Name Reservation for LLP & Company

Introduction

Name reservation is a critical first step in the formation of a Limited Liability Partnership (LLP) or a company in India. This process, governed by the Ministry of Corporate Affairs (MCA), involves securing a unique and legally compliant name for your business entity. At ComplyQuick, we offer specialized services to assist entrepreneurs and businesses in navigating the name reservation process efficiently and effectively. This comprehensive service description outlines the importance, requirements, and detailed steps involved in name reservation for LLPs and companies as per MCA guidelines.

Importance of Name Reservation

Reserving a name is essential for establishing the identity of your LLP or company. A unique and appropriate name not only distinguishes your business from others but also complies with legal requirements set forth by the MCA. The name must be unique, reflective of the business’s nature, and free from any similarities with existing entities to avoid legal issues. Proper name reservation ensures that the chosen name is protected and exclusively associated with your business, which is crucial for branding and legal purposes.

Legal Framework and Compliance

The name reservation process for LLPs and companies is governed by the Companies Act, 2013, the Limited Liability Partnership Act, 2008, and the Companies (Incorporation) Rules, 2014. Key sections and rules relevant to name reservation include:

• Section 4 of the Companies Act, 2013: Specifies the requirements for the name of a company.
• Rule 8 of the Companies (Incorporation) Rules, 2014: Provides guidelines for name availability and reservation.
• Section 15 of the Limited Liability Partnership Act, 2008: Details the requirements for the name of an LLP.
• Rule 18 of the LLP Rules, 2009: Governs the process of name reservation for LLPs.

Process of Name Reservation for LLP

Reserving a name for an LLP involves several steps, from checking name availability to filing the application with the MCA. Below is a detailed overview of each step involved in the process:

1. Name Availability Check

The first step in the name reservation process is to check the availability of the desired name. This can be done using the MCA’s online portal, where you can search the database of existing LLP names to ensure that the desired name is unique and not already in use.

The name must comply with the naming guidelines set forth by the MCA, which include:

• The name should not be identical or similar to the name of an existing LLP or company.
• The name should not contain any prohibited words or phrases.
• The name should reflect the nature of the business and not be misleading.

2. Selection of Names

Once the name availability check is completed, you should select up to six preferred names in order of priority. RoC will review the names in the order provided and approve the first available name that meets the guidelines.

3. Filing Form LLP-RUN

To reserve the selected name, you need to file Form LLP-RUN (Limited Liability Partnership-Reserve Unique Name) with the MCA. This form includes details such as:

• The selected names in order of preference.
• The business activity of the proposed LLP.
• The digital signature of the applicant.

You must submit the form electronically through the MCA portal and pay the applicable fees at the time of submission.

4. Verification and Approval by RoC

Upon submission, the RoC verifies the details provided in Form LLP-RUN and checks the availability and compliance of the proposed names. If the RoC is satisfied with the information, the name is approved and reserved for the LLP. An approval letter is issued, confirming the reservation of the name for a period of 90 days.

Process of Name Reservation for Company

The name reservation process for a company is similar to that of an LLP but involves specific forms and additional considerations. Below is a detailed overview of each step involved in the process:

1. Name Availability Check

As with LLPs, the first step is to check the availability of the desired name using the MCA’s online portal. The name should comply with the naming guidelines set forth by the MCA and should not be identical or similar to existing company names.

2. Selection of Names

Select up to two preferred names in order of priority for the proposed company. The selected names should reflect the nature of the business and comply with the MCA’s naming guidelines.

3. Filing Form SPICe+ Part A

To reserve the selected name, you need to file Form SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) Part A with the MCA. This form includes details such as:

• The selected names in order of preference.
• The type of company (Private, Public, One Person Company, etc.).
• The business activity of the proposed company.
• The digital signature of the applicant.

You must submit the form electronically through the MCA portal and pay the applicable fees at the time of submission.

4. Verification and Approval by RoC

Upon submission, the RoC verifies the details provided in Form SPICe+ Part A and checks the availability and compliance of the proposed names. If the RoC is satisfied with the information, the name is approved and reserved for the company. An approval letter is issued, confirming the reservation of the name for a period of 20 days, within which the company incorporation process must be completed.

Responsibilities of the Applicant

The applicant has several responsibilities to ensure compliance with the statutory requirements for name reservation. These include:

Timely Filing

The applicant must ensure timely filing of the name reservation forms to avoid delays and complications in the business formation process. Delays can result in the desired name being taken by another entity.

Accurate Documentation

Accurate documentation is essential for the successful reservation of the name. The applicant must provide all details in the forms and attached documents correctly and completely.

Maintaining Records

The applicant must maintain proper records of the name reservation approval and any correspondence with the RoC. These records should be readily available for inspection by regulatory authorities and stakeholders.

Consequences of Non-Compliance

Non-compliance with the requirements for name reservation can have severe consequences, including:

Rejection of Name

Failure to comply with the naming guidelines can result in the rejection of the proposed names, leading to delays in the business formation process.

Legal Complications

Non-compliance can lead to legal complications, including disputes with existing entities and regulatory authorities. This can damage the business’s reputation and affect its operations.

Penalties

Non-compliance with the statutory requirements for name reservation can attract penalties for the applicant.If the MCA finds the information in the name reservation application false or misleading, the applicant may face penalties. This includes a fine ranging from INR 1,000 to INR 5,000 for providing incorrect information.

Benefits of Professional Assistance

ComplyQuick services for name reservation offers several benefits, including:

Expertise and Knowledge

ComplyQuick has in-depth knowledge of MCA regulations and naming guidelines. Our expertise ensures accurate and efficient compliance with all statutory requirements.

Time and Resource Efficiency

ComplyQuick allows entrepreneurs and businesses to focus on their core activities while professionals handle the compliance tasks. This saves time and resources and ensures timely and accurate filings.

Risk Mitigation

ComplyQuick helps mitigate the risk of errors and non-compliance. Our thorough understanding of the regulatory landscape and meticulous approach to name selection and form preparation minimize the risk of rejection and legal complications.

At ComplyQuick, we offer comprehensive services to help entrepreneurs and businesses meet their name reservation obligations, ensuring efficient and effective compliance with all regulatory requirements.

Our expertise in navigating the complexities of the Companies Act, 2013, and the Limited Liability Partnership Act, 2008, coupled with our commitment to accuracy and transparency, ensures that your business entity secures a unique and legally compliant name. Contact us today to learn more about our name reservation services and how we can support your business in achieving compliance and establishing a strong legal foundation.