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20
Jan
17
Change in Name of a Private Limited Company

A private limited company or famously known as LTD is a privately held company. This implies that the business limits owner liability to its shares and from trading its shares publicly. In addition, the shareholders are limited to 50. Private limited companies are also incorporated; hence it continues to exist even if the owner dies.

The name of the Company is one the most important and foremost steps taken before incorporating a Company. Although, after the Company is incorporated, the name of the Company may need change due to various reasons such as change in management, change in the business objective, change in the brand of the Company, etc.

The change in the name of the Company does not affect the legal details of the Company or the rights and duties of shareholders. In case of change in the name of the Company, a step-by-step procedure is to be followed.

Procedure to change the name of the Company

  • A board meeting is held, after providing seven days of notice, to approve the agenda and suggest new names for the Company
  • An extraordinary general meeting is then held to get the approval of the shareholders for the proposed names
  • Application for the name availability is sent to the Registrar of Companies in form INC-1
  • In case of the availability of the proposed name, a certificate is issued to the Company
  • An extraordinary general meeting is held to pass the Special Resolution of changing the Company name
  • The special resolution passed at the extraordinary general meeting must be filed with form MGT-14 at the Registrar within 30 days of passing the resolution. The form must include the necessary documents:
    • Copy of the resolution
    • Notice of the extraordinary general meeting
    • Statement of the notice
    • Memorandum and Articles of Association
  • An application form INC-24 must then be filed for the change in the Company name along with the required fees
  • After scrutiny and validation of the forms and documents, the Registrar will issue a certificate of incorporation

The next necessary and important step is to change the Company name in the Memorandum and Articles of Association.

20
Jan
17
What is One Person Company in India?

A business entity run by a sole owner with the benefit of limited liability, offering protection to its shareholders is a One Person Company. Only one Director is required to form a One Person Company.

With supporting documents such as DIN, DSC, etc., an OPC can be registered within two weeks.

Features of One Person Company

  • Director

As the name suggests, a minimum of one Director and one member is required to form a One Person Company. Hence, the sole shareholder can be the Director itself. A maximum number of 15 Directors are possible for a One Person Company.

  • One Shareholder

A person of Indian origin and an Indian citizen can form a One Person Company.

  • Nominee for the Shareholder

A shareholder may appoint another person as a shareholder in case of death or incapacity of the original shareholder. The nominee shall give its consent to be appointed as the sole shareholder.

  • Taxation

As the government has not strictly specified, the tax rates for any Private Limited Company are applicable to a One Person Company.

  • Compliance

One Person Company has the leverage of not complying with many requirements that are applicable to a Private Limited Company.

Terms and Restrictions of One Person Company

  • A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
  • Only a person who is not a minor is eligible to be a nominee of the One Person Company
  • One Person Company cannot be incorporated or converted into a limited company
  • A One Person Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
  • Such a company cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, unless the capital is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores

Advantages of One Person Company

  • One Person is a separate legal entity from its members
  • Liability of member is limited
  • One Person Company being a Private Limited Company is best suited for new entrepreneurs
  • As in the case of any other Company, mandatory requirement of an auditor is not applicable
  • The necessity to hold a number of Board Meetings and General Meetings does not apply to One Person Company

Process to Incorporate One Person Company

  • Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed Director(s) in case it is not already available
  • Check for Company name availability by filing form INC-1
  • Obtain consent of nominee for the sole shareholder
  • Draft Memorandum of Association and Articles of Association
  • Once the name of the Company is approved, sign and file various documents electronically including MOA and AOA along with form INC-2, which is required for the incorporation of the Company, with the Registrar of Companies
    • Form INC-2 must be filed within 60 days of filing form INC-1
  • Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty
  • The Registrar of Companies scrutinizes and validates the documents
  • Receipt of Certificate of Registration/Incorporation from the Registrar
19
Jan
17
Checklist of the Documents required for the Firm Registration

Firm registration in India is a step-by-step process and every step in this process requires different documents to be submitted.

A standard procedure includes four major steps:

  1. Application for Director Identification Number (DIN) or Designated Partner Identification Number (DPIN)
  2. Register Digital Signature Certificate (DSC)
  3. Account in Ministry of Corporate Affairs (MCA) Portal
  4. Incorporate a LLP

The documents required for the registration of a firm in India include all of the following.

  • While filing for Director Identification Number (DIN) or Designated Partner Identification Number (DPIN) along with form DIR-3, the following documents must be scanned
    • High-resolution photograph
    • PAN card copy
    • Passport copy as an identity proof
    • Proof of father’s name
    • Verification form DIR-4
  • While incorporating a Company name the following documents are to be submitted
    • Form 1 – This application is filled for declaration for incorporation of a company
    • Form 1A – It is the application form to be filled for availability or change of a company name with the ROC. Once you apply for new company name, MCA will suggest four forms of company name as available to be registered; out of which you will have to choose one.
    • Form 18 – This form is filled for the notice of situation of a new company office Form 32 – This form must be filled for notice for appointment of new Directors, Managers and Secretary
  • Other documents that must be scanned and submitted
    • Letter of consent from the Directors of the company
    • Signed and stamped copies of Memorandum of Association (MOA)
    • Signed and stamped copies of Articles of Association (AOA)
    • Power of Attorney

Once the above documents are submitted, the documents are validated for authenticity and the registration process of a firm begins.

16
Jan
17
What is Nidhi Company?

Nidhi companies are the limited companies registered under Companies Act, 2013.. The word “Nidhi” in Nidhi Company comes from a word which means “treasure”. It has been incorporated with the aim of- utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. and compliance with the rules as prescribed by Central Government. Nidhi company is similar to NBFC.
They are known as mutual benefit societies because their dealings are restricted only to the members

Benefits of Nidhi Company

  1. It give loans to and accept deposits only from its members. 
  2. These companies does not require to conduct any activities related with chit funds, leasing, hire purchase
  3. It does not require any external involvement or accept deposits or give loans to any other person other than its members.

Why do people register with Nidhi Company?

It is the cheapest and easiest form of NBFC and can be easily formed. It requires minimum seven members including subscribers to incorporate a Nidhi Company. It shall have the word Nidhi Limited as a part of its name. Like for example XYZ Nidhi Limited.

Conditions need to be satisfied for registration of Nidhi Company

  • It should have a minimum net owned funds of Rs 10 lakhs or more.
  1. It should have at least 200 members or shareholders within a period of one year from its commencement.
  2. Deposits should not exceed 20 times from its net owned funds

Documents required

  1. DIN & DSC of Directors.
  2. Proof of registered office address (Electricity Bill or Rent Agreement with rent receipt).

Beware of these points before making a nidhi company-

  1. Do not open any current account with its members
  2. Do not accept deposits from any person other than its members.
14
Jan
17
The only article you need to read about Annual Compliance Filing

As we all know there are certain mandatory compliances which a private limited company needs to abide by in order to function smoothly. This write up seeks to answer all the queries which you might have with regard to annual compliance filing for a private limited company.

Ever since the companies act, 2013 came into being, there have been some changes in the guidelines for the private limited companies but majority of the compliances continue to be what they were under the previous law – companies act, 1956.

Companies still need to file:-

  1. Notice of the AGM
  2. Director’s report
  3. Auditor’s report
  4. Balance Sheet

For starters Annual compliances, broadly, is a two time process. When the process commences, there are certain steps to be followed like the appointment of the auditor, preparation of share certificates, preparing statutory certificates. Tap these steps and a company is good to initiate the process. However, it is the second phase of the annual filing that is a bit tricky and requires a certain degree of effort.

Before we move on, it is imperative to note that there are certain compliances that are quarterly in nature and must not be confused with annual compliances. These must be completed after every 90 days to avoid any hiccups.

  • Conducting the board meeting
  • Notifying regarding the board meeting
  • Preparation of the attendance of the board meeting
  • Also updating the statutory register if need be

These are some of the compliances that are quarterly. Now let’s switch to annual compliance that must be duly completed once a year.

 

Filing director’s disclosure in other interests

As envisaged by the section 184 of the companies act, 2013, a director is required to make a disclosure regarding his interests beyond the company he is chairing. This interest of his must be revealed in the first meeting of the board where he is participating as the director. If there are any changes in his nature of interest, he must inform the board about the same as and when the next meeting is conducted. It is one of the first annual compliances to prepare for filing of any such disclosure by the director.

Filing for the declaration made by the directors

While the previous compliance deals with the subject of a director revealing his interests beyond the company, this talks about his role and interest in the company. The companies act, 2013 clearly states that the director must reveal his interest to the company. Sub clause 1 and 2 of section 184 deal with the subject. Even this declaration is needed to be made available to everyone in the first board meeting.

Preparation of Board’s report

After every annual board meeting, a report is prepared with deals with the subject of day to day dealings on the company. It is one of the annual compliances to prepare for filing of that report which is churned after the board meeting. Section 134 Companies Act, 2013 deals with this very subject of drafting the board’s report. The report basically contains information like Details of Deposits received and the loans made and the guarantees provided, contracts entered with related parties have to be furnished, et cetera.

Filing the annual return

It goes without saying the drafting a perfect annual return is the most important aspect of annual compliance filing. An annual return consists of following pointers

  • Details regarding companies registered offices, principal business, subsidiary and associates.
  • Shares, debentures and different shareholding patters of the company.
  • Loans on the company
  • The members and debenture holders along with the changes that have happened since the last financial year.
  • The promoters, directors, key managers and the changes that have occurred since the last financial year.
  • Remuneration of important dignitaries
  • Penalty or punishment (if any) imposed on the company or its directors or key managers

Obtaining the financial audits

Once the final audit is prepared by the auditor, which is an independent process, it has to be obtained for the purpose of filing the annual return. It’s an honest assessment done by someone who does not belong to the company, so keeping a close watch becomes imperative.

Preparation of the details of the board meeting

Before the annual meeting is conducted, it is compulsory to have a board meeting and thus becomes imperative to have all the details of the board meeting in place as the company heads to the annual meeting

Drafting the report of the director

Directors prepare a report after the meeting that deals with all the subjects and minute details regarding the day to day functioning of the company. It is thus a compliance to draft the report filed by the directors of the company.

Preparing the papers for the re-appointment of the auditor

An auditor is the permanent posting in a company. He is an independent functionary, who job is to provide honest and fair assessment of the financial details of the company. And hence he works under certain tenure. As and when that tenure expires, to get his re-appointment papers ready falls under the category of annual compliance.

Preparation for Annual General Meeting

Just like the board meeting, it is one of the annual compliances to get all the details and specifications ready for the annual general meeting. It is in this meeting the agenda, goal and other niceties of the companies are discussed.

Filing of the balance sheet

Another compliance that requires extreme care. It is mandatory to file the details of the balance sheet before the due date.

Filling of AOC 4 (Balance Sheet and Profit & Loss Account), ADT 1 (Appointment of Auditors), MGT 7 (Annual Return)

All these must be filed with their respective documents.

There are the mandatory annual compliances. A company that follows them duly is expected to have their business-running smooth simple.

09
Jan
17
Five Compliance Requirements that are a Must for Every Private Limited Company

For any new business entity to run its operations smoothly and effectively, compliance measures become a mandatory step to follow. Before we move forward with further discussion, it is important to understand what the true meaning of compliance is and why is it important for any private limited firm to follow it diligently? We call a private limited company compliant when it runs its operations and routine tasks based on certain regulations or guidelines set by the authorized dignitaries. In other words, compliance is anything that assures that a company is functioning in its operations and tasks on the basis of approved and appropriate measures essential for its long-term survival.

Board Meetings, Annual General Meeting (AGM), Appointment of Statutory Auditors, Annual Filing of Forms by the Directors and Maintenance of Statutory Register are some of the mandatory compliance requirements with the provisions of Companies Act, 2013 for a private limited company to function steadily.

Let us discuss each of the points mentioned above in detail for a clear vision.

Board Meetings are a Must

At least two board meetings in one financial year are required to be conducted in the presence of two or 1/3 of the total number of board of directors from the time of a company’s inception. Why? Here is your answer.

Conducting board meetings at the prescribed intervals is mandatory for small business entities because they act as an essential part of the compliance structure that incorporates a methodological approach concerning the yearly work flow of a business entity smoothly. Thus, if you are a startup company, conducting a board meeting within 30 days from the date of its commencement should be a regime to be pursued diligently.

Annual General Meeting (AGM) – An Essential Part of the Compliance Structure

Annual General Meetings are conducted in the presence of the company’s shareholders once a year. The agenda behind holding such meetings is to decide upon new strategies within budgets. These include approval of financial statements, declaration of dividends, appointment or re-appointment of auditors; appointment and remuneration of directors etc.

Appoint a Statutory Auditor for Clean Account Records

Audit plays an important part in the compliance structure for a private business entity. Audits ensure whether companies’ accounts are managed as per the approved compliance measures and that there are no fraud cases. Thus, companies appoint statutory auditors to get their account records audited at timely intervals. These auditors are appointed by the Board of Directors within 30 days from the company’s incorporation. They are also sometimes re-appointed if required at the consequent Annual General Meeting.

Annual Filing of Forms

There are certain requirements that should be fulfilled in this category also. Like for example, it is necessary for every private limited company to file its Financial Statements within 30 days of its Annual General Meeting (AGM) with The (ROC) Registrar of Company in E-FORM AOC-4. Before its submission to the ROC, at least one of the Board of Directors should sign the form digitally. All such forms are certified by a Company Secretary or Chartered Accountant in practice.

Maintenance of Statutory Register

Maintenance of Statutory register is yet another mandatory compliance requirement to be fulfilled by all the companies. Statutory registers are books that hold the names of all the members of the company, debenture holders, and foreign members or security beneficiaries or holders. Each one of the categories is listed in registers as MGT 1, MGT 2 and MGT 3. However, all the shares, stocks, and charges related information is registered in FORM SH-2, FORM SH-3, FORM SH-6, FORM SH- 10 and FORM SH-7.

02
Jan
17
Demat Shares Private Limited Company

When the shareholder of a company gets physical share certificates converted into electronic balances, the process is termed as demat or in simpler terms dematerialisation. Often it has been noted the investors encourage the share-holder to get the physical certificates converted into demat shares. In some cases it is mandatory as well for companies seeking to raise equity funds. So how does the entire process work… Read on

What are the benefits of Demat shares-:

  • It is the safest way to hold shares of any company. As one cannot mutilate or steal them.
  • The process is so convenient that one can easily change the physical entity of the shares, electronically
  • The transfer of shares happen almost instantly, if there is authorization
  • One of the most important features is that there is no stamp duty when you transfer shares
  • There is definitely no fear of bad delivery of shares, fake share certificates, delays and even missed certificates
  • Absolutely no paper work, needed in some cases but even that is minimal
  • Reduced transaction and legal cost
  • It is so feasible that a shareholder has the liberty to transfer even one share
  • Ownership information, change of address and other paraphernalia can easily be maintained
  • In case of stock split of bonus, the amount automatically gets credited into the account of the shareholder
  • Even one single demat account of one investor can hold two or more securities

How to convert into demat shares

Depository is an organization which maintains the security of investors in electronic form. All this is done at the request of the investors. Currently in India, there are two registered depositories which come under the SEBI. These are (a. National Securities Depository Limited (NSDL) and (b. Central Depository Services (India) Limited (CSDL). It must be noted here that the investors do not have the liberty of directly trading through these depositories and must involve depository participant through whom it works with the investors and provides depository services. Many public financial institutions, commercial banks, stock-brokers, clearing corporations and NBFCs are registered as Depository Participants. The only requirement is that all these institutes must comply with the requirements of SEBI. Both NSDL and SDSL have got so many depositories which help the investors to deal. When it comes to converting the shares of a private limited company into demat form, the company and the investors enter and agreement with depository participants.

When A Private Limited Company Becomes an Issuer

A private limited company can only offer demat facility to its shareholders if it has submitted the securities to the NSDL. This involves the company getting into a contract with an existing Registrar and Transfer Agent who communicates with the NSDL for shares, credit and transfers.

Documents needed:-

  • Letter of intent/Master Creating Form (MCF)
  • Audited Balance Sheet of the last two years that have been certified
  • True copy of Memorandum of Association and Articles Association
  • Confirmation letter assigned by R&T agent
  • New worth certificate true copy issued by a Chartered Accountant
  • Undertaking from the company
  • List of authorized signatory with Board Resolution with specimen signature
  • In cases where the company is admitted in CDSL, the ISIN activation letter from CDSL to be submitted

Fee structure

The joining fees those companies which are unlisted us Rs 30,000 excluding service tax. There is also an annual fee for issuer of listed securities. It accounts to Rs 8 per folio (ISIN position) in NSDL. There are certain minimum amounts, written below.

Rs 6,000 for an amount upto 5 crore

Rs 15,000 for an amount above 5 crore and upto 10 crore

Rs 30,000 for an amount above 10 crore and upto 20 crore

Rs 50,000 for an amount above 20 crore

Investor Account of Shareholders

Apart from company becoming an issue, the shareholders of the company are required to become an investor under a depository participant to keep their shares of the company in electronic shares. Shareholders are also required to open a Beneficial Owner (BO) account with any depository participant of a depository.

Procedure needed to open a shareholder demat account

The first step for opening a demat account is that the shareholder must complete a benefical owner application form to the depository participant along with copies of all the proofs. Now even PAN card is mandatory if you wish to open a beneficial owner account for all investors. Upon approval of the application, the investor is required to sign an agreement with depository participant giving details and rights and duties of investor and depository participant. Once the account is open, the depository participant will provide the investor with further details like charges, account details, and a unique account number, also known as BO ID (Beneficial Owner Identification Number). It must be noted that it is this number which is to be quoted for all future transactions.

These are the various charges paid by the investor for getting his shares converted into demat

  • First time charge when you enrol for it
  • Annual account maintenance charges
  • Transaction fees whenever a transaction is done
17
Dec
16
Procedure for change in object clause of the company

The following write-up is aimed at explaining the procedure required for change in Object Clause of a particular company under the Companies Act, 2013. Besides explaining the procedure, it will also provide an in-depth analysis on the documents needed to make the entire process a smooth one.

One of the first steps to change object clause of the company requires a change in the Memorandum of Association of the company, often called Memorandum in common usage.

Before moving on further, let’s discuss a bit about of Memorandum of the company. It will help us as we start talking about the process in detail. Section 4(6) of the Companies Act, 2013 the Memorandum of the company shall be in forms specified in tables A, B, C, D and E in schedule I as may be applicable to such company. Whereas according to section 4(1) Memorandum has following important clauses:

  1. Name Clause which tells about the name of the Company, 2. Registered Office Clause which tells about the state of the country where the company is registered.
  2. Objects clause of the Company and other pertinent matters.
  3. Liability Clause which describes the liability of members of the company.
  4. Share Capital clause meaning the authorized way of sharing the capital of the company.

Alteration of Memorandum of Association may be of different kinds.

Altering the name clause mentioned in sections 13 (2) and (3). Altering the Registered Office Clause mentioned in section 13 (4) (5) and (7). Altering the object clause mentioned in section 13 (8) and (9). Altering the Capital clause mentioned in section 61 read with section 64.

 Alteration of Memorandum of Association due to change in Object Clause has following provisions.

Major provisions pertaining to alteration of Memorandum are provided in Section 13 of the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014. Regulation of the process of amendment of memorandum depends on the application of section 13.

It must be noted here that all the clauses of the Memorandum can be altered by using the provisions of section 13. However, the capital clause cannot be altered using the clauses of section 13. And any alteration in the memorandum will require the consent of the members which is achieved via Special Resolution. However, in case of alteration of capital clause, consent of members is required and it is done through Ordinary Resolution mentioned in 61. It can be altered by following those provisions which are mentioned in section 61 read with section 64 of Companies Act, 2013. Now we will discuss the procedure required for change in object.

Board meeting:

A notice needs to be issued in accordance with the provisions of section 173(3) of the Companies Act, 2013, for having a meeting of the Board of Directors. The primary agenda for this meeting is to get in-principal approval of board of directors for change in object clause of Memorandum. This meeting also seeks to fix date, time and place for convening extra-ordinary general meeting (EGM) to get the nod of shareholders, through Special Resolution, for amending the object clause of Memorandum. This amendment must accord with the requirement of section 13 of the Companies Act, 2013 – to approve notice of EGM along with Agenda and Explanatory Statement to be appropriated to the notice of General Meeting as per section 102(1) of the Companies Act, 2013.

To authorise the director or CS to issue notice of this meeting which was approved by the board under clause 1(c) as mentioned already.

Issuance of notice of the extra-ordinary general meeting to all members, directors and the auditors of the company in accordance with the provisions of Section 101 of the Companies Act, 2013.

Conducting the meeting.

Conducting the general meeting.

Conducting the extra-ordinary general meeting (EGM) on scheduled date and pass the required special resolution under section 13(1) of the Companies Act, 2013.

 

ROC Form filing:Section 13(6) says that a company will be needed to file special resolution passed by shareholders for altering the special resolution with the particular registrar of companies along with the fees and some more formalities, which are mentioned below.

Notice of EGM

A certified copy of special resolution of Memorandum from the registrar of companies.

Altered Memorandum of Association

A certified copy of resolution adopted by the board can be provided as an additional option.

Apart from all these procedures, there is a small restriction vis a vis change in object clause of memorandum.

As per Section 13 (8) and Rule 32 a company which has

14
Dec
16
Advisory to company secretaries regarding LLP

The CS is an imperative wheel for a smooth movement of the company. However, not many companies adhere to certain guidelines when it comes to having a position for CS. Keeping this in mind, ICSI (The Institute of Company Secretaries of India), the national body overseeing the training and other paraphernalia related to a CS, has come up with an advisory for all the companies. The advisory is binding on LLPs as well. Here is what the advisory suggests.

The ICSI clearly mandates that if any company is using the designation of a CS, it is required to have a prior NOC (No Objection Certificate) from the ICSI.

The ICSI was stern when it observed that the many companies directly approach the ROCs (Registrar of Companies) and get the names of their LLPs approved, without the knowledge of the ICSI. However, the standard procedure requires them to get an NOC from the ICSI. The reason stated by the companies for ignoring the ICSI from the entire process is that the names of the LLPs do not contain the word Company Secretary hence it does not really need to approach the chartered accountant body. However, the ICSI has now made it clear that even in such cases where a newly-floated LLP is planning on providing secretarial or attestation services, the first step is to get NOC from the ICSI and then approach the ROC for the name registration.

Also the ICSI made it clear that all the LLPs which are covered under the new advisory will need to update information like name of the company, registration date, contact details etc,. It also stated that the LLPs will need to provide the details of the partners with membership no, LLP incorporation certificate which is provided by the ROC. Besides all these, they are also required to file a copy of form 2 which was submitted to the ROC, combined with a copy of LLP deed and form 25 presented at the ROC.

Moving on further, the LLPs now are mandated to inform the ICSI within 30 days, in case there is a change in the partnership patter of the company. But even after all these strict guidelines in place, if a company secretary decides to form a LLP for non-secretarial purposes, he/she is exempted from obtaining NOC from the ICSI.

03
Dec
16
Trademark of Domain names

When internet was in its nascent stage, the domain names were just used for being a representation of a particular website. However, with the growth of information technology and expansion of global through internet, these domains not just serve the purpose of being just a representation of the company, they also are used to promote the business and help the masses identify the brand through them. The commerce on the internet is an ever-expanding entity; hence the domain names are used in publicity of the business. Roughly speaking domain names are these days equivalent to trademark or service mark. You can always register your domain names as trademark and make sure they help your business grow.

When it comes to domain name, it is the easiest form of IP (Internet Protocol) address. The technical IP address is mostly not known to a general user. Well of course, that can be found out by anyone but under normal circumstances a common user does not fret over knowing the technical IP address.

DNS (Domain Name System) is used to assign and manage the address of the internet servers.  The first part of a domain name is called Second level and is usually the prerogative of the applicant of the domain name. While the second part of the domain name is called 'Top level Domain' (TLD). The TLD is further divided into two sub parts – Generic Top-Level Domains (gLTDs) and Country Code Top-Level domains (ccTLD). Org, Gov, Nic, Com are some of the popular Top-Level domains

 In layman terms domain names do online what trademarks do offline, which is to represent the company to its user, or consumer, base.  Trademark is a graphic representation that draws people towards a particular business. On the other hand, domain name drives traffic towards your online business or venture. It is also a virtual presence of your business... Properly registered trademarks and domain names can have major benefits...

A trademark ensures that a particular brand is promoted and protected, while a domain name makes sure that the business or the venture is protected from any authorized use of the services provided under that domain name. Trademark enhances the face value of the product. On the other hand, a domain name makes sure that your business or profession can be easily traced by consumers, even from a remote location. The reach of the trademark is limited and can cater to the audience of a locality. While domain name has a wider reach and can make your product go worldwide. Hence it is evident that a duly registered domain name goes a long way in taking the business global without costing big on the pocket of the owner. One thing to be noted while we are at this is that domain names can be protected as trademarks at both national and international levels. However, it is compulsory that it fulfils all criteria that is needed for it to be registered as trademark. A unique internet domain that is able to act as a source identifier for the service and product it trying to sell can be registered as a trademark. It is also noteworthy that the domain name should not be misleading in nature and must refrain from deceiving the consumer.

Before moving on further, here is what the Supreme Court of India observed in Satyam Infoway Ltd. Vs Sifynet Solutions Pvt. Ltd case. The issue was brought to court’s notice to determine whether or not a domain name can be recognized as Intellectual Properties such as Trademarks:

02
Dec
16
Most common reasons for Trademark Objection

When you file an application for a trademark, a Trademark Officer looks into your application and is in the capacity to "object" your application for many numbers of reasons.

You can check the status on your applied trademark on the Indian Trade Mark Registry website. If the status shows as "objected", then it is to be concluded that you need to take action because the officer has raised concerns about your application under Sections 9 and 11 of the Trademarks Act.

There are many reasons why your application may be objected. Here, in this article, we have look at the most common ones.

You have not used the correct Trademark form

Filing trademark can be quite a hassle, despite the government making sure that such is not the case. In case you happen to not have used the correct Trademark form, your application stands to be objected by the Trademark Examiner.

The objection that will be raised is: "The application is made on form TM-1, for certification mark in respect of goods or services falling in a class, the form of the application should be corrected as TM-4 by filing a request on form TM-16."

The means to tend to this objection is by filing in a request to correct the trademark application by filing in a request using form TM-16.

You have used not used the correct Trademark Applicant Name

The trademark applicant name needs to be mentioned correctly. In case you have not done so, the trademark officer is entitled to object to your application.

The objection that will be raised will be: "The application appears to have been filed in the name of a partnership firm, names of all Partners of the firm should be brought on record by filing a request form TM-16"

The applicant whose trademark application has been objected due to incorrect trademark applicant name can tend to the objection by filing in a request to correct the trademark application through form TM-16.

The Trademark Form TM-48 has not been filed by your agent

The basic thumb rule is that whenever a trademark application has been filed by a trademark attorney or a trademark agent on behalf of you, the applicant here, trademark form TM-48 has to be duly filled and attached.

In case you have forgotten to fill and attack form TM-48 or have incorrectly executed the form, the objection that will be raised by the trademark officer is: “The application has been submitted by a person other than the applicant, a duly stamped Power of Attorney in favour of a particular agent should be filed.”

As an applicant whose application has been objected, you can overcome it by filing in a request to correct your application form through form TM-16.

You have mentioned incorrect address on the trademark application

You need to be very careful in filling the trademark application form. One slight mistake in the address and the trademark can raise an objection to it.

You have to mention the principal place of business. Even if your address for the services in India is not mentioned, the application can be duly objected to.

The objection raised will be: “The Principal Place of business of the applicant should be brought on record by filing a request on form TM-16” or “The applicant’s address for service in India should be brought on record by filing a request on form TM-16, since the applicant has no principal place of business in India.”

Like before, to make amends and to correct the application form after it has been objected, you need to do it through form TM-16.

You have vaguely specified goods and services

When you fill in the form, you have to be specific. If you casually specify the goods and services, or you specify something that covers a large variety of goods and services, then an objection can be raised by the trademark examiner.

Here is the objection that you will come across: “The specification of goods/services mentioned in respect of class xx, is very vague and wide. You should provide exact items in respect of which the trademark is sought to be registered, by filing a request on form TM-16.”

You need to take the corrective actions through filing in a form TM-16 and requesting for change in your original form.

If the same trademark or a similar trademark already exists

In case the trademark examiner finds same or eerily similar trademarks already in his records for the same product or products similar to the goods and services you want to trademark, your application will be objected duly.

“The trademark applied for registration is not registrable under Section 11(1) of the Trade Marks Act 1999 since identical or similar marks in respect of identical or similar description of goods or services are there on records and because of such identity or similarity of marks and goods or services there exists a likelihood of confusion on the part of the public.”

For example, if you file for a trademark "Amazone", it will be rejected because it is too similar to a trademark that exists. Such trademark applications only make things easier for the trademarks office, because they tend to mimic the famous trademarks.

In such a case, you have to frame a reply to the trademark examination report and explain how the trademarks, that have been same or similar to yours, are in effect different to the one you have applied for. And just arguments will not do. You have to submit enough evidence for the trademark officer to overturn his decision.

Your trademark lacks an exclusive character

The basic purpose of trademark is to help your goods and services stand out of the traffic in the marketplace. If your trademark name - the one you applied for - does not do justice to that, and does  not help you distinguish from the clutter, it will be rejected under absolute grounds for refusal of trademarks.

For example, trademark "Shiny Hair" will be rejected as a trademark for a shampoo because all it does is define how your hair will be. It lacks the unique character that is needed to differentiate it from the rest out there.

To refute that, you will have to submit a response, with proof, how your product is unique and has a distinct character that will serve to keep trademark's USP in place.

Your trademark is deceiving

The trademark office will not let anyone fox the buying public. If your trademark has connotations of deception, where the mark itself, or the quality or nature or geographical origin of the goods or services, can be used to delude the public, the trademark application will be strictly objected.

You may use TM-16 to file for a revision but you will need strong grounds to get your application through, unless of course you have reworked the trademark you will be filing for.

There are many other reasons why your trademark application can be stalled with an objection, but the ones listed above are the most common ones.

But before we close this article, here is a little briefing about how to go about it once your application has been objected to:

  • Once your application is rejected, you have to take an action within one month from the date on which you have received the Examination Report.
  • The Trademark Registry mostly does well to upload these online on their website but you may not get a formal intimation. So, you need to be alert and have regular visits to the website.
  • Once the trademark has been objected to, it is imperative that you put forward a solid response composed of reasonable argument to get the process started again.
  • Once you have done so, the trademark officer/registrar/examiner can either accept the trademark or make arrangements for a hearing so that the person can out forward his arguments in person.
25
Nov
16
Why trademarks are important for businesses to be successful

Trademark may by definition be an illustrative symbol - maybe a word or label or numerals or whatever - that a business uses to distinguish itself from the other competitors in the market domain, but on a deeper level, it is much more that just that. Over the years, trademarks have become an important survival and sustenance tool and have proved to be very important in the larger scheme of things. It would not be an understatement to say that the success of a business is largely dependent on how successful the trademark registered for that business is.

Once trademark have a hold in the market, they serve to easily influence the buying decisions among a plethora of consumers. So, as a businessman or a businesswoman, it is important to have a solid knowledge of the importance of trademarks and how it serves to benefit your business.

Here are a few reasons as to why trademarks are an entity so important to your budding business:

  1. Customers find it easy to locate you through means of trademarks

To be honest, it is a crowded marketplace out there and you need to have a trademark that really makes your product stick its neck out and be appealing to the customers. And trademarks do not pay dividends immediately. Trademarks can take decades to actually become a word of mouth, even more than that to win the trust, but once it happens to do so, there is no going back. You have found a place in people's array of choices and they will always look for you, and will do that at the cost of your competition.

A lot of consumership is driven by loyalty - as suggested by so many "loyalty programs" existing nowadays - and trademarks play to that very concept, winning long term customers on basis on the brand name alone.

Trademarks do well to "cut through the clutter" in the market and help your product stand out, thus making the choice easy for the consumers.

  1. Trademark serve to prevent confusion in the marketplace

Trademarks are largely convenient to the customers. They not only kill the confusion but they help build the trust and also help companies in sustaining it. Trademarks serve to be the information for the source of a product. So, let us say, a product turns out to be defective. The customers then have an accurate information about the source of that product and the knowledge about which manufacturer or supplier to approach for a refund, say. Trademarks, seen in that light, give the consumers a protection because they know what they are dealing with.

 

Not only in case of a defunct product, but in general, they motivate the companies to maintain a level of consistency and quality. They allow the customers in turn to decide whether to purchase a desirable product or to avoid the undesirable one.

  1. Trademarks serve as a communication tool which is relatively light on your pocket

Since trademarks help in building trust and create a pool of loyal consumers over a period of time, the costs involved in decision making by a customer is highly reduced. You do not have to try out different brands and see which is the best, because over the time, one of them has been, and you can close your eyes and buy it.

Trademark encapsulates the intellectual and emotional attributes of a product into one single entity. It has in it the company's name, its reputation and the nature of product and service that the company offers.

Trademarks also help communicate across borders, cultures and even languages for that sake. Famous trademarks can be recognized even by a population that speaks an entirely different language. Example: the McDonalds "arches" logo, the NIKE "swoosh" logo et al do not need language to be recognized. McDonalds is as much McDonalds in Asia as much it is in Europe.

  1. Trademarks tend to become enduring assets

Trademarks is not only an identity, but it is also a long term asset. They provide a company with a long term advantage over its competitors and unless there is a mega goof up along the way, this asset, unlike say a car, only appreciates over a course of time.

Apart from being an asset, they also provide you a scope to expand. Thus, Kellogs expanded from ready to eat cereals to snack bars and breakfast bars now. Armani was once into runway apparel but now manufactures perfumes and eyewear. Take the example of Virgin Airlines, which has now ventured into entertainment and carbonated drinks as well.

Apart from this, trademarks can often be treated as property. As discussed earlier, they not only appreciate in value over time, but can also be "bought and sold", or pledged as security or mortgage, or licensed, or they can be involved in the acquisition of a business.

  1. Trademarks support stronger sales volume, stronger margins, and can provide price maintenance legally

With so many brands placed so close to each other in quality, and all of them competing for consumer's attention, your brand can make a big difference and can be a critical factor in driving the purchasing decision of the consumer.

With a good brand name that has sustained over the years, you can also take advantage of price variance. Your product may be significantly higher priced than its competitors but your brand value can help sway the consumers to your hold, thus maximizing your profit like nothing else.

  1. Trademarks have low maintenance costs

Once you have filed for a trademark and have it approved, it has an infinite life span. In the United States of America, you have to just file for a renewal every 10 years.  They effectively never expire.

Some of the famous brand names have been there for so many years. Mercedes came into being in 1900  while Pepsi and Cola were trademarked as back as in 1896.

It has to be noted that one must do a thorough research when filing for a trademark. That in turn will save you time and money later, when a dispute or litigation might be as costly as it will be cumbersome. Choose a name and logo that distinctly identifies your business but also stands out from its competition.

  1. Trademarks allow the businesses to effectively utilize the internet

Your brand name is the first thing that a consumer searches for on the internet - be it Facebook or Twitter or Instagram. Trademarks can help drive internet traffic and hence inadvertently market for your product as well. A catchy name will have people searching for it on the internet. They tend to be such that they are "top of the mind" stuff when you are thinking about a particular product.

Thus, it is crucial that a company obtains desirable domain names, because a higher traffic on the website results in a higher ranking on search engine results, and hence result in higher digital visibility.

  1. Trademarks protect against unfair competition

Every country has means to prohibit deceptive and misleading advertising. In turn, it helps your competition to be genuine and fair.

  1. Trademarks make hiring easy

Since your trademarks help build a legacy, it is bound to evoke fandom. When a certain candidate is convinced about your company, hiring him and assuring yourself of loyalty and commitment from him is not such a difficult task.

Also, employee retention is much higher when the employees have a positive feeling about the organization.

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