Sourav, Soumyadip, Sucharita and Sohini are four directors of Supershine Detergents Ltd. They decided to convene a meeting on 20th February, 2025 to discuss, consider and solve some issues the company is facing in the co

CS Executive · Company Law and Practice · PYQS · June 2025
Sourav, Soumyadip, Sucharita and Sohini are four directors of Supershine Detergents Ltd. They decided to convene a meeting on 20th February, 2025 to discuss, consider and solve some issues the company is facing in the corporate secretarial compliances since few days. As there is no qualified Company Secretary at present in the company, they invited you, as a practising Company Secretary in the meeting, to take you valued views on the divergent issues and move forward accordingly. Sourav updated the board members that the promoters of the company want to incorporate a company in the name and style of Rimjhim Tourism Corporation Ltd. in a scenic hilly town in the state of Uttar Pradesh. The proposed new company would deal with a different line of business. The new company after some years would become a subsidiary of Supershine Detergents Ltd. This strategic decision will increase the brand value of the Group. Sourav invited comments from his co-directors and asked you to examine the matter. Based on the above facts and integrated case, referring to the provisions of Companies Act, 2013, answer the following: (b) Can a company be incorporated in the name and style of Rimjhim Tourism Corporation Ltd under the Companies Act, 2013? You being a practicing Company Secretary, examine.

Answer & Explanation:

According to section 4(2) of the Companies Act, 2013, the name stated in the memorandum shall not- a) be identical with or resemble too nearly to the name of an existing company registered under this Act or any previous company law; or b) be such that its use by the company - (i) will constitute an offence under any law for the time being in force; or (ii) is undesirable in the opinion of the Central Government. In terms of section 4(3)(b) of the Companies Act, 2013 read with Rule 8B of the Companies (Incorporation) Rules, 2014, a company shall not be registered with a name which contains- a) any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central Government or any State Government under any law for the time being in force; or b) such word or expression, as may be prescribed. The word "Tourism Corporation" used in the proposed name may be considered undesirable as the words can be used only with the approval of the Central Government. Hence, Rimjhim Tourism Corporation Ltd. cannot be formed without such previous approval of the Central Government for the use of any such word or expression. The promoters of the proposed company have to be guided accordingly by the Board of directors.

Topics: Incorporation of Company

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