Naming A Corporation

One of the most important steps in the creation of a corporation is to endow it with a particular name. This facet allows the juridical entity to be identified and referred to separately from others of the same nature. Legally, having a name allows a corporation to properly sue or to be sued. Naming a corporation is also one of the most important requirements before moving onto a Philippine company registration. In fact, an application for incorporation may be denied outright if the name chosen by the incorporators is already taken or is one that violates the rules for the approval of a corporate name. Naming a corporation is not as easy as it seems. Notice should be taken that due to the increasing number of corporations being incorporated each year, an exhaustive search is made to determine if a proposed name is available. Couple this with the fact that some individuals have made a business out of reserving potential names and having the same for sale and it is clear that reserving a corporate name requires more than a thought.

To regulate the choice of corporate and partnership names, the Securities and Exchange Commission has previously issued a memorandum circular governing the approval of such names. According to SEC memorandum circular no.14 series of 2000, the following guidelines must be observed before a corporate name may be approved and adopted:

1. The corporation name shall contain the word “Corporation” or its abbreviation “Corp.” or “Incorporated”, or “Inc.”.
2. Terms descriptive of a business in the name shall be indicative of the primary purpose. If there are two (2) descriptive terms, the first shall refer to the primary purpose and the second shall refer to one of the secondary purposes.
3. The name shall not be identical, misleading or confusingly similar to one already registered by another corporation or partnership with the Commission or a sole proprietorship registered with the Department of Trade and Industry. If the proposed name is similar to the name of a registered firm, the proposed name must contain at least one distinctive word different from the name of the company already registered.
4. Business or trade name of any firm which is different from its corporate or partnership name shall be indicated in the articles of incorporation or partnership of said firm.
5. Trade name or trademark duly registered with the Intellectual Property Office cannot be used as part of a corporate or partnership name without the consent of the owner of such trade name or trademark.
6. If the name or surname of a person is used as part of a corporate or partnership name, the consent of said person or his heirs must be submitted except if that person is a stockholder, member, partner of a declared national hero. If such person cannot be identified or non-existent, an explanation for the use of such name shall be required.
7. The meaning of initials in the name shall be disclosed in writing by the registrant.
8. Name containing a term descriptive of a business different from the business of a registered company whose name also bears similar term(s) used by the former may be allowed.
9. The name should not be patently deceptive, confusing or contrary to existing laws.
10. The name which contains a word identical to a word in a registered name shall not be allowed if such word is coined or already appropriated by a registered firm, regardless of the number of the different words in the proposed name, unless there is consent from the registered firm of which this firm is one of the stockholders or partners of the entity to be registered.
11. The name of an internationally known foreign corporation or one similar to it may not be used by a domestic corporation without the consent of the former.
12. The term “Philippines” when used as part of the name of a subsidiary corporation of a foreign corporation shall be in parenthesis: i.e. “(Philippines)” or “(Phil.)”.
13. The following words shall not be used as part of a corporate or partnership names:




A. As provided by special laws:

1. “Finance”, “Financing” or “Finance and Investment” by corporations or partnerships not engaged in the financing business (R.A. 5980, as amended)
2. “Engineer”, “Engineering” or “Architects” as part of the corporate name (R. A. 546 and R.A. 1582)
3. “Bank”, “Banking”, “Banker”, Building and Loan Association”, Trust Corporation”, “Trust Company” or words of similar import by corporations or associations not engaged in banking business. (R.A. 337, as amended)
4. “United Nations” in full or abbreviated form cannot be part of a corporate or partnership name (R.A. 226)
5. “Bonded” for corporations or partnerships with unlicensed warehouse (R.A. 245) “Investment(s)” by corporations or partnership not organized as investment house company or holding company.
6. “National” by all stock corporations and partnership.
7. “Asean”, “Calabarzon” and “Philippines 2000″.




B. As a matter of policy:

14. The name of a dissolved firm shall not be allowed to be used by other firms within three (3) years after the approval of the dissolution of the corporation by the Commission, unless allowed by the last stockholders representing at least majority of the outstanding capital stock of the dissolved firm.
15. Corporations or partnership, before engaging in Philippine company registration, shall submit a letter undertaking to change their corporate or partnership name in case another person or firm has acquired a prior right to the use of the said firm name or the same is deceptively or confusingly similar to one already registered unless this undertaking is already included as one of the provisions of the articles of incorporation or partnership of the registrant.

Note should be made that a corporate name is different from a trade name. A corporate name is the name designated to a corporation while a trade name is the name or designation identifying or distinguishing an enterprise. In registering a trade name, one should refer to the Department of Trade and Industry rather than the Securities and Exchange Commission.