Company Name Approval: Why MCA Rejects Names

Choosing and getting your company name approved is the first official step in company registration. It sounds simple, but a significant number of name applications get rejected by MCA every day due to naming guideline violations, similarity with existing entities, or improper formatting. Understanding the naming rules, common rejection reasons, and smart naming strategies will help you get your preferred name approved on the first attempt.

How Company Name Approval Works

Option 1: SPICe+ Part A (During Incorporation)

When you file the SPICe+ form for company incorporation, Part A handles name approval. This is the most common method:

• Cost: No additional fee (included in SPICe+ filing fee)
• Name options: You can propose up to 2 names in order of preference
• Processing: CRC approves or rejects within 1 to 3 working days
• Validity: 20 days from approval to complete Part B of SPICe+

Option 2: RUN Form (Standalone Reservation)

If you want to reserve a name before starting the full incorporation process:

• Cost: Rs. 1,000 per application
• Name options: Up to 2 names in order of preference
• Processing: CRC processes within 2 to 5 working days
• Validity: 20 days from approval to file SPICe+ for incorporation
• Resubmission: If both names are rejected, you can apply for RUN (Resubmission) once without additional fee

Company Name Format Rules

MCA requires company names to follow a specific format:

Complete example: IncorpX Business Solutions Private Limited

Name Significance Section

When applying for name approval, you must provide a significance section that explains the meaning and relevance of the proposed name. This section should clearly describe:

• What the name means or stands for
• Whether the name is coined, derived, or has a specific meaning
• How it relates to the proposed business activity
• Whether it is an abbreviation and what the full form is

Top 10 Reasons MCA Rejects Company Names

1. Name is Identical to an Existing Entity

MCA maintains a database of all registered companies, LLPs, and trademarks. If your proposed name is identical or substantially similar to any existing entity, it will be rejected. Always search the MCA database before applying.

2. Name is Phonetically Similar

Names that sound alike when spoken, even if spelled differently, are rejected. For example, if "TechVista" exists, "TekVista" or "TechVysta" would likely be rejected for phonetic similarity.

3. Using Restricted or Prohibited Words

The following categories of words are restricted:

• Government-related: National, Government, Federal, Republic, Union, State, Official
• Regulated sector words: Bank, Insurance, Mutual Fund, Stock Exchange, Securities
• Professional designations: Chartered Accountant, Company Secretary, Architect (unless the entity is controlled by such professionals)
• Constitutional references: President, Parliament, Supreme Court
• Offensive or undesirable words: Words that are vulgar, offensive, or contrary to public policy

4. Name Contains Only Generic Words

Names that are purely generic or descriptive without any unique element are rejected. Examples: "Technology Private Limited", "Business Services Private Limited", "Trading Company Private Limited". You need a distinctive prefix.

5. Inadequate Significance Explanation

If the significance section does not adequately explain the proposed name, the CRC may reject it. Coined words, abbreviations, and unusual names need a clear explanation of their meaning and relevance.

6. Name Implies Government Connection

Any name that gives the impression of government affiliation or patronage is rejected. This includes using words like "India", "Bharat", "National" in a way that suggests government backing.

7. Name Conflicts with Registered Trademarks

If the proposed name conflicts with a registered trademark in the same or similar class, it may be rejected. MCA cross-references with the trademark database to check for conflicts.

8. Name is Too Short or Too Long

Very short names (single letters or very short words without meaning) and excessively long names may face rejection. The name should be practical, readable, and meaningful.

9. Name Contains Numbers Without Justification

Using numbers in the name (e.g., "247 Services" or "5Star Solutions") requires proper justification in the significance section. Numbers used arbitrarily may lead to rejection.

10. Name Uses Geographical Names Without Permission

Using state or city names (e.g., "Mumbai Technologies" or "Delhi Solutions") is generally allowed but may face scrutiny. Using country names or names of international cities may require additional justification.

How to Search for Existing Names

Before applying, use these methods to check if your desired name is available:

1. MCA Company Search: Go to mca.gov.in > MCA Services > Company/LLP Name Search. Search for your proposed name and variations
2. Trademark Search: Check the IP India website (ipindia.gov.in) for registered or pending trademark applications that match your name
3. Domain name check: While not a legal requirement, checking domain availability gives you a sense of name uniqueness
4. Google search: Search for the name to see if any unregistered entities are using it in commerce

Strategies for Getting Name Approval

• Use coined or invented words: Names like "IncorpX", "Zomato", "Infosys" are unique and face fewer conflicts
• Combine two meaningful words: "Tech" + "Vista" = "TechVista"; "Corp" + "Edge" = "CorpEdge"
• Use founder initials or names: "RSM Technologies Private Limited" (using founders' initials)
• Add a distinctive descriptor: Instead of "Solutions Private Limited", use "BrightEdge Solutions Private Limited"
• Prepare two strong options: Both name options should be equally good alternatives, not just one strong and one filler name
• Write a clear significance section: Explain the name thoroughly so the CRC officer understands your choice

What to Do If Your Name is Rejected

1. Read the rejection reason carefully: The CRC specifies exactly why the name was rejected (similarity, restricted word, etc.)
2. Use the RUN Resubmission: You get one free resubmission after initial rejection. Use it wisely by addressing the specific rejection reason
3. Modify the name: If the issue is similarity, change the distinctive prefix significantly
4. File a new application: If the resubmission also fails, file a fresh RUN form with completely different names (Rs. 1,000 fee)

Conclusion

Getting your company name approved is the gateway to incorporation. By understanding MCA's naming guidelines, avoiding restricted words, ensuring your name is distinctive, and writing a clear significance section, you can avoid the frustration of repeated rejections. Invest time in choosing a strong, unique name, research it thoroughly, and apply with confidence.

IncorpX helps founders choose and secure the perfect company name as part of our incorporation service. Our team checks name availability, ensures compliance with MCA guidelines, and handles the entire name approval process.