Company name: concept, exclusive right, registration and use
The opening of any organization is certainly accompanied by the choice of the name for the new enterprise. A company name is the most important means of individualization of a company, its main attribute, which subsequently will not only appear in business papers, but will also become associated by the company with services rendered by the organization or goods sold. On some points related to the registration and use of the brand name, we will discuss below.
The concept of brand name
Well-known specialist in the field of industrial property G. Bodenhausen gives this concept the most general definition. In his opinion, the company name of the enterprise is the name or designation that allows you to identify an organization belonging to any natural or legal person. In other words, this name is intended to personify a certain legal entity.
Civil legislation obliges each newly formed organization when submitting documents for state registration to indicate its company name — the name that will be used in conducting future commercial or other activities, conducting credit and financial operations, exercising their rights, and performing duties, in particular, speaking in court.
What is the naming convention?
According to the Civil Code of the Russian Federation, unambiguous subjects of the right to a company name are legal entities that are engaged in commercial activities. They not only have the right to state registration and assign a name to themselves, but are also obliged to carry out this operation. By the way, we note that the purpose of commercial activity is to make a profit, which distinguishes it from non-commercial.
To make yourself recognizable to consumers, the legislator grants the right to a company name and non-profit enterprises.
As for the citizens registered as individual entrepreneurs engaged in commercial activities, it is also their responsibility to the state to assign a company name to themselves.In addition to legitimizing their position in the market, thus individuals have the opportunity to individualize their business, to attract the attention of buyers and customers.
Brand Name Functions
As already mentioned, the corporate name of the legal entity serves to recognize the organization and its goods and services by consumers in the market. This is the most important function of the brand name, revealing it as a powerful advertising tool that affects the perception of customers and partners of the entire activity of the company.
The name of the enterprise also has the function of informing participants in market relations about the status of the organization, its field of activity and origin.
In addition, it is used in the design of all documents, as well as to create a unique print for each organization.
And, finally, the official assignment to the enterprise of its own brand name is an important public instrument for regulating market relations.
Brand Name Structure
Article 1473 of the Civil Code of the Russian Federation states that the corporate name of a legal entity includes the following components:
- legal form (for example, CJSC, OJSC, LLC, etc.);
- the very name of the natural or legal person, invented by the founder;
- an indication of the type of activity of the enterprise being opened (for example, a trading house, a processing enterprise, a construction company, etc.).
The least variable part of the name of the company - the legal form. The list of possible options for this component is limited by the All-Russian Classifier and Resolution of Gosstandart of Russia No. 97 of 03/30/1999.
The most variable part is the name of the company itself, invented by the owners. It is assigned the main individualizing function.
The first two components in the name of the company must be present necessarily. As for the part in which the nature of the company’s activities is indicated, both its presence and the absence in the company name are allowed.
Company name requirements
The legislation defines the list of requirements when choosing the name of the enterprise.
First of all, it is necessary that the name of the company be unique: it is prohibited to choose a name that already belongs to any organization and is entered into the Unified State Register of Legal Entities.
In addition, the company name must comply with the structure, that is, contain the name of the organization itself and an indication of its legal form.
It is prohibited to use to create a company name:
- proper names not belonging to the founders;
- official names of public associations;
- official names of intergovernmental and international organizations;
- designations that are pereotvy principles of morality and humanity, the public interest.
Use in the title of the subject of the Russian Federation
In the fourth part of the Civil Code of the Russian Federation it is indicated that it is prohibited to enter into the company names of legal entities:
- official full or abbreviated naming of the Russian Federation, other states and terms that are derived from these naming conventions;
- official full or abbreviated names of state authorities of the subjects of the Russian Federation or local governments, as well as Russian authorities.
The only exceptions to this rule are state unitary organizations: their company names may indicate that they belong to the subject of the Russian Federation or directly to the Russian Federation.
The official name "Russian Federation" and words derived from it are allowed to be included in the names of joint-stock companies only by decision of the Government of the Russian Federation, in the case when more than 75% of the shares of this company are the property of the Russian Federation.
How to register a company name?
The procedure by which a company name is registered is regulated by the Federal Law “On State Registration of Legal Entities and Individual Entrepreneurs” No. 129-ФЗ dated August 8, 2001, Article 51 of the Civil Code, and the Law on Joint-Stock Companies.
In accordance with the 76th head of the Civil Code of the Russian Federation, a company name is prescribed in the Charter of the organization, which is the main constituent document. At the same time, the company is included in the Unified State Register, thereby passing through the procedure for registering a company name.
If the owner of the enterprise voluntarily decided to change its name, then this procedure is also accompanied by a change in the Charter and the submission of an established list of documents to the tax service, which makes the appropriate amendments to the registers of individuals or legal entities.
Entering a legal entity or an entrepreneur into the Unified State Register is accompanied by the payment of a one-time state duty. Further use of the company name and legal protection is carried out without making additional funds in the state treasury.
A separate fee for registration is subject to names containing words derived from the word "Russia" (for example, Rossiysky Kredit Bank). The only exceptions are federal government bodies. In the subjects of the Russian Federation there are the same rules when using the names of the subjects in the name of the company. For example, in Moscow, names containing words derived from the name of a city are subject to a fee.
Trade names are the intellectual property of their respective owners. Each organization acquires the exclusive right to a company name entered in the state register. This possibility arises from the moment of registration of a legal or natural person and is valid until the moment of completion of its activities. The law prohibits the alienation or transfer for temporary use of this right.
The right to a company name is transferred only with the organization of the right holder. At the same time, it can be separately assessed and sold to another owner with the company without reservation or with the proviso that it will cease to operate after a certain time.
Responsibility for using someone else's company name
The legislation strictly prohibits the use by one enterprise of a company name of a different or similar naming (to a degree of confusion), if this similarity is capable of misleading consumers. This condition applies to organizations that are located within the same territorial zone and are engaged in similar activities.
Illegal use of a business name entails both administrative and criminal liability. The maximum degree of responsibility is associated with situations where the company name was used to extract profits, thereby causing significant damage to the holder of this name.
Brand Name and Trademark
It is necessary to distinguish the name of the organization from the trademark.Both of these concepts serve as means of individualization of the enterprise, but have different functional purpose and legal characteristics.
- First, the trademark is not obligatory for the organization and is not subject to mandatory registration.
- Secondly, the brand name, unlike a trademark, is not allowed to use until its registration.
- Third, in order to register a trademark, an enterprise must already be located in the Unified State Register of legal entities or entrepreneurs.
- And, finally, a trademark, as a brand designation, differs from a company name by features of legal protection. The trademark title certificate is a certificate of state registration, which has a validity period only for 10 years, after which it must be renewed.
Thus, the process of choosing and registering a company name for an enterprise has many nuances that owners should pay close attention to in order to successfully carry out their future commercial or non-commercial activity.