What is in a name?
Things to consider when selecting your company name...
In today’s competitive environment the selection of a company name is one of the initial decisions that you will be making. Various service providers on the internet advertise assistance in choosing the “perfect” name for your company which will grab the attention of the consumers. However when choosing the correct name for your organisation it is vital to consider the laws governing business names within South Africa. The laws that regulate business names are the Companies Act 71 of 2008 and the Consumer Protection Act 68 of 2008. Let’s look at the Companies Act. Section 11 and 12 of the Companies Act regulates the do’s and don’ts when it comes to company names: DO’s DON'TS A Company name may: comprise of one or more words in any language irrespective of whether the words are commonly used; The words may be used in conjunctions with any letters numbers or punctuation marks The following symbols may be used +, &, #, @, %, =; or Round brackets used in pairs to isolate a part of the name. A company name should end with one of the following expressions or its abbreviation: For a personal liability company the abbreviation or expression “Inc” or “ Incorporated; For a private company the abbreviation or expression “(Pty) Ltd” or “Proprietary Limited” For a public company the abbreviation or expression “Ltd” or “ Limited” For state-owned company the expression “SOC Ltd” For non-profit company “NPC” If the companies MOI restrict or prohibits the amendment of provisions of the MOI the expression “(RF): A name may not be the same name or confusingly similar to : The name of another company, domesticated company, registered external company, close corporation or co-operative; A registered trademark; A mark, word or expression to use of which is restricted or protected in terms of the Merchandise Act; A registered defensive name of business name name act. A name may not falsely imply /suggest or mislead a person to believe that the company: Is part of or associated with any other person or entity; An organ of state or a court; Is owned or managed or conducted by a person having particular educational designation; Is associated with a foreign state, head of state of governments or International organisation An name may not include any word, expression or symbol that may constitute: Propaganda for war; Incitement of imminent violence; Advocacy of hatred based on race, ethnicity gender or religion or incitement to cause harm Some other information with regards to Company names: The act contains certain exceptions with regards to the above for instance, if a name is similar to a name or trademark, word or expression same will be allowed if it can be shown that the company falls within a group of companies or permission is given to use the trademark. The Companies act further allows for the registration of a name as a defensive name for a period of two years subject thereto that the applicant can furnish proof that the applicant has a direct and material interest in the name. Now, what about the Consumer Protection Act? Section 79, 80 and 81 of the Consumer Protection Act regulates business names and states as follows: Section 79(1) “ A person must not carry on business, advertise, promote, offer to supply or supply any goods or services or enter into a transaction or agreement with a consumer under any name except: The person’s full name ( as per the ID) in case of an individual or; Registration name as in the case of juristic person ( such as a company or close corporation); or A Business name registered for use of that person It is clear from this section that the Consumer Protection Act prohibits the use of trade names. Section 80 provides for the registration of a business name whilst Section 81 sets out the criteria for a business name and this corresponds nicely with the Companies Act. The act no doubt has the intention to ensure that consumers are at all times able to identify the supplier of the products and services and avoid the instances in which a supplier may hide its registration name by using a trade name. The aforementioned section is not currently in effect and we are waiting on the Minister to publish a date on which these will become effective. It is however advisable for any organisation to reconsider the use of a trading name thereby ensuring that once the sections of the Consumer Protection Act comes into operation your business is not required to change the name in which it trades or be affected by the use of an unregistered name which in the future may lead to penalties. More regulation in terms of FAIS... Despite the general regulation of business names, as indicated above, it is important to consider any further requirements within your specific sector regarding your business name. For instance, in terms of licensing conditions of a Financial Service Provider the FSCA requires a Financial Service Provider to report a change in the Financial Service Provider’s name to the FSCA within 15 days from doing so. The general condition with regards to name changes of an FSP reads as follows: “The financial services provider must not in any must not in any manner change the name of manner change the name of the financial services business as reflected on the licence concerned, or carry on any financial services business under such a changed name, unless- (a) the provider has fully complied with the provisions of any other law than the Act which regulates such change of business name if any); b) the provider has fully disclosed to the Registrar the details of such compliance with such other law; (c) the Registrar is satisfied that such change of name is otherwise lawful and has approved such change of name; and ; (d) the Registrar has issued to the provider an appropriately amended licence under the provisions of Section 8(5)(b)Q) of the Act. The aforementioned condition thus has the effect that although a FSP name has been changed with the CIPC the FSP must wait until an amended licence has been issued by the FSCA before rebranding and changing the name on all communications ect. How can we help you? Etude can assist in a wide variety of services which includes the following: Any and all CIPC applications, amendments and returns, including to but not limited to the following: Variation of business name; Name reservation; Annual returns Any and all FSCA applications, profile changes and statutory returns, including but not limited to: New FAIS Cat1, Cat2, Cat2A and Cat 3 license applications Appointment of an external compliance officer Submission of annual and bi-annual compliance reports