Legal name of the entity and trademark registration are two different things – Must read for Startups
Start-ups often assume that the name envisioned by them will be granted by ROC and following the assumption, they start using the same as their domain or otherwise. In this article, we are stressing on the point that Legal name of the entity and trademark registration are two different things.
Having said that, if there arises a situation where the promoters insist on a particular word or phrase to be included in the proposed name and the ROC insists on the contrary, then there indeed is an alternative way.
We, having faced and successfully dealt with such situations recommend that the startup might avail the registration for their private limited company with a different legal name and subsequently obtain trade-mark on the desired name under the incorporated company with the different legal name.
Few points to remember before fixing on a name:
- First and foremost, before zeroing in on any name, the start-up should keep in mind that the proposed name is not considered “undesirable” by the ROC (Section 20 of Companies Act). A proposed name is considered undesirable if it too nearly resembles:
- a) Name of a company in existence and names already approved by the Registrar of Companies; OR
b) Name of a LLP in existence or names already approved by Registrar of LLP;
c) A registered trade-mark or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999.
- The applicant should also conduct a public search pertaining to the trade-mark or patent on the words to be used in the name.
- The proposed name should not be such that it violates the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time.
- The proposed name should not contain profanity or words or phrases that are generally considered a slur against an ethnic group, religion, gender or heredity.
- The desired name should reflect the principal business operations that the proposed company wishes to follow post its incorporation.
- The words “Pvt Ltd”, “Ltd”, “LLP” shall not be regarded as a distinguishable feature while differentiating a name from the other. Similarly, the plural version of any of the words appearing in the name, type and case of letters, spacing between letters and punctuation marks, joining words together or separating the words, use of a different tense or number of the same word, using different phonetic spellings or spelling variations, exact inter-lingual translations of the same word, abbreviated names are also disregarded while granting the name for a start-up. The inclusion of the words like “State” or only the name of a continent, country, city, etc. is also not allowed. E.g.: West Bengal Limited or America Ltd., etc. If the proposed name contains any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of the Central Government, any State Government, or any local authority, corporation or body constituted by the Central or any State Government under any law for the time in force shall not be allowed, unless the previous approval of Central Government has been obtained for the use of any such word or expression.
The above guidelines are prescribed following the Circular 45-2011 issued by the Ministry of Corporate Affairs. The ROC has been vested with the power to withdraw the name allotted to a company any time before the registration of the Company. However, ROC will pass a specific order giving reasons for withdrawal of name, with an opportunity to the applicant of being heard, before withdrawal of such name. This rule applies to all the name reservation forms, even those that are taken Straight Through Process (STP). Even after the incorporation, the company might be asked to change its name u/s 22 by the Central government if it comes to his notice or is brought to his notice through an application that the name too nearly resembles that of another existing company or a registered trademark.
Thus to Conclude –
An important aspect that needs to be highlighted here is the difference between the brand name and legal name. The brand name of a company might be identical with the legal name of the company. However, it can also be different. A particular name might not be available as legal name through the ROC but that does not disqualify it to be the brand name for that particular company. A very easy and literally close example would be of Taxmantra.com itself; where in the legal name of the company is TM Solutions Private Limited, wherein Taxmantra.com as a brand is registered under trademark and copyright for a class of services and product, the owner of which is TM Solutions Private Limited.
A name is the visage of the artificial judicial persons like company, LLP, etc. Hence, securing an unique and meaningful name should top the priority list of all requirements with regards to company incorporation, also if the founder of the startup feels that a particular phrase or word can be successfully trademarked for a class of services or products, then the same can be trademarked or copyright under the legal name of the entity.