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[av_heading heading=’ABOVE THE LAW ‘ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” admin_preview_bg=”]
BY AYIN DREAM D. APLASCA
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A LOT OF US enjoyed the “long weekend” because of the local holiday. I bet some of you did a lot of things outside your capacity as an employee or whatever you usually do in a week.
Same is true with me. I did arrange and piled us some of my things last weekend. To my surprise, I saw some of my things when I was in law school. The first thing I opened was one of my answer sheets above the orderly heap white notes. It was for Corporation Law examination.
As I went over my answers, I remember the questions being asked during that time. One of these was about how a corporation creates its corporate name.
The Corporation Code provides that prior to the incorporation of a corporation the incorporators need to choose the corporate name. They generally choose and use any name they see fit. However, there are limitations.
The corporation should not choose a corporate name that is identical or deceptively or confusingly similar to that of any existing corporation, partnership, or registered sole proprietorship, or to any other name already protected by law, or one that is patently deceptive, confusing or contrary to existing laws.
The name of a corporation must end with the word “Inc.” or “Incorporated” or “Corp.” or “Corporation”. This means that the entity should put words that will identity it as a corporation. Also, it should not use the tradename or trademark registered under the Intellectual Property Office as well as the name of an internationally known corporation. In both cases, consent is required to use such names.
Additionally, it should not use the name of a deceased person unless consent is given by his or her estate. The full name or surname of a stockholder may be used in the corporate name, but the SEC may require the registrant to explain the reason for the use of the person’s name.
There are also other names that should and should not be used as corporate name. It is best to seek legal advice from an attorney to make sure that your corporate name is within the meaning and purpose of the law.
The rationale of this provision is for any corporation to avoid adopting another entity’s name that would cause confusion and fraudulent competition and open the door to fraud to the public and evade legal obligations and responsibilities. This will also result in difficulties in the administration and management of corporations.
A corporation aggrieved by the subsequent use of its name by another corporation may pursue a claim with the SEC for the exclusive use of its name, considering that it acquired prior right over its use and the use of such name by another company will possibly cause confusion to the public.
Just like any other important and valuable right, the corporate name is a property right which cannot be compromised if another corporation will appropriate the same. It is the nature of a right in rem which can be asserted against the world.
Therefore, a corporate name must be carefully created to set the corporation apart from other entities.
***
(Atty. Ayin Dream D. Aplasca practices her profession in Iloilo City. She may be reached thru ayindream.aplasca@gmail.com/PN)
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