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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
A corporation’s right to use its corporate and trade name is a property right, a right in rem, which it may assert and protect against the whole world in the same manner as it may protect its tangible property against trespass or conversion. (Philips Export B.V. v. Court of Appeals, G.R. No. 96161, February 21, 1992)
The following are the statutory limitations on use of corporate names:
- Make the proposed name distinguishable from that already reserved ort registered for the use of another corporation.
The law says:
Section 17. Corporation Name. – No corporate name shall be allowed by the 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.
A name is not distinguishable even if it contains one or more of the following:
(a) The word “corporation”, “company”, incorporated”, “limited”, “limited liability”, or an abbreviation ofone if such words; and
(b) Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different tenses, spacing, or number of the same word or phrase.
The Commission upon determination 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.
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 17, Revised Corporation Code.)
- Put either the word “Incorporated” or “Inc.” or “Corporation” or “Corp.” after the name of your corporation.
The law says:
The corporate name shall contain the word “Corporation” or “Incorporated,” or the abbreviations “Corp.” or “Inc.” respectively; (Section 1, par. (a), SEC Memorandum Circular No. 13 Series of 2019 or the Amended Guidelines and Procedure on the Use of Corporate and Partnership Names)
- If you are a One Person Corporation, have the word “OPC” appear below or at the end of your corporate name.
The law says:
Section 120. Display of Corporate Name. – A One Person Corporation shall indicate the letters “OPC” either below or at the end of its corporate name. (Section 120, RCCP)
- If you are a foundation, the word “Foundation” must appear in your corporate name.
The law says:
The corporate name of a foundation shall use the word “Foundation” (Section 1, par. (d), SEC Memorandum Circular No. 13 Series of 2019 or the Amended Guidelines and Procedure on the Use of Corporate and Partnership Names)
- If you are a non-stock, non-profit corporations engaged in microfinance activities, include the word “Microfinance” or “Microfinancing” in your corporate name.
The law says:
“The corporate name of all non-stock, non-profit corporations, including non-governmental organizations and foundations, engaging in microfinance activities shall use the word “Microfinance” or “Microfinancing”; provided that said corporations shall state in the purpose clause of their Articles of Incorporation that they shall conduct microfinance operations pursuant to Republic Act No. 8425 or the Social Reform and Poverty Alleviation Act.” (Section 1, par. (e) SEC Memorandum Circular No. 13 Series of 2019 or the Amended Guidelines and Procedure on the Use of Corporate and Partnership Names)
- If the name you have applied for is similar to that of a registered corporation or partnership, add one or more distinctive words to your proposed corporate name.
The law says:
(a) The name shall be distinguishable from other corporate or partnership name registered with the Commission, or with the Department of Trade and Industry, in the case of sole proprietorships;
(b) If the name applied for is similar to that of a registered corporation or partnership, the applicant shall add one or more distinctive words to the proposed name to remove the similarity or differentiate it from the registered name;
However, the addition of one or more distinctive words shall not be allowed if the registered name is coined or unique unless the board of directors or majority of the partners of the subject corporation or partnership gives its consent to the applied name. (Section 3, par. (a) and (b), SEC Memorandum Circular No. 13 Series of 2019 or the Amended Guidelines and Procedure on the Use of Corporate and Partnership Names)
- Do not put punctuation marks, spaces, signs, symbols, and other similar characters.
The law says:
“Punctuation marks spaces, signs, symbols, and other similar characters, regardless of their form and arrangement, shall not be acceptable as distinguishing words for purposes of differentiating a proposed name from a registered name.” (Sec. 3 par. (c), SEC Memorandum Circular No. 13 Series of 2019 or the Amended Guidelines and Procedure on the Use of Corporate and Partnership Names)
- Do not make your corporate name that consists solely of special symbols, punctuation marks or specialty designed characters.
The law says:
“A name that consists solely of special symbols, punctuation marks or specially designed characters shall not be registered.” (Section 3, par. (d), SEC Memorandum Circular No. 13 Series of 2019 or the Amended Guidelines and Procedure on the Use of Corporate and Partnership Names)
Does a corporation have the right to exclusive use of a corporate name?
Jurisprudence says “Yes.”
“A corporation’s right to use its corporate and trade name is a property right, a right in rem, which it may assert and protect against the whole world in the same manner as it may protect its tangible property against trespass or conversion. (Philips Export B.V. v. Court of Appeals, G.R. No. 96161, February 21, 1992)
“The right to the exclusive use of a corporate name with freedom from infringement from similarity is determined by the priority of adoption, in which two requisites must be proven, to wit:
- That the complainant corporation acquired a right over the use of such corporate name; and
- That the proposed name is either:
- Identical; or
- Deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law; or
- Patently deceptive, confusing or contrary to existing law.” (Industrial Refractories Corporation of the Philippines v. Court of Appeals, G.R. No. 122174, October 03, 2002)
What is the Priority of Adoption Rule?
Jurisprudence says:
Under the Priority of Adoption Rule, the corporation that first adopts a corporation name has the right thereto and a subsequent corporation cannot use the same name. (De La Salle Montessori International of Malolos, Inc. v. De La Salle Brothers, Inc., G.R. No. 205548, February 07, 2018)
What is the Doctrine of Secondary Meaning as applied to corporate names?
Jurisprudence says:
The Doctrine of Secondary meaning provides that a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product. (Lyceum of the Philippines, Inc. v. Court of Appeals, G.R. No. 101897, March 05, 1993)
Related article: When is an intended corporate name registrable?
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