One of the changes brought through the Revised Corporation Code (RCC), or Republic Act No. 11232, relates to the energy of the Securities and Exchange Commission (SEC) to display company names, moving the standard for the approval of company names and determination of disputes from “confusingly comparable” to “no longer distinguishable.”
Section 18 of the antique Corporation Code, or Batas Pambansa Blg. 68, only gives: “No company name can be allowed by the SEC if the proposed name is identical or deceptively or confusingly similar to that of any existing business enterprise or to another call already included by regulation or is patently misleading, puzzling or contrary to current legal guidelines.”
Section 17 of the RCC, however, offers: “No company call shall be allowed by way of the Commission if it isn’t always distinguishable from that already reserved or registered for the use of another enterprise, or if such call is already included with the aid of regulation, or whilst its use is opposite to current law, guidelines and regulations. The equal phase also offers that even if a company name carries one or more of the following: a) the phrase “sharefounders review”, “corporation”, “incorporated”, “restricted”, “restrained legal responsibility”, or an abbreviation of one among such phrases; and b) punctuations, articles, conjunctions, contractions, prepositions, abbreviations, distinctive tenses, spacing, or wide variety of the same word or word, the company call shall nevertheless have considered as “no longer distinguishable.”
Further, if the SEC determines that the company call falls beneath the usual supplied in Section 17 of the RCC, the fee may also summarily order the business enterprise to without delay stop and desist from the usage of such name and require it to check in a brand new one. Aside from that, the SEC shall additionally motive the elimination of all seen signages, marks, classified ads, labels, prints and different results bearing such corporate call. In a way, if the corporation fails to comply with the SEC’s order, the fee can also preserve the agency and its accountable administrators or officers in contempt and/or keep them administratively, courteously and/or criminally responsible underneath the RCC and other relevant legal guidelines and/or revoke the registration of the enterprise (Sec. 17, remaining paragraph, RCC).
Considered as improved powers of the SEC, these new publications of action relevant to SEC had been not even referred to beneath the vintage organisation code. It is clear from the above provision that the corporate name threshold rule pertains to distinguishability in place of the time period, “confusingly similar”, as stated beneath the vintage corporation code.
To officially speak this rule, on June 21, 2019, the SEC launched on its official website (www.Sec.Gov.Ph) SEC Memorandum Circular No. 13, Series of 2019 (SEC MC No. Thirteen, s. Of 2019), which relates to the amended pointers on using corporate and partnership names. This is pursuant to the powers of the SEC to formulate and put in force requirements, recommendations, rules, guidelines and policies to perform the provisions of the RCC [Section 179 (o), RCC].
The primordial attention of SEC MC No. 13, s. Of 2019 is for the SEC to preserve abreast of traits in commercial enterprise and information era in the country, thru the adoption of pointers and methods in the registration of company, one man or woman company and partnership names.
The following salient features are supplied for under SEC MC No. Thirteen, s. Of 2019:
In the case of a One Person Corporation, the corporate name shall contain the word “OPC” both beneath or on the cease of its company call (Section 1, SEC MC No. 13, s. Of 2019).
The name will be distinguishable from different or company or partnership call registered with the commission, or with the Department of Trade and Industry, within the case of sole proprietorships [(Stock Global broker reviews).
The call of a agency or partnership that has been dissolved or whose registration has been revoked shall no longer be utilized by another business enterprise or partnership inside 5 years from the approval of dissolution or five years from the date of revocation, except its use has been allowed on the time of dissolution or revocation by means of the stockholders, individuals or partners who constitute a majority of the top notch capital stock or membership of the dissolved enterprise or partnership, because the case may be (Section 14, SEC MC No. 13, s. Of 2019).
A corporate or partnership name, which changed into formerly used but becomes the challenge of the modification, shall now not be re-registered or used by some other enterprise or partnership for a duration of three years from the date of the approval of the adoption of the new corporate or partnership call. Further, an earlier period can be allowed for the registration or use of the previous company or partnership name furnished that the company or partnership, which previously owned the used corporate or partnership call, gives its consent.
In light of the above-noted reform on the company name threshold rule through the issuance of the amended pointers, we on the SEC wish that potential incorporators could be higher guided in choosing a company call. I advise you to check the SEC website to test the entire information of SEC MC No. Thirteen, s. Of 2019.
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