Batra Pvt. Ltd., the known group of promoters submitted anapplication to the registrar of companies for the approval of the namefor cosmetic manufacturing company. They selected “Avon Ltd.” as thename of the company so as to increase the sales of the newly openedcompany, as it will be benefited by the name of already existingcompany.(a) Which function of promoter is being referred here?(b) Who selects the name for the company?(c) Would the proposed name be accepted by the Registrar ofCompanies?
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Answer:
(a) Promoter- The promoters have to select a name for the company and submit an application to the registrar of companies of the state in which the registered office of the company is to be situated, for its approval. The proposed name may be approved if it is not considered undesirable.
(b) No, the selected name of the company is not accepted. Reason is name of the company should not be identical or similar or too close resembling the name of existing company. In this case name is too closely resembling the name of existing company Nike. According to the name clause the name of a company should not be identical or resembling the name of an existing company and should not violate the provisions of 'The Emblem and Names (Prevention of Improper Use) Act, 1950. Three names, In order of their priority are given in the application to the Registrar of Companies so that alternative name may be allotted in case the first preference does not fulfill the name clause.
Explanation:
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