8 - Lecture Notes i

8/3/2019 8 - Lecture Notes i

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Name of Company

Lecture no 3rd

byAbdul Majid Khalil


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Summary provision Regarding

Name Ordinarily, a company is free to adopt any name

it likes but section 37 of the Companies

Ordinance lays down certain restrictions in thematter of selection of a name. It lays down that

no company can be registered by a name which

is identical with, or too closely resembles, the

name of an existing company which is alreadyregistered.


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Such a name is deemed to be undesirable. It isnot necessary that the word company should

form part of the name. The name of a companymay include personal names or it may be of animpersonal character.

If through inadvertence a company is registered

by a name which is similar to that of an existingcompany, it must be changed with the sanctionof registrar, section 39.


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In the case of a company limited by shares, thelast word of the name of the company must belimited, section 16,17 and 18 if a companymakes a contract without the use of the wordlimited the contract would be bindingpersonally upon those who purported to act onbehalf of the company.

When, however, a company is formed as alimited company for promoting commerce,art,science,religion,charity or any other useful


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purpose and intends to apply its profits nottowards the payment of any dividends it can be

registered without the word limited as part of itsname under licence from the Federalgovernment, section 42.

Under section 42, the federal government has

the power of revoking the licence, in which case,the word limited shall be again appended tothe name of the company.


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Section 143 requires that a limited companysname must (a) be painted or affixed, on the

outside of every office or place where ittransacts business, in English as well as in oneof the vernaculars used in that place; (b)engraved in English on its seal; and (c) bementioned in English in all notices,advertisements, and other official publications ofthe company and on all its business documents.


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Selection of name

The general rule is that a company may selectany name keeping in view the restrictionsimposed by section 37 on the selection ofcompanys name. It is advisable for thepromoters of a proposed company to choosethree to five alternate names and ascertain inwriting from the registrar whether all or any ofthe names chosen is available for registration,because if, the proposed name were notaccepted much trouble and unnecessaryexpense would be caused. Although the


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registrar will confirm the availability of a particularname after a preliminary inspection of the indexof names (or suggested changes) yet he is notprecluded, when the memorandum and articlesare submitted for registration, from exercising hisdiscretion under section 37 to refuse to accept aname for which provisional approval haspreviously been given.

there is no way in which a proposed name canbe reserved, while documents are being


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prepared, to prevent another company firstobtaining registration with the same, or a verysimilar name. Usually such a name is chosenthat gives some indication of the nature ofcompanys business. Remember, it is notessential that the word company should formpart of the name of the company. The name ofthe company may include personal names or itmay be of an impersonal character. A companyhaving a word in ordinary use as part of its namecannot prevent another company from using the


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the same word as part of its name. However, thefollowing principles, in the light of the decidedcases, may be laid down for general guidancewhile selecting a name for the proposedcompany.

1) A company must not use a name as will lead tothe belief that new company will carry on the

business of an existing company.2) The sound as well as spelling of the name must

be considered.

8 - Lecture Notes i

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