【Brief Introduction】

Company A is a foreign-funded enterprise registered in the New Binhai District of Tianjin. It was wholly invested and established by Company B, a company registered in Hong Kong. Since Company A was transferred as a whole to Company C in the United States on a global scale, it no longer uses A as its name; instead, it intends to use the name of Company C in the new name of the company. Meanwhile, the name of Company C is also the name of Company B. Consequently, the intended new name consists of trade name C + industry D + (China) + Co., Ltd.; in other words, it reads as C D (China) Co., Ltd.

According to the relevant provisions of law on name approval, Company A shall apply for enterprise name approval with the State Administration for Industry and Commerce (hereinafter the “SAIC”). Based on the SAIC’s requirements, the Tianjin Municipal Administration for Industry and Commerce (hereinafter the “Tianjin AIC”) in Company A’s location shall first provide a Letter of Opinions on Verification and Approval of Change of Enterprise (Enterprise Group) Name (hereinafter the “Letter of Opinions”). Company A submitted application materials for approval of its enterprise name change to the Tianjin AIC in accordance with the requirement. After a preliminary examination, the Tianjin AIC issued the said Letter of Opinions, in which it approved the change of Company A’s name into C D (China) Co., Ltd.

After obtaining the Letter of Opinions from the Tianjin AIC, Company A applied for name approval with the SAIC. However, Company A was informed that it could not use “C” as its trade name, because the SAIC had previously approved the name of another company — “C International Trade Co., Ltd.”, which used “C” as its trade name. Besides, it was not registered in the SAIC’s registration system by using a term of classification of national economic industries to describe the industry that it engages in, in other words, there was no description of a specific industry. Consequently, according to the current legislation, Company A cannot use “C” as its trade name in any industry, and further the SAIC did not accept Company A’s application.

According to a search, in addition to the “C International Trade Co., Ltd.” mentioned above, “C” is also included in the names of some other famous enterprises, for example, “China C Technology (Group) Holding Co., Ltd.”, “China C Mechanical Engineering Co., Ltd.” and etc.

【Legal Analysis】

1.Elements and Legal Basis of “C D (China) Co., Ltd.” as an Enterprise Name

Whereas Company A’s application intends to change the enterprise name into “C D (China) Co., Ltd”, the elements and legal basis of such a name are listed as follows:

1)The enterprise name does not commence with the name of the administrative area where it is located; in other words, the enterprise name does not commence with Tianjin or Tianjin City.

Article 7 of the Administrative Provisions on the Registration of Enterprise Names provides as follows: A foreign funded enterprise may use an enterprise name not commencing with the name of the administrative area where it is located upon approval of the State Administration for Industry and Commerce.

Since Company A is a wholly foreign owned enterprise registered by a Hong Kong company, it applied for a name that does not commence with the name of the administrative area.

2)The enterprise name uses “C” as its trade name and “D” to represent its industry or business characteristics. The trade name is directly abstracted from the trade name of the shareholder of Company A, namely Company B. 

Article 10 of the Implementing Measures for the Registration and Administration of Enterprise Names provides as follows: A company may use the trade name of its investor enterprise from a foreign country (region) as its own trade name.

The investor enterprise here emphasizes on direct investment.

3)The type of the enterprise is a limited liability company.

4)“(China)” is used between the description of industry and the type of the enterprise.

Article 10 of the Implementing Measures for the Registration and Administration of Enterprise Names provides as follows: A foreign-holding foreign funded enterprise may use the word "(China)" in the middle of its name.

Since Company A is a wholly foreign owned enterprise established by a Hong Kong company, it is a foreign-holding foreign funded enterprise.

In the light of all the factors mentioned above, the intended name of Company A consists of the trade name, the industry description, the word “(China)” and the type of the enterprise. All these constituent elements are in conformity with the relevant normative documents.

2.Paradox in the Prior Approvals of Enterprise Names Including the Trade Name “C”

As mentioned above, according to the search, in addition to the “C International Trade Co., Ltd.” with no description of its industry, “C” is also included in the names of some other famous enterprises, for example, “China C Technology (Group) Holding Co., Ltd.” and “China C Mechanical Engineering Co., Ltd.” Based on to the relevant applicable provisions of law concerning the name approval over the past years, the following analysis can be made:

1)According to the elements of these names, if the names do not commence with the word “China” or the name of administrative area, it can be determined that the administration for the approval of all these names is the SAIC. If the name “C International Trade Co., Ltd.” was first approved, according to Implementing Measures for the Registration and Administration of Enterprise Names, if the name of an enterprise is under one of the following circumstances, it shall not be approved: … (ii) If it is identical with the name or identifier of an enterprise approved or registered by the same administrative authority for industry and commerce in accordance with the provisions of Article 18 of the Measures, with the exception of those having an investment relationship with each other. In other words, except for enterprises that have an investment relationship with “C International Trade Co., Ltd.”, any enterprise shall not be allowed to use “C” as its trade name. According to the investment relationships respectively disclosed by these companies, there is no investment relationship between them, then the question is: why the names of “China C Technology (Group) Holding Co., Ltd.” and “China C Mechanical Engineering Co., Ltd.” could be approved?

2)If the name of “C International Trade Co., Ltd.” was approved after the name approvals of the foregoing companies, then according to the Measures, if a term of the classification of the national economic sector is not used to describe the industry that an enterprise engages in, the following conditions shall be met: … (iii) If it is different from the trade name in the enterprise's name that has been approved or registered by the same administrative authority for industry and commerce. In other words, even if there is an investment relationship between the enterprises, as long as an enterprise first used “C” as its trade name, which means that “China C Technology (Group) Holding Co., Ltd.” or “China C Mechanical Engineering Co., Ltd.” was approved before, the name “C International Trade Co., Ltd.” cannot be approved as a name without description of the industry; at most “C” can only be registered and used as a trade name in a certain industry.

Consequently “C International Trade Co., Ltd.” cannot be approved as a name with description of the specific industry.

【Conclusion】

From the foregoing analysis of the legal problems, Company A’s application to use “C D (China) Co., Ltd.” as its name is in compliance with the law, while the approval of “C International Trade Co., Ltd.” as a name without description of the specific industry was flawed in procedure or in content. Consequently Company A shall be entitled to use “C” as its trade name in the industry D.

By the day that this article is contributed, Company A is still communicating with the SAIC and presently there is no clear result over this matter at present.