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Rules for Selecting Company Name Under the Companies Act

When you select a company name, it must comply with the Companies Act to ensure uniqueness and legal approval. Here are the key rules to follow:

Avoid Similar or Identical Names

Your company name must not closely resemble an already registered business. The ROC conducts a company name check, and if the proposed name is found to be too similar to an existing one, it will be rejected. For example, if "GreenTech Solutions Pvt Ltd" is already registered, "GreenTech Solution Pvt Ltd" may be rejected due to similarity.

Restriction on Certain Words

You cannot use words that suggest a connection with the Central or State Government, local authorities, or government bodies, unless prior approval is obtained. For instance, names like "India National Bank Ltd" or "Government Infrastructure Pvt Ltd" require special permissions.

Prohibited Expressions

Some words and expressions are restricted under Rule 8B of the Incorporation Rules. You must seek approval from the Central Government before using them in your LLP or company name.

Mandatory Suffix for Entity Type

The company name must clearly indicate its legal structure.

• A One Person Company (OPC) should have "(OPC) Private Limited" in its name.
  
• A Private Company must include "Private Limited" (Pvt Ltd).
  
• A Public Company must end with "Limited" (Ltd).
  

A Brief About Acceptable Name for LLP

An acceptable LLP or company name in India consists of three key components. The Name Part that gives the business a unique identity, such as "Bright" in Bright Solutions LLP. The Object Part that reflects the company's activity, like "Solutions" indicating a service-based business. The Constitution Part that defines the legal structure, such as "LLP" in Bright Solutions LLP.

Name Part

The Name Part is the unique and distinguishable element of a company or LLP name. It must comply with the Companies Act 2013 or the LLP Act 2008 and should not be identical or deceptively similar to existing companies, LLPs, or registered trademarks within the same industry. The ROC verifies the name to ensure distinctiveness and prevent duplication.

For example, a name like Bluewave Technologies LLP is acceptable because it is unique and clearly identifiable. However, Bluewave Tech LLP may be rejected as it closely resembles an existing name. Similarly, GreenVista Textiles Private Limited is a valid name, but Green Vista Private Limited may be considered too similar to an existing business and could face rejection. Ensuring a distinct name that does not match or closely resemble an existing company improves the chances of approval.

Object Part

The Object Part in a company or LLP name defines its primary business activity. It must be clearly stated to indicate the company's purpose and ensure compliance with naming regulations.

If two companies have similar name parts but different object parts, both names may still be approved, as long as they belong to distinct industries. However, names without a clear object part or with generic words like "dash Private Limited" are too vague and may be rejected by the ROC because it does not specify what the company does.

Related Read: Difference Between LLP and Partnership

Examples of Common Object Parts in Company and LLP Names

Constitution Part

The Constitution Part indicates the legal structure of the business. It must match the type of entity being registered, ensuring clarity in compliance and business operations. Here are the specific terms which are used for different entities:

• Private Limited Company (Pvt Ltd) - For privately held businesses
  
• One Person Company (OPC) - For single-owner companies
  
• Limited Company (Ltd) - For publicly listed businesses
  
• Limited Liability Partnership (LLP) - For partnership-based entities with limited liability
  

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Minimum Authorised Capital For Certain Words

When registering a company, using specific words in its name requires meeting minimum authorised capital requirements as per the Companies Act 2013. Words like "Corporation," "International," and "Industries" have higher capital requirements to ensure that only financially strong businesses use them. This helps maintain credibility and prevents misuse of these terms by companies with limited resources.

Before you apply to register a company name, verifying the capital requirements is essential to ensure compliance and avoid rejection. The table below outlines the required minimum authorised capital for specific words:

When Will Companies House Refuse to Register a Company Name?

Companies House may reject a name if it does not comply with legal guidelines. Below are the key reasons why a company name may be refused:

• Identical or Too Similar to an Existing Name: If the proposed name is the same or closely resembles an already registered company, it will be rejected.
  
• Offensive or Illegal Names: Any name containing offensive, abusive, or illegal terms will not be approved.
  
• Implying Government Affiliation: Names suggesting an association with the government, public authorities, or international organisations require special approval.
  
• Use of Sensitive Words or Symbols: Certain words, such as "Royal," "Bank," or "Trust," require prior consent before use.
  
• Misleading Use of Business Terms: Using terms like "Limited" (Ltd.), "Public Limited Company" (PLC), or "LLP" incorrectly or misleadingly can lead to rejection.
  

Objections to Company Names

Even after registration, objections to a LLP or company name may arise if it does not comply with legal requirements. Ensuring that the name is unique and non-misleading is crucial to avoiding disputes. Common reasons for objections include:

• Too Similar to an Existing Business: If a company name closely resembles another registered entity, the affected business can file an objection.
  
• Misleading Information During Registration: If false or inaccurate details were provided while registering the name, objections may be raised.
  
• Failure to Meet Registration Conditions: A name that does not adhere to naming regulations or lacks necessary approvals may face challenges.
  
• Opportunistic Registration: If a name is registered to take advantage of another company’s goodwill, it can be legally disputed.
  

Related Read: How much does an LLP cost in India?

How to Check Company Name Availability Online?

Before registering a company, you must check whether the proposed name is available to avoid rejection. The Ministry of Corporate Affairs (MCA) portal provides an online tool to verify company name availability. Here’s a step-by-step guide to checking a company name online:

1. Visit the MCA Website: Go to www.mca.gov.in.
2. Access the Name Availability Tool: Under the ‘MCA Services’ section, select ‘For Services’ from the drop-down menu and then select ‘Check Company/LLP Name’.
3. Enter the Proposed Name: Type the desired company name in the search box and click on the ‘Search’ button.
4. Review the Results: The portal will indicate whether the name is available or already registered.

Additional Checks for Better Approval Chances

• Trademark Search: Use the Razorpay Rize Name Search Tool to check for potential trademark conflicts.
• Alternative Name Options: Verify multiple name options to avoid rejection and ensure compliance with naming rules.

Conclusion

Choosing the right company or LLP name is crucial for legal compliance and brand identity. Ensure the name is unique, relevant, and adheres to MCA guidelines to avoid objections. Conduct a thorough name availability check on the MCA portal and verify potential trademark conflicts before finalising a name. A well-chosen name not only simplifies registration but also builds a strong brand identity while ensuring long-term legal compliance.

Frequently Asked Questions

Choose the Right Business Structure for Your Film Production Company

Your first decision is choosing the right legal entity. This impacts ownership, liability, taxation, funding, and compliance. Here’s how the most common options compare:

Private Limited Company

• Best choice for media companies aiming to scale, raise investment, or partner with OTT platforms.
• Offers limited liability protection, higher brand credibility, and Foreign Direct Investment (FDI) eligibility.
• Easier to bring in shareholders and attract funding from production partners or venture capital.

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LLP (Limited Liability Partnership)

• Suitable for small-to-mid scale production outfits.
• Combines the flexibility of a partnership with limited liability protection.
• Compliance is lower than that of a Private Limited Company but is still not as investor-friendly.

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Partnership Firm

• Easy to set up but offers unlimited liability, meaning partners’ personal assets may be at risk.
• Limited in terms of scalability and investor trust.

While an OPC (One Person Company) works well for solo ventures, it restricts ownership expansion and isn’t ideal for scaling or attracting investors. A Sole Proprietorship, though simple to set up, comes with unlimited personal liability and lacks credibility. So, both structures are generally not preferred for a growing film or media business aiming for scalability, credibility, and investor interest.

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Register the Production House as a Legal Entity

Once you choose your structure, follow these steps:

1. Obtain DSC for directors/partners.
2. Reserve your company name via the MCA portal.
3. Draft and file the MoA & AoA (for companies) or LLP Agreement.
4. File incorporation documents with the MCA.
5. Receive Certificate of Incorporation (COI), PAN, and TAN.

Register the Brand and Logo as a Trademark

Your production house’s name and logo are powerful brand assets that set you apart in a competitive entertainment industry. Protecting them early ensures that no one else can misuse your identity or ride on your hard-earned reputation.

Steps:

1. Trademark Search – Visit the IP India portal to check if a similar name or logo already exists.
2. Class Selection – Most media companies file under Class 41 (entertainment services) and Class 38 (broadcasting), but additional classes may apply based on your services.
3. File TM Application Online – Submit your application with the required documents and fees.
4. Examination & Objections – The Trademark Registry will review your application; be prepared to respond to any objections or clarifications.
5. Final Registration – Once approved, your trademark is valid for 10 years and can be renewed indefinitely, ensuring long-term brand protection.

Get Copyright Registration for Original Works

In the media business, your creative works- films, scripts, songs, storyboards, promotional videos- are valuable. Copyright registration legally secures these works, giving you the exclusive right to reproduce, distribute, adapt, and monetise them.
Steps: 

• Apply online at the Copyright Office website.
• Submit the required documents (work details, creator’s info, soft copies).
• Pay the applicable fee.
• Wait for scrutiny and the issuance of the certificate.

Join a Film Producers Association

Organisations like the Indian Motion Picture Producers' Association (IMPPA), Film Producers Association of India (FPAI), and Western India Film Producers Association (WIFPA) provide legal backing, industry recognition, and a platform for networking.

Benefits include:

• Access to legal advice and dispute resolution services
• Opportunities for co-productions and collaborations
• Industry events and workshops to stay updated on trends and regulations
• Collective bargaining power and advocacy on industry matters

To join, submit your company incorporation documents and proof of work (films, scripts, or projects). Complete the membership application process as per the association’s guidelines and pay the prescribed membership fees. 

Open a Current Account in Your Company’s Name

A current account is essential for managing your production house’s day-to-day financial transactions smoothly and professionally. Unlike a regular savings account, a current account offers higher transaction limits and facilities tailored for businesses, such as overdraft options and multiple signatories.

Documents Required:

• Certificate of Incorporation (COI)
• PAN card of the company
• Memorandum of Association (MoA) and Articles of Association (AoA)
• KYC documents of directors (identity and address proof)
• Proof of registered office address

Consider banks that offer robust digital banking platforms, ease of fund transfers, and competitive transaction charges. Also, check for value-added services like merchant accounts for receiving payments, foreign currency transactions, and working capital loans.

Get GST Registration and Import Export Code (IEC)

For production houses and media companies, GST registration is mandatory if your annual turnover exceeds the prescribed threshold (₹20 lakh or ₹40 lakh, depending on your state). GST compliance helps you claim input tax credits, maintain transparency, and avoid legal penalties.

If you work with international clients, monetise content on platforms like YouTube, or export your services globally (e.g., selling films or digital content overseas), obtaining an Import Export Code (IEC) is essential. IEC is issued by the Directorate General of Foreign Trade (DGFT) and acts as a license to conduct cross-border trade legally.

How to Apply:

• GST Registration can be done online via the GST portal by submitting PAN, business details, and bank information.
• IEC application is filed online on the DGFT portal, linked to your PAN, with processing typically completed within a few days.

Get Music, Scripts, and Third-Party IP Licenses

In the media and production industry, using music, scripts, or other creative content created by others requires proper licensing to avoid legal issues.

Common Types of Licenses:

• Sync License: Allows you to synchronise music with visual media like films or ads.
• Master License: Grants permission to use the original sound recording.
• Adaptation Rights: Needed if you plan to remake, translate, or modify existing works.

Key Licensing Bodies in India are IPRS (Indian Performing Right Society) & PPL (Phonographic Performance Limited).

Protect Digital Content and Manage Online Rights

In today’s digital age, safeguarding your media company’s content online is as important as creating it. With piracy and unauthorised sharing rampant, implementing strong digital protection measures helps you retain control and monetise your work effectively.

Here are a few ways you can protect and manage your digital content: 

• Digital Rights Management (DRM): Technology that restricts how digital content is accessed, copied, or shared, ensuring only authorised users can view or distribute your work.
  
  
• Content ID Systems: Platforms like YouTube use automated systems to identify copyrighted content and manage its use, including monetisation or takedown.
  
  
• Watermarking and Metadata Tagging: Embedding invisible or visible markers in your videos or music that trace the content back to you, deterring theft and helping prove ownership.
  

• DMCA Takedown Notices: Legal requests to platforms to remove unauthorised copies of your content.

Frequently Asked Questions (FAQs)

Budget 2024 Latest Update on Corporate Tax Rate

Finance Minister Nirmala Sitharaman has proposed a reduction in the corporate tax rate for foreign companies, bringing it down from 40% to 35% in the 2024 budget.

Subdivisions of Direct Taxes

Direct taxes in India are categorized as follows:

1. Personal Income Tax
   
   • Paid by individual taxpayers based on their income.
   • Taxed according to predefined slabs at different rates.
2. Corporate Income Tax (CIT)
   
   • Paid by domestic and foreign companies on their income earned in India.
   • The CIT is levied at rates specified by the Income Tax Act, subject to annual revisions in the Union Budget.

What is Pvt. Ltd. Tax Rate?

The Pvt. Ltd. tax rate refers to the corporate income tax rate applicable to private limited companies in India. Under the Income Tax Act, 1961, domestic companies are generally taxed at 30% on their total taxable income, with variations based on turnover and certain conditions.

For companies with a turnover of less than ₹400 crore, the tax rates are as follows:

• Turnover up to ₹1 crore: Taxed at 25%.
• Turnover between ₹1 crore and ₹10 crore: Taxed at 25% on profits exceeding ₹25 lakh, plus an additional ₹25 lakh.
• Turnover above ₹10 crore: Taxed at 30%.

A 4% Health and Education Cess is levied on the total tax payable.

Companies may also opt for a reduced tax rate of 22% under Section 115BAA, provided they forgo certain exemptions and deductions. This option also includes the surcharge and 4% cess.

Additionally, new manufacturing companies incorporated after October 1, 2019, can avail a 15% tax rate (plus surcharge and cess) under Section 115BAB, subject to specific conditions.

Corporate Income Tax Rate for AY 2022-23

The Corporate Income Tax Rate for the Assessment Year 2022-23 varies based on the company's turnover and the applicability of surcharge and cess. Here's a table summarising the effective tax rates:

For Companies with Turnover Above ₹400 Crore

For Companies with Turnover Below ₹400 Crore

Key Budget 2022 Updates

1. No Changes in Tax Rates: The corporate tax structure remained unchanged.

2. Updated Surcharge Cap for Cooperatives: Surcharge capped at 7% for cooperatives with income between ₹1 crore and ₹10 crore.

3. Set-Off for Losses in Case of Start-ups: Extended incorporation date for start-ups to claim tax holiday under Section 80-IAC to 31 March 2023.

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Income Tax Rate for Domestic Manufacturing Companies for AY 2022-23

New manufacturing companies incorporated in India on or after October 1, 2019, and commencing production before March 31, 2023, can avail a concessional tax rate for private limited companies of 15% under Section 115BAB. However, this is subject to certain conditions, such as:

• The company should be engaged in the business of manufacture or production of any article or thing
• It should not be formed by splitting up or reconstruction of an existing business
• It should not use any plant or machinery previously used in India (with certain exceptions)
• The option to avail Section 115BAB must be exercised in the first year of operation

The applicable tax rates for domestic manufacturing companies for the assessment year 2022–23 are outlined below:

Education Cess for Companies

Private limited companies are required to pay an education cess at the rate of 4% on the total income tax, including the applicable surcharge. Below is a detailed explanation of the corporate income tax rates for FY 2021–22 or AY 2022–23:

For companies with a turnover of up to ₹400 crore:

• Income up to ₹1 crore is taxed at 25%.
• Income exceeding ₹1 crore but up to ₹10 crore is taxed at 25% plus ₹25,00,000. A 7% surcharge applies.
• Income above ₹10 crore is taxed at 25% plus ₹2,50,00,000, with a 12% surcharge.

For companies with a turnover exceeding ₹400 crore:

• Income up to ₹1 crore is taxed at 30%.
• Income exceeding ₹1 crore but up to ₹10 crore is taxed at 30% plus ₹3,00,000. A 7% surcharge applies.
• Income above ₹10 crore is taxed at 30% plus ₹3,00,00,000, with a 12% surcharge.

The education cess of 4% is uniformly applicable to the total tax payable, including any surcharge, regardless of turnover.

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Income Tax Rate for Foreign Company

Foreign companies, i.e., those incorporated outside India but earning income from Indian sources, are taxed at a basic rate of 40% (plus applicable surcharge and cess). The surcharge is levied at 2% on income between ₹1 crore to ₹10 crores and 5% on income exceeding ₹10 crores.

It is important to note that foreign companies can avail beneficial provisions under the Double Taxation Avoidance Agreement (DTAA) between India and their country of residence to minimize their tax liability.

Minimum Alternate Tax for Company

The Minimum Alternate Tax (MAT) provisions apply to companies whose tax payable under the normal provisions of the Income Tax Act is less than 15% of their book profits. In such cases, MAT is levied at 15% (plus applicable surcharge and cess) of the book profits.

However, MAT is not applicable to companies opting for the concessional tax regimes under Section 115BAA and Section 115BAB. Further, the credit for MAT paid is allowed to be carried forward for 15 years to be set off against future tax liabilities.

H2 - How to Calculate Total Income for a Company?

To arrive at the taxable income for a private limited company, the following steps are involved:

The Corporate Income Tax Rate is then applied to this taxable income to determine the tax liability of the private limited company.

Returns Applicable for Domestic Company for AY 2022-23

Private limited companies are required to file their income tax returns annually. For the assessment year 2022-23, the following returns are applicable:

1. ITR-6: This return is applicable for companies other than those claiming exemption under Section 11 (income from property held for charitable or religious purposes).

2. ITR-7: This return is applicable for companies claiming exemption under Section 11.

The due date for filing the return is 31st October of the assessment year. However, for companies required to furnish a report in Form No. 3CEB under Section 92E (relating to international transactions), the due date is 30th November of the assessment year. Companies must also ensure timely compliance with advance tax payments, TDS/TCS obligations, and tax audit requirements (if applicable) to avoid penal consequences.

Domestic Company Tax Slab for AY 2024-25

For the Assessment Year (AY) 2024–25, the income tax rates for domestic companies depend on their turnover or gross receipts during the financial year (FY) 2020–21, as well as the tax provisions they choose to apply under specific sections of the Income Tax Act. The applicable rates are as follows:

• If the total turnover or gross receipts during FY 2020–21 do not exceed ₹400 crores:
  
  • Tax rate: 25%
• If the company opts for Section 115BA:
  
  • Tax rate: 25%
• If the company opts for Section 115BAA:
  
  • Tax rate: 22%
• If the company opts for Section 115BAB:
  
  • Tax rate: 15%
• For any other domestic company:
  
  • Tax rate: 30%

These rates are exclusive of surcharge and cess, which will be applied additionally based on the applicable income slabs.

Frequently Asked Questions