Introduction
Choosing the right name for a company is more than a branding exercise—it’s a legal obligation governed by the Securities and Exchange Commission of Pakistan (SECP). The SECP enforces specific rules regarding prohibited and restricted words in company names to prevent misleading the public, protect institutional credibility, and ensure public trust. This article explores the criteria, restrictions, and practical implications of SECP’s name regulations for aspiring business owners and legal advisors.
SECP Regulations on Prohibited Words in Company Names
Under Regulation 4(2) of the Companies (Incorporation) Regulations, 2017, the SECP has outlined a detailed framework for vetting company names. These restrictions are in place to:
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Prevent confusion with existing entities
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Avoid misrepresentation of legal status or public affiliation
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Ensure compliance with public interest, decency, and national integrity
The full regulation text and list of restricted words can be accessed at the official SECP website:
🔗 https://www.secp.gov.pk/laws/notifications/
Key Categories of Prohibited or Restricted Words
1. Misleading or Deceptive Words
Names that misrepresent the scale, scope, or nature of business are not permitted.
Examples:
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Using “National,” “International,” “Federal” without adequate justification
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Claiming scope beyond the company’s actual operations
2. Sensitive or Culturally Offensive Terms
Words that may offend religious, ethnic, or cultural sentiments or incite controversy are restricted.
Examples:
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Terms related to religion, sectarian ideologies, or political affiliations
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Vulgar or defamatory expressions
3. Legal or Institutional Authority References
Names that suggest regulatory powers or government affiliation are strictly controlled.
Examples:
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“Bank,” “Stock Exchange,” “University,” “Trust,” “Chamber,” “Council”
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These may only be used with approval from relevant authorities
4. Public Interest and National Image Concerns
SECP may reject names that could undermine public confidence, promote illicit activities, or conflict with national policies.
Examples:
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Names associated with gambling, smuggling, or money laundering
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Names that attempt to mimic government departments or defense agencies
Implications for Entrepreneurs and Businesses
1. Name Reservation Rejection
Failure to comply with naming regulations will result in rejection during the SECP name reservation phase. This delays the incorporation process and may lead to the loss of reservation fees.
2. Legal and Regulatory Repercussions
Using a misleading or unauthorized name—even after approval—can expose companies to:
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SECP fines and penalties
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Revocation of incorporation
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Legal action from affected parties or regulators
3. Loss of Credibility and Market Trust
An inappropriately chosen name may cause reputational damage, confuse customers, or raise doubts about the business’s legitimacy.
Best Practices for Name Selection
✅ Use SECP’s online name availability search tool
✅ Avoid terms that imply government affiliation or regulatory power
✅ Do not include references to regulated sectors (banking, education, healthcare) without required approvals
✅ Maintain clarity, distinctiveness, and professionalism
✅ When in doubt, consult a legal advisor or company registration expert
Navigating the SECP Name Reservation Process
Before finalizing your name:
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Reserve the proposed name through the SECP eServices portal
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Wait for name approval before preparing incorporation documents
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Submit justification or no objection certificates (NOCs) for restricted words if applicable
Conclusion
The SECP’s restrictions on company names are designed to safeguard legal transparency, prevent abuse, and build public trust in the corporate ecosystem. By understanding these guidelines and performing thorough due diligence, entrepreneurs can avoid delays, rejections, and legal complications during incorporation.
At Sterling Consultancy, we help businesses navigate the name approval process, ensuring full compliance with SECP’s regulations while preserving your brand identity.
