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Artificial intelligence system likely to ease name registration process for companies

The aim is to reduce the level of discretion in deciding on the names that can be accepted.

, ET Bureau|
May 18, 2019, 08.17 AM IST
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The AI system will be akin to entering a name in a search engine to check if it is available.
NEW DELHI: The Ministry of Corporate Affairs (MCA) is working on an artificial intelligence-based mechanism to ease the process for companies seeking to register their names, an official said.

The government recently liberalised norms for registration, allowing entities to choose names that may form part of an existing trademark as long as the businesses operate in different sectors. The new rules were notified in the gazette on May 11.

“Earlier, if the name was a part of a trademark, it could be stopped,” said the official. “We have made it clear that (this applies) only if the name includes a trademark registered in the same class of goods.”

The aim is to reduce the level of discretion in deciding on the names that can be accepted, he said. To make the registration process easier, the government has provided examples — “Ultra Solutions Ltd. is same as Ltd.” and therefore won’t be accepted. “The rules with regard to nomenclature relative to ‘too general’, ‘too similar’ and trademark related (restrictions) have been simplified with both negative and affirmative illustrations,” said another official.

The AI system will be akin to entering a name in a search engine to check if it is available, the second official said. “We are studying how we will define ‘too close’ (to an existing name), so we are looking at phonetic letters and other things,” the official added. The simplification of rules was a key demand of industry, particularly startups.

“The illustrations provided in the notification should act as a good guide in the name selection process and the pitfalls to avoid,” said Vikas Vasal, national leader at Grant Thornton. The changes should help address some of industry’s concerns and provide more flexibility during name registration. Some experts said the changes don’t go far enough.

“The recent amendments in name reservation rule brings much required clarity but it fails to bring any major change,” said Ankit Singhi, partner, Corporate Professionals. Given that startups often have unconventional names, they might find it difficult to meet requirements, he said. “MCA also needs to ensure strict enforcement of these rules by the approving authorities.”

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