Introduction

Selecting an appropriate business name is a critical first step in incorporating a company in the Philippines. The corporate name serves as the legal identity of the entity, distinguishing it from others in the marketplace while complying with regulatory standards. Under Philippine law, the process is primarily governed by the Revised Corporation Code of the Philippines (Republic Act No. 11232, or RCC), which replaced the old Corporation Code (Batas Pambansa Blg. 68) in 2019. The Securities and Exchange Commission (SEC) is the primary regulatory body responsible for approving and registering corporate names.

This article provides a comprehensive overview of the rules, restrictions, and procedures involved in choosing a corporate business name. It covers the legal framework, mandatory elements, prohibitions, the reservation and registration process, potential pitfalls, and best practices. Understanding these aspects ensures compliance, avoids legal disputes, and facilitates smooth business operations.

Legal Framework

The RCC outlines the foundational requirements for corporate names in Section 17, which states that no corporate name may be allowed by the SEC if it is not distinguishable from that of any existing corporation or partnership, or if it violates other specified restrictions. This provision aims to prevent confusion among consumers, protect intellectual property rights, and maintain the integrity of the corporate registry.

Additional guidelines are provided in SEC Memorandum Circulars, such as MC No. 13-2005 (Guidelines on Corporate Names) and subsequent amendments, including MC No. 5-2019, which updated rules to align with the RCC. These circulars detail the criteria for name approval, emphasizing uniqueness and appropriateness.

For foreign corporations seeking to do business in the Philippines, similar rules apply under Sections 143-144 of the RCC, requiring names that comply with local standards unless the foreign name is already protected under international agreements.

Mandatory Elements in Corporate Names

Philippine law mandates certain elements in a corporate name to clearly indicate the entity's nature and structure:

Corporate Designator: Stock corporations must include words like "Corporation," "Incorporated," "Corp.," or "Inc." at the end of the name. For non-stock corporations, appropriate terms include "Association," "Foundation," "Society," "Federation," "Alliance," "Institute," or similar designations that reflect their non-profit purpose.
Purpose Indication (if applicable): If the corporation's primary purpose involves regulated activities (e.g., education, healthcare), the name may need to incorporate terms that reflect this, subject to approval from relevant government agencies like the Department of Education (DepEd) or the Commission on Higher Education (CHED).
Filipino Language or Transliteration: Names can be in English, Filipino, or a combination, but must be transliterated into the Roman alphabet if using non-English scripts. Indigenous or regional languages are permissible if they do not violate other rules.

These elements ensure transparency and help stakeholders identify the entity's legal form at a glance.

Rules for Distinguishability

The core principle is that the proposed name must be distinguishable from existing registered names to avoid deception or confusion. The SEC employs a "sound-alike" and "look-alike" test, evaluating:

Phonetic Similarity: Names that sound similar when pronounced, even if spelled differently (e.g., "TechCore" vs. "TekKor"), may be rejected.
Visual Similarity: Names that appear alike, including abbreviations or acronyms (e.g., "ABC Corp." vs. "A.B.C. Corporation").
Conceptual Similarity: Names evoking the same idea or theme, particularly in the same industry.

The SEC maintains a searchable database of registered names on its website (www.sec.gov.ph), allowing applicants to conduct preliminary checks. However, final approval rests with the SEC's Company Registration and Monitoring Department (CRMD).

Exceptions exist for affiliates or subsidiaries, where similar names may be allowed if there is clear disclosure of the relationship and no risk of misleading the public.

Prohibited and Restricted Names

The RCC and SEC guidelines impose strict prohibitions to protect public interest, intellectual property, and regulated sectors. Key restrictions include:

Identical or Deceptively Similar Names: As mentioned, names cannot mimic existing entities, including those of partnerships, sole proprietorships registered with the Department of Trade and Industry (DTI), or trademarks registered with the Intellectual Property Office (IPO).
Government Affiliation: Names implying connection to the government, such as "Philippine," "National," "Republic," "State," or "Federal," are prohibited unless the entity is government-owned or has explicit approval (e.g., from the Office of the President).
Regulated Professions and Industries: Words like "Bank," "Banking," "Trust," "Insurance," "Finance," "Lending," "Pawnshop," "Engineer," "Architect," "Doctor," or "Lawyer" cannot be used unless the corporation is licensed by the appropriate regulatory body (e.g., Bangko Sentral ng Pilipinas for banks, Insurance Commission for insurers, or Professional Regulation Commission for professions).
Offensive or Immoral Names: Names that are scandalous, obscene, or contrary to public morals, policy, or law are barred. This includes those promoting illegal activities or discrimination.
Geographic Names: Purely geographic names (e.g., "Manila Corporation") are not allowed unless they indicate the principal place of business and do not imply exclusivity.
Historical or Cultural References: Names using terms like "Olympic," "Red Cross," or protected cultural heritage require special permissions from international bodies or the National Historical Commission.
Numerals and Symbols: While numerals are permitted, excessive use or symbols (e.g., @, #) may be restricted if they complicate registration or lead to confusion.
Trademarks and Intellectual Property: The name must not infringe on registered trademarks. Applicants are advised to search the IPO's database, as SEC approval does not guarantee trademark protection.

Violations can lead to rejection of the application or, post-registration, administrative penalties, including revocation of the certificate of incorporation.

Name Reservation Process

To secure a desired name, applicants can reserve it with the SEC before filing incorporation documents:

Online Reservation: Through the SEC's eSPARC (Electronic Simplified Processing of Application for Registration of Company) system or the SEC i-Register portal. The process involves submitting the proposed name and paying a fee (approximately PHP 100 for 30 days, extendable).
Validity Period: Reservations are valid for 30, 60, or 90 days, depending on the fee paid. If not used, the reservation lapses, and the name becomes available again.
Multiple Options: Applicants can submit up to three alternative names in case the primary choice is unavailable.
Verification: The SEC checks against its database and may require amendments if issues arise.

Reservation is not mandatory but highly recommended to avoid delays in incorporation.

Registration and Approval

Once reserved, the name is incorporated into the Articles of Incorporation (AOI) and By-Laws, submitted to the SEC for approval. The process includes:

Pre-Processing: Initial screening for compliance.
Evaluation: Detailed review by CRMD.
Approval: If compliant, the SEC issues a Certificate of Incorporation, making the name official.

For one-person corporations (OPCs), introduced by the RCC, similar rules apply, with the designator "OPC" required.

Changes to an existing corporate name require amending the AOI, shareholder approval (at least 2/3 vote), and SEC endorsement.

Consequences of Non-Compliance

Using a non-compliant name can result in:

Rejection or Delay: In incorporation applications.
Legal Challenges: From existing entities via opposition proceedings or court actions for unfair competition under the Intellectual Property Code (RA 8293).
Penalties: Fines ranging from PHP 5,000 to PHP 200,000, or revocation of registration for serious violations.
Civil Liability: Damages for trademark infringement or consumer deception.

The SEC may also issue cease-and-desist orders.

Special Considerations

Foreign Language Names: Must include an English translation in the AOI.
Acronyms: Permissible if the full name is provided in the AOI and not confusing.
Branch or Subsidiary Names: Foreign branches must use the parent company's name with "Philippine Branch" appended.
DTI Registration: For sole proprietorships or partnerships, names are registered with DTI, but corporations go through SEC. Coordination is needed if operating under a trade name.
Trademark Integration: While SEC registration protects the corporate name, separate IPO trademark registration is advisable for broader IP protection.

Best Practices and Tips

Conduct Thorough Searches: Use SEC, DTI, and IPO databases to check availability.
Be Creative yet Simple: Opt for unique, memorable names that reflect the business without overcomplicating.
Seek Legal Advice: Consult a lawyer or corporate service provider to navigate nuances.
Plan Ahead: Reserve names early, especially for competitive industries.
Monitor Changes: Stay updated on SEC circulars, as rules may evolve (e.g., post-RCC amendments).
Consider Branding: Ensure the name aligns with marketing goals and domain availability.

By adhering to these rules and restrictions, entrepreneurs can establish a strong, compliant corporate identity that supports long-term success in the Philippine business landscape.