A company name is a fundamental part of any company’s identity. It appears on all marketing material as well as on various platforms and on all your products and services. In addition to the obvious importance of the business and marketing considerations attaching to a company’s name, it is also important to remember that there are various compliance considerations to be taken into account when choosing an appropriate name for a company.
Criteria for company names in South Africa
The Companies Act 71 of 2008 (“Companies Act”), has set out the specific criteria in respect of a company name. Section 11(1)(a) of the Companies Act, states that a company name “may comprise one or more words in any language, irrespective of whether the word or words are commonly used or contrived for the purpose”, together with other letters, numbers, punctuation marks or symbols as specified in the Companies Act and as permitted by the Companies and Intellectual Property Commission (“CIPC”).
The Companies Act further sets out in Section 11(2), that a company name must not be the same as, or confusingly similar to, the name of any other registered company, unless permitted in exceptional circumstances, for example companies within the same group of companies.
Changing the name of a company with the CIPC
In order to change an existing company name, or to add a name to a company that is trading with its registration number only, a name must first be reserved by the company with CIPC. Once a name reservation has been approved by CIPC, a company may change its registered name by passing a special resolution of the shareholders and lodging the name change with the CIPC. In terms of section 16(9)(a) of the Companies Act, the new company name only takes effect on the date as set out in the amended registration certificate (COR14.3), issued by the CIPC.
Companies need to keep in mind that this Section of the Companies Act suggests that the new company name is not effective when the shareholders or directors agree to change the name of the company, but rather when the CIPC officially issues a COR14.3, Amended Registration Certificate, reflecting the new name of the company.
The use of multiple business names
In terms of the Consumer Protection Act 68 of 2008 (“CPA”), section 80(1)(a), a person may register any number of business names being used, or to be used, by that person in carrying on the person’s business. This implies that one company can have multiple names, however Schedule 2, provision 5, of the CPA, states that the registration of multiple names does not take effect until a date determined by the Minister by way of a notice in the Government Gazette.
Companies trading under multiple names, may therefore be in contravention of the CPA, and risk having other companies reserve one of the multiple names being used by a company, with the CIPC, for their own company use.
Corporate Statutory Department