FLK1 · Multiple-choice practice

FLK1 Business Law — Question 1

Question

Hanna and Mohamed are in the process of forming a new business venture. They have decided to form a limited company and are deciding on the company’s name. Which of the following statements about the company’s name is true?

The company name can include a prohibited word such as “royal” or “bank” without obtaining the necessary consent.
The company name can be identical to an existing company’s name without obtaining the necessary consent.
The company name cannot include a sensitive word such as “international” or “group” without obtaining the necessary consent.
The company name must include the words “limited” or “ltd” at the end of the name.
The company name cannot include a geographic location such as “London” or “Wales” without obtaining the necessary consent.

Answer and explanation

Correct answer: C. The company name cannot include a sensitive word such as “international” or “group” without obtaining the necessary consent.

The company name cannot include a sensitive word such as “international” or “group” without obtaining the necessary consent. Under the Companies Act 2006, the use of certain sensitive words or expressions, including “international” or “group”, in a company name requires prior approval from the Secretary of State. This is to prevent misleading use of such words. Section 59 and Schedule 3 of the Companies Act 2006 provide the list of prohibited names and sensitive words.

Original newsletter explanation ↗

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