INCORPORATION OF LIMITED LIABILITY PARTNERSHIP- PART-III - (Name of LLP)

[Dr. Sanjiv Agarwal]

Section 15 of the LLP Act, 2008 seeks to provide an obligation on every LLP to suffix "limited liability partnership" or "LLP" with its name. The clause also seeks to provide that no LLP shall be registered with an undesirable name or a name which is identical or nearly resembles to that of any other partnership firm or an LLP or a body corporate or a registered trade mark or a trade mark the application of which is pending.

The name of a corporation is the symbol of its personal existence. An LLP name must be chosen with care and may not conflict with an existing name on the register. The Registrar may not register a name which is the same as an existing name on the index, or which is offensive or which would constitute an offence under the Emblems and Names (Prevention of improper use) Act, 1950. If the proposed name implies a connection with government or if the name contains a controlled word, it may only be registered with the approval of the Government.
It is never possible to say for certain that a name is completely safe at the time of applying for registration. Registration is complete when the certificate of incorporation is produced by the Registrar. The certificate of incorporation is the birth certificate of the LLP and shows the name of the LLP, the date of incorporation and the LLP registration number. Section 15 discusses about the appropriateness of the name for an LLP.

According to Section 15(1), every limited liability partnership is required to have either the words "limited liability partnership" or the acronym "LLP" as the last words of its name. This is to ensure that all persons dealing with the LLP should be clear that the partners of the LLP have limited liability. And for the same reason it is further required under Section 21 of the LLP Act that such name including the address of the registered office of LLP must be mentioned on its invoices, official correspondence and publication.

Section 15(2) provides that an LLP cannot be registered with - an undesirable name, or a name which is identical or too nearly resembles to that of any other partnership firm or limited liability partnership or body corporate, or 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,

LLP cannot be registered with an undesirable name.

Rules 18(1) and (2) of the LLP Rules provide that the following names would be considered as undesirable for the purposes of LLP - 

Theone prohibited under the Emblems and Names (Prevention of improper use) Act, 1950.

Section 2(c) of the above Act, provides that "Name" includes any abbreviation of a name. Section 3 thereof further provides that Notwithstanding anything contained in any law for the time being in force, no person shall, except in such cases and under such conditions as may be prescribed by the Central Government use, or continue to use, for the purpose of any trade, business, calling or profession, or in the title of any patent, or in any trade mark or design, any name or emblem specified in the Schedule or, any colourable imitation thereof without the previous permission of the Central Government or of such officer of Government as may be authorised in this behalf by the Central Government.

A name which falls within the categories mentioned below -

If it includes any word or words which are offensive to any section of the people.

If the proposed name is the exact Hindi translation of the name of an existing limited liability partnership in English or Hindi of an existing limited liability partnership.

If the proposed name has a close phonetic resemblance to the name of a LLP in existence, for example, J.K. LLP., Jay Kay LLP.

If it includes the word Co-operative, Sahakari or the equivalent of word 'co-operative' in the regional languages of the country.

If it connotes the participation or patronage of the Central or State Government, unless circumstances justify to, e.g., a name may be deemed undesirable in certain context if it includes any of the words such as National, Union, Central, Federal, Republic, President, Rashtrapati, etc.

If the proposed name contains the words 'British India'.

If the proposed name implies association or connection with any Embassy or Consulate or of a foreign government which suggests connection with local authorities such as Municipal, Panchayat, Zila Parishad or any other body connected with the Union or State Government.

If the proposed name is vague like D.I.M.O. Limited liability partnership or I.V.N.R. Limited liability partnership or S.S.R.P Limited liability partnership.

If it is different from the name/names of the existing limited liability partnership only to the extent of having the name of a place within brackets before the word 'limited liability partnership', for example, Indian Press (Delhi) limited liability partnership should not be allowed in view of the existence of the LLP named Indian Press Limited Liability Partnership.

If it includes name of registered Trade mark, unless the consent of the owner of the trade mark has been produced.

(xi) In case the proposed name is identical with or too nearly resembles the name of a firm or LLP incorporated outside India and reserved by such firm, LLP or company with the registrar in accordance with these rules.

If it is identical with or too nearly resembles the name of the limited liability partnership or a company in liquidation.

If it includes words like 'Bank', 'Insurance' and 'Banking', "company secretaries" without the approval of the regulatory authority

If it is intended or likely to produce a misleading impression regarding the scope or scale of its activities which would be beyond the resources at its disposal.

If the proposed name includes words like French, British, German etc., unless the partners satisfy that there is some form of collaboration and connection with the foreigners of that particular country or place, the name of which is incorporated in the name.

The words "Venture Capital/Venture Capital Fund/Venture Capital Finance" or such similar name, as part of the changed name of a limited liability partnership may be only allowed when the limited liability partnership have obtained approval from the Department of Economic Affairs or such authority as may be nominated by the Government, in this behalf.

LLP cannot be registered with a name which is identical or too nearly resembles to that of any other LLP, body corporate or partnership firm

An LLP cannot be registered by a name which in the opinion of the central government is undesirable. A name which I identical or too nearly resembles, the name by which a partnership firm, LLP or a company in existence has been previously registered may be deemed to be undesirable by the Central Government. This provision is similar to the one contained in Section 20 of the Companies Act, 1956. There have been many judicial percents under the corporate law on this account which may be relevant in case of LLPs also.

LLP cannot be registered with a name which is subject of an application for registration, of any other person under the Trade Marks Act, 1999. The prohibition for registration of an LLP's name in relation to an existing trade mark is limited to a trade mark registered or applied to be registered under the Trade Marks Act, 1999 of India.

It may be noted that the above provision is not restricting registration of a name identical with a trade mark registered outside India but not registered in India. It is relevant to note here that the definition of the expression 'trade mark' given under Section 2(zb) of the Trade Marks Act, 1999, includes those trademarks also which are not registered under this Act. The definition reads as under -

"Trade mark" means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and

(i) in relation to Chapter XII (other than section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and

(ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark."

As the LLP Act puts a restriction for LLP name in context of only such trademarks which are registered or so applied in India, there is a possibility for an LLP may get a name identical to a popular foreign trade mark which is not registered in India, though an Indian entity might be using such trade mark on its products.

In case an LLP gets registered with a name which is in contravention of the provisions of Section 15(2), by inadvertence or otherwise, the Central Government, under Section 17 of the Act, has power to direct such LLP to change its name within 3 months of its direction ( or such longer period as it may allow) and in contravention thereof, such LLP as well as its designated partners would be subject to penalty defined under Section 17(2) of the Act.

(To be continued)