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ACCA Applied Skills · Corporate and Business Law (Global) · The formation and constitution of a company

Dara and Eli are incorporating a company. They propose to call it 'Northgate Holdings Limited', which is very similar to the name of an existing registered company, Northgate Holding Limited, operating in the same sector. What is the most likely legal position?

The registrar may refuse registration because the name is too like an existing registered name. Company name rules aim to prevent public confusion, so a trivial change such as adding an 's' does not make a name sufficiently distinct, and paying a fee does not change this.

  1. AThe name will be accepted because adding a letter makes it distinct
  2. BThe registrar may refuse registration, because a name too like an existing registered name is generally not permittedCorrect
  3. CThe name must be accepted because names are allocated on a first-applied basis only among public companies
  4. DThe name will be accepted if the founders pay an additional fee to the registrar

Explanation

Company name rules generally prohibit registering a name that is the same as, or too like, one already on the register, to avoid confusing the public. A trivial difference such as a plural does not make a name distinct. Paying a fee does not override the restriction.

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