Company Name Reservation – That’s how you do it

Following the revision to the Companies Act, the process of forming a private limited company has changed. Previously, you had to file a separate form with MCA for a company name reservation.

However, there are two ways to apply for the name currently.

The first option is to use the MCA portal to submit a separate web-based application.

Another option is to apply for a name via the private limited company registration form.

Reserve your Company Name through RUN by MCA

RUN (Reserve Unique Name) is a web tool that allows you to reserve or change the name of your business.

It assists you in determining whether or not the company name is distinctive.

All applications relating to company names were available in form INC-1 before the introduction of the RUN form of MCA (Ministry of Corporate Affairs).

Requirements for reserving a Name

Keep the following points in mind for filling out the RUN form on MCA to apply for a company name.

  • A Unique Name
  • An MCA account
  • CIN (Corporate Identification Number)

Things to do before applying for Company Name Reservation

  • Choosing a Company Name

The governing law establishes a set of guidelines for naming a business.

The government does not approve the names that do not follow the guidelines. There must be three elements to the unique company name.

  • Firstly, a one-of-a-kind or newly coined term.
  • Secondly, any suffix must be there.
  • Thirdly, it should have a private limited company, one person company (OPC), or a public limited company (PLC) at the end.

A private limited company’s name must finish with “private limited.”

Furthermore, the name must not be identical or similar to any other corporation or limited liability partnership.

  • Verifying the Availability of a One-of-a-Kind Name

Following the company name reservation, the next step is to see if the name is available.

To avoid rejection, double-check the availability of the firm name.

Therefore, check the name on the MCA site and for a trademark as well.

It is not possible to file a trademark application for a name that already has a trademark owner.

Step-by-Step Process for Company Name Registration

Step 1 – Go to the MCA Portal and Sign in

The company name registration application can only submit by MCA registered users.

Therefore, if you don’t have an account, you’ll need to make one or take help from a business service provider.

To make an account, choose “Register user” or “Business user” as the category and fill in all other details.

When creating the account, keep in mind that the same account will be used for any future company form filings.

Thus, it is always advisable to seek professional assistance for the purpose to avoid any rejections or delays.

Step 2 – Prepare the Documents

It is not necessary to submit any documents with the application to reserve the company name.

However, if you want to provide any further information, it can be attached in PDF format.

For this purpose, any of the following documents can be used:

  • Inform that if it’s a new company name registration request or a resubmission.
  • Type of business, such as a startup, an OPC, a producer business, or anything else.
  • If a company’s name changes, the CIN must be updated.
  • Provide two company names that you’d like to reserve as an alternate in case one is not available.
  • The company’s business activities and other information.

Step 3 – Online Application Submission for Company Name Reservation

Following the MCA’s announcement, various types of businesses can use the following e-forms to submit their applications.

PRIVATE LIMITED COMPANIES: Name reservations for business firms are divided into two categories:

a) For a new company’s incorporation: A New Spice+ Part A form can be filed to reserve a company name.

b) If you want to change the name of an existing company, you must file a RUN Form with the MCA.

LIMITED LIABILITY PARTNERSHIP: You must file the RUN LLP form to reserve a unique company name.

This categorization was created to help everyone with the process of reserving a name.

Step 4 – Payment of Application Fees

A Private Limited Company’s name application costs Rs. 1000, whereas a Limited Liability Partnership’s name application costs Rs. 200.

For submitting your application, you must pay the government fees online using a credit/debit card or NEFT.

It is a non-refundable cost.

After the payment of fees, it will generate a receipt with an SRN that can be used to trace the application or its progress.

Note: If the company name registration is submitted along with the SPICE incorporation form (Company Registration Form), there will be no additional price for the name reservation.

Step 5 – Name Approval or Resubmission

After receiving the application, the MCA will process it within 2-3 business days.

On the MCA portal, go to MCA services – Track SRN/Transaction status to check the company name status.

If MCA discovers that the name is available, the ministry will authorize it and give a letter of permission.

Otherwise, a resubmission application has to be sent again.

The application status will change from “submitted” to “resubmission”.

Also, an email will be sent to the registered mail address with the reason for disapproval.

Moreover, the time limit for resubmitting the form will be mentioned in the mail.

The application will reject if you do not submit it by the deadline.

Note: You get one chance for resubmission of the company name reservation. After that, it rejects automatically.

So, you’ll need to submit a fresh application along with the fees.

Validity of Name after Company Name Registration

The authorized name will be held for 20 days after it approves.

Otherwise, the applicant must file the form for incorporation within that time frame, or the name will expire.

If the applicant is unable to submit the form by the deadline, they must submit a new name application on MCA using the RUN form.

Following the latest MCA update, you can now ask for an extension of the validity period by paying an additional price of Rs. 1000/-.

Benefits of Registering a Company Name

Secures your company name until you’re ready to incorporate: The most significant benefit of reserving a business name is that you may prohibit other entrepreneurs from using it until you’re fully prepared to start the creation process. When you know your name will be waiting for you when you’re ready, there’s no reason to rush.

It’s simple to save a name: The paperwork you’ll need to fill out to register your name reservation is simple. However, the information required varies slightly from state to state. You’ll only need to give them the name you want, the type of corporate company you’re reserving it for, your name and address, and other standard information in most states.

Drawbacks of Company Name Registration

It’s expensive: You will have to pay a registration fee regardless of where you reserve your name.

Reservation for a certain period: When you file a reservation for a business name, it doesn’t offer you indefinite rights to that name, and you should be near to the formation process when you do so. It is because your reservation is only valid for 20 days. You can always renew your registration. But each time you do so, you’ll have to pay the filing cost again. Therefore, Register your company with the name to avoid this.

 All the same, processes go for company registration in Mumbai.

Author
Starteazy