Photo from Unsplash | Mana Akbarzadegan
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Two essential principles must guide entrepreneurs when choosing a business name: first, the name must not be identical or confusingly similar to an existing registered business name, corporate name, or trademark; and second, it must not violate any existing law, rule, or regulation.
Choosing a business name is one of the most important steps in starting a business. A business name becomes your brand. It serves as the identity of your business that the public will recognize and associate with your products or services. Because of this importance, there are several considerations in choosing your business name.
Under Section 17 of the Republic Act No. 11232, or the Revised Corporation Code of the Philippines, provides that no corporate name shall be allowed by the Securities and Exchange Commission (“Commission”) if it is not distinguishable from that already reserved or registered for the use if another corporation, or if such name is already protected by law, rules and regulations.
Furthermore, it is stated that a name is not distinguishable even if it contains one or more of the following:
- The word “corporation”, “company”, incorporated”, “limited”, “limited liability”, or an abbreviation of one if such words; and
- Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different tenses, spacing, or number of the same word or phrase. (Section 7, Republic Act No. 11232)
In case it is determined by the Commission that the corporate name is: (1) not distinguishable from a name already reserved or registered for the use of another corporation; (2) already protected by law; or (3) contrary to law, rules and regulations, may summarily order the corporation to immediately cease and desist from using such name and require the corporation to register a new one. The Commission shall also cause the removal of all visible signages, marks, advertisements, labels prints and other effects bearing such corporate name. Upon the approval of the new corporate name, the Commission shall issue a certificate of incorporation under the amended name. (Section 7, Republic Act No. 11232)
However, If the corporation fails to comply with the Commission’s order, the Commission may hold the corporation and its responsible directors or officers in contempt and/or hold them administratively, civilly and/or criminally liable under this Code and other applicable laws and/or revoke the registration of the corporation. (Section 7, Republic Act No. 11232)
For individuals or entities operating under a name other than their true name, compliance with the Business Name Law is also required. Section 1 of the Department Administrative Order No. 18-07, Series of 2018, states that Act No. 3883 states that no person shall use or sign, on any written or printed receipt, or on any written or printed contract not verified by a notary public, or on any written or printed evidence of any agreement or business transaction, any name other than his true name, without first registering such other name, in the Bureau of Commerce and Industry, together with his true name and that of any other person having a joint or common interest with him in such contract, agreement, or business transaction.
Business owners must also consider Intellectual Property Rights when selecting a name. Under Section 147.1 of Republic Act no. 8293, or the Intellectual Property Code of the Philippines, the owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.
In summary, two essential principles must guide entrepreneurs when choosing a business name: first, the name must not be identical or confusingly similar to an existing registered business name, corporate name, or trademark; and second, it must not violate any existing law, rule, or regulation.
Related Articles:
- Why Should You Register Your Business?
- Can the DTI cancel my Company’s Business Name?
- Business Name and Registration
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
All rights reserved.