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      Question

      Consider the following statements regarding the

      prohibition on the use of company name under Section 5 of the Companies Act, 2013: Statement 1: A company name identical to an existing company is absolutely prohibited. Statement 2: The Registrar has discretion to allow a similar name if the companies operate in different sectors. Statement 3: A company name cannot be registered if it suggests connection with Government without approval. Statement 4: A company can change its name if approved by majority shareholder vote at general meeting. Which statements are correct?
      A Statements 1 and 3 only Correct Answer Incorrect Answer
      B Statements 1, 3, and 4 only Correct Answer Incorrect Answer
      C Statements 2 and 4 only Correct Answer Incorrect Answer
      D Statements 3 and 4 only Correct Answer Incorrect Answer
      E Statements 1, 2, 3, and 4 only Correct Answer Incorrect Answer

      Solution

      Section 5 regulates company names. Statement 1 is correct—identical or deceptively similar names are prohibited. Statement 3 is correct—names suggesting Government connection require approval. Statement 4 is correct—name change requires special resolution. Statement 2 is incorrect because similarity is prohibited even if sectors are different; the test is not based on sector distinction but on the possibility of confusion. Statements 1, 3, and 4 are correct.

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