The right to company name under new Company Law

A company’s name reflects its image, reputation and value. Through the name of the company, people can infer the quality of the company’s products and management level. But the current Company Law has no explicit provisions on the company’s right to name. Article 6 of the new Company Law (revised in 2023) changes this situation and clearly states: “A company shall have its own name conforming to relevant state regulations. The law protects a company’s right to name.”

The amendment is an extension of articles 58, 1013 and 1014 of the Civil Code on protecting a legal person’s right to name, which helps improve the system of incorporation and registration of companies. Considering the importance of the right to name, this article focuses on the type of right and related controversies.

Type of right

Right to decide a name. A company has the right to decide its name using various combinations of Chinese characters under the law. According to article 6 of the Administrative Provisions on the Registration of Business Name (revision 2020), a company name consists of the name of an administrative division, the trade name, the characteristics of the industry or business, and the form of organisation.

Right to use the name. A company has the right to use its name exclusively to the extent permitted by law. According to article 17 of the provisions, within the registration area of a company, others cannot use the same name or trade.

Right to change the name. A company has the right to change its name and choose a new name pursuant to the law. According to article 1016 of the Civil Code, if a company wishes to change its name, it must follow the relevant procedures for registration with the authorities. Civil legal acts performed before the change remain legally binding.

Right to transfer the name. A company has the right to transfer its name to a transferee, making the transferee the subject of that naming right. Article 19 of the provisions stipulates that the transfer of a company’s name shall be disclosed publicly through the National Enterprise Credit Information Publicity System, which implies that the right to name is a property and can be transferred.

Right to license the name. A company has the right to conclude a licence agreement and allow others to use its name. Article 19 of the provisions stipulates that a company has the right to authorise others to use its name, and this authorisation must be publicly disclosed through the National Enterprise Credit Information Publicity System.

Dispute resolution on company names

First to accept principle. When two or more companies apply to the same registration authority for a company name within the same or similar industry, priority is given to the party that applied first. If applications are submitted on the same day, the companies should resolve the matter through negotiation. If negotiation fails, the registration authority will make a ruling.

When two or more companies apply for the same company name to different registration authorities, the registration authority accepting the application first shall prevail, and if the applications are accepted on the same day, the companies should resolve the matter through negotiation. If the negotiation fails, the registration authorities will report to their common higher registration authority for a ruling.

First to register principle. In disputes arising between two or more companies over the same or similar registered company name, the registration authority will prioritise the company that registered the name first as the owner of the company name.

Disputes between Chinese and foreign (or regional) companies over company names within China’s jurisdiction, when brought to the registration authority for resolution, are handled by the State Administration for Market Regulation based on international treaties concluded or participated in by China.

Conflicts between names

Disputes between company names. Conflicts between company names usually arise when the names or trade names are the same or similar, including company abbreviation conflicts. In the online declaration of company names, if the system comparison indicates that the company name is the same or similar to any company name or trade name within the same industry under the same registration authority, the registration authority will mostly reject the application and require the applicant to change the company/trade name or add corresponding authorisation information. Therefore, disputes between company names mainly occur among companies registered with different registration authorities.

Conflict between company names and trademarks. Both the trademark and company name can be used to identify a company. It is not uncommon in practice that there is conflict between the trade name in a company name and a registered trademark. Such conflicts are mainly those between (1) a later company name and a previously registered trademark; and (2) a prior company name and a later-applied trademark.

Conflicts between company names and other rights. A company name may conflict with other rights. For example, if a company name is similar to the creations of other companies, it may involve a copyright conflict; if a company name is similar to a domain name already registered or used, it may trigger a domain name conflict.

The newly added rules on the right to name do not have any special significance from the perspective of the article itself, but their inclusion in the Company Law carries considerable importance. A company’s right to name holds a significant position in civil law, anti-unfair competition and intellectual property rights.

Additionally, it directly affects the customer’s understanding and identification of the enterprise, playing a crucial role in the company’s valuation and attractiveness as an investment. As a company grows, its right to name is one of the manifestations of the company’s core competitiveness. Therefore, the reaffirmation of the right in the new Company Law underscores legislative values.

Based on this, companies should attach great importance to the right to a company name, and use methods including but not limited to online screening to prevent any infringement. If any infringement is found, they should promptly protect their rights through legal means.

Wang Kun is a partner and Ding Tianmiao is an associate at Blossom & Credit Law Firm