Updated: Feb 25
Section 6 of the Companies Act, 2013 deals with the restrictions on the use of certain names for a company. It provides that no company shall be registered with a name that:
Is identical with or too nearly resembles the name of an existing company;
Is identical with or too nearly resembles the name of a registered trademark or a trademark which is subject to an application for registration;
Includes words that are offensive or undesirable;
Suggests association or connection with the government, a state or a local authority, or any corporation owned or controlled by the government;
Includes the words "British India" or "Empress" or "Emperor";
Suggests the patronage of the government or any of its departments or agencies;
Is such that it violates the provisions of any other law.
Some relevant case laws and rules related to Section 6 of the Companies Act, 2013 are:
In Re : Shakti Press Limited: In this case, the proposed name of the company included the word "Shakti", which was already a registered trademark of another company. The Registrar of Companies refused to register the name of the new company, and the court upheld the decision, stating that the proposed name was identical with or too nearly resembled an existing registered trademark.
Companies (Incorporation) Rules, 2014: Rule 8 of the Companies (Incorporation) Rules, 2014 provides that a name that is too similar or identical to an existing company or trademark shall not be approved by the Registrar of Companies.
Section 20 of the Trade Marks Act, 1999: Section 20 of the Trade Marks Act, 1999 provides that the use of a trademark that is identical or similar to a registered trademark in relation to similar goods or services is prohibited, and can lead to legal action.
In the case of J. Kumar Infra Projects Limited v. Municipal Corporation of Greater Mumbai, the proposed name of the company was "Municipal Corporation of Mumbai Infrastructure Development Corporation Limited". The court held that the use of the words "Municipal Corporation of Mumbai" was not permissible as it suggested an association with a local authority and could mislead the public.
In the case of Meenakshi Mills Ltd v. Registrar of Companies, Madras, the proposed name of the company was "Meenakshi Mills (India) Limited", which was already a registered trademark. The court held that the use of the name would create confusion and lead to the infringement of the trademark.
The Companies (Incorporation) Rules, 2014 also provide for specific guidelines for the use of certain words in the name of a company, such as "India", "National", "State", "Union", "Federal", "Republic", "President", "Prime Minister", "Chief Minister", etc. Companies must comply with these rules while choosing their name.
It is important for companies to comply with the restrictions and guidelines laid down in Section 6 of the Companies Act, 2013 and other relevant laws, in order to avoid legal complications and ensure a smooth registration process. Companies must conduct a thorough name search and seek approval from the Registrar of Companies before finalizing their name.
Apart from the restrictions on the name of a company, Section 6 of the Companies Act, 2013 also lays down provisions related to the change of name of a company. According to the section, a company can change its name by passing a special resolution and obtaining approval from the Registrar of Companies. The company must also update its memorandum and articles of association to reflect the new name.
Additionally, the section also requires companies to display their name and other relevant details on all their official correspondence, documents, and publications. Failure to comply with these provisions can result in penalties and fines.
In conclusion, Section 6 of the Companies Act, 2013 is an important provision that regulates the naming of companies in India. It lays down specific guidelines and restrictions on the use of certain words and phrases in the name of a company. Companies must comply with these provisions to avoid legal complications and ensure a smooth registration process. They must also ensure that their name is displayed correctly on all official correspondence and documents.
By Siddharth Dalmia
The StartUp Sherpa