too nearly resembles a name of a company in
liquidation, then adoption of such a name by a new company is considered undesirable. It
is because the name of the company in liquidation is borne on the register of companies
maintained by the registrar till it is finally dissolved. Further, a name which is identical
with or too closely resembles the name of a company dissolved as a result of liquidation
proceedings, cannot also be allowed for a period of two years from the date of such
dissolution, since the dissolution of the company could be declared void within the period
aforesaid by an order of the court under s. 559.

3. If the proposed name differs from the name of an existing company merely in the addition
or subtraction of word like New, Modern etc., then the new name (such as New Bata Shoe
Company, Nav Bharat Electronics, etc.) should not be allowed.
4. Where the proposed name closely resembles a popular or abbreviated description or
names of important companies (e.g., TISCO, ICI, WIMCO, etc.) then, such words should
not be allowed as name of a new company even though they have not been registered as
trade marks by the existing company.

5. A name, the use of which is prohibited under the provisions of Emblem and Names
(Prevention of Improper Uses) Act, 1950.
6. Any name for the proposed company which connotes government participation or
patronage is considered undesirable unless circumstances justify. Thus, the words National,
Union, Central, President, Rashtrapati, etc., cannot be used as a part of the name of a new
company.
7. Any name for the proposed company, which implies association or connection with, or
patronage of a national hero or any person held in high esteem is considered undesirable.
Thus, the words ‘Mahatma Gandhi’, ‘Jawahar Lal Nehru’, cannot be used as a part of the
name for a company.
8. Any name for the proposed company, which includes the word ‘cooperative’ (or sahkari
or the equivalent word of ‘cooperative’) in regional languages of the country.
9. Where the proposed name of the company includes a proper noun, which is not a name or
a surname of a director, then such a name is considered undesirable. However, for
sentimental reasons, sometimes the names of relatives such as wife, son and daughter of
the director may be allowed, provided one other word suggested makes the name quite
distinguishable.
10. The proposed name of company shall not be allowed, where it includes the name of a
registered trade mark unless, the consent of the owner of the trade mark has been produced
by the promoters.
11. Where the name of the proposed company is intended or is likely to produce a misleading
impression regarding the scope of its activities, which would be beyond the resources at
its disposal.

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