Jingyun Wang
On March 1, 2021 the “Amendments to the Regulations on Administration of Enterprise Name Registration” (the “Regulations”) came into effect.
These Regulations cover enterprise name registration, and are designed to protect the legitimate rights and interests of enterprises, address unfair competition, maintain social and economic order, and broadly optimize the business environment.
We summarize some of the important changes found in the 26 articles of the amended below.
Registration and name approval
A major update in the amended Regulations is that the enterprise name registration process has been shifted from a pre-approval system to a self-declaration system. Previously, the registration authorities needed around 7 working days to handle the examination, judgement, and approval process. Now, as of March 1, applicants can submit and immediately register their enterprise’s name online.
Permitted names
The amended Regulations also update some guidelines for the use of words like “Branch” (art.13) and “Group” (art.14). Additionally, there are 9 circumstances that will disqualify a name, such as names that contain discriminatory content related to ethnic, racial, religion, and gender, contain obscenity, or broadly violate public order (art.11).
The Regulations also require that an enterprise indicate its industry or fundamental business activities in its name according to its main business and the national industry classification standards (art. 9).
Other than wholly foreign-owned or controlled foreign-invested enterprises that use the foreign investor’s name, the use of words like ‘China’ or ‘National’ in the enterprise’s name will need approval from the State Council.
Name right protection
Applicants must also ensure that the information they submit is true, accurate, and complete, and also certify that they will bear any legal consequences related to infringement upon the legitimate rights and interests of others. This includes circumstances where there is similarity between their enterprise names and other legally registered enterprise names (art. 16).
Article 17 goes on to clarify that a proposed name shall not be identical to an existing name, (unless there is an investment relationship) where there is:
-an enterprise name that has been registered or is within the retention period;
-an enterprise name that has been cancelled or changed within less than 1 year;
-a name of an enterprise whose business registration has been revoked within less than 1 year.
Infringements
In the case of an infringement, an enterprise may file a lawsuit with the appropriate People’s Court or apply to the Enterprise Registration Authority (ERA) that registered the suspected infringing enterprise to make a ruling.
If the Enterprise Registration Authority accepts such an application, it may conduct a mediation. If the mediation fails, the ERA shall make an administrative ruling within 3 months from the date of acceptance (art. 21).
Article 23 states that an enterprise must change its name within 30 days of receiving an official legal document indicating that the use of the name must be stopped due to a decision by either a Court of the ERA. The name will then be mandatorily replaced with a unified social credit code. If an enterprise fails to change within the time limit, it will be ‘blacklisted’ until the change is completed.
Bottom lines
We think these amended Regulations represent part of an ongoing attempt by China to enact various reforms aimed at improving overall government service efficiency, and optimizing the commercial and business environment.
At DaWo Law Firm we acknowledge that an enterprise name is crucial to a business, and is usually associated with a specific reputation or identification with a product or service. If you need any help with registering your enterprise name or have any questions regarding this article.
