Previous Legislation
Company Name Requirements
Re-registration of Existing Company Names
The Commercial Law entered into force on January 1 2002 and has brought changes in respect of the use of company names. Presently, there are many enterprises in Latvia which have names that are identical or similar, and which can be easily mistaken for one another. Under the Commercial Law it will no longer be possible to use similar or insufficiently distinctive company names.
Prior to the entry into force of the Commercial Law, the use of company names was regulated by enactments including:
- the Law on Limited Liability Companies;
- the Law on Joint Stock Companies; and
- the Law on the Republic of Latvia Register of Enterprises.
The following restrictions were stated in respect of selection of the company name:
- The name must contain a reference to the form of the company (eg, joint stock company);
- The name must comply with the requirements of Latvian grammar (except for enterprises in which over 40% of the share capital is foreign owned) and moral norms; and
- The name could be used in business activity only after its registration in the Latvian Register of Enterprises.
Until the enactment of the Commercial Law, the law did not prohibit the use of company names similar to those already registered in the Register of Enterprises.
The Commercial Law has changed the requirements on the selection and use of company names. The main requirement stated in respect of a business's company name is that it must clearly and expressly differ from other names entered in the new Commercial Register. Further, selection of the company name is limited by the following conditions:
- The name may not contain misleading information regarding important circumstances within the scope of commercial rights, especially regarding the type of business or commercial activities or the scope of commercial activities;
- The name may not be contrary to moral norms;
- There are restrictions on use of the words 'Latvia', 'state' and 'municipality', as well as local place names; and
- A designation which forms a substantial part of a trademark protected in Latvia may be contained in a company name only if written permission has been received from the relevant trademark owner.
Under the new law Roman lettering may also be used in the company name.
In protecting its company name a business may (i) claim for termination of illegal use of its company name, and (ii) claim compensation from the illegal user for resulting losses.
Re-registration of Existing Company Names
Company names which were registered in the Register of Enterprises prior to the Commercial Law's entry into force, as well as the business itself, must be re-registered in the Commercial Register by December 31 2004. Many of these company names will not comply with the requirements of the Commercial Law, since in the absence of sufficiently strict requirements regarding the mutual distinctiveness of company names, many identical or similar company names were registered in the Register of Enterprises.
In order to resolve this problem, the law implementing the Commercial Law contains provisions specifying which businesses will have to abandon their existing company names and which will be able to retain their names and register them in the Commercial Register.
The law implementing the Commercial Law states that until December 31 2003, the Commercial Law's requirements regarding the clear and express distinctiveness of company names will not apply to names which were registered in the Register of Enterprises prior to the Commercial Law's entry into force (January 1 2002). Therefore, registration of existing company names in the Commercial Register is allowed even if they could be confused with others.
Priority rights
However, it is not possible to register identical company names in the Commercial Register, even if these names were registered before the Commercial Law's entry into force. Therefore, the law implementing the Commercial Law provides for the priority rights of individual businesses to their company names. In the case of identical company names, priority rights will be granted to the name which was first recorded in the Register of Enterprises. Priority rights cannot be obtained by the business which first applies for registration in the Commercial Register.
The law allows for the transfer of priority rights to another company by way of a notarized agreement to this effect. Priority rights are lost if an application regarding registration of the name is not submitted to the Commercial Register by June 31 2003. After December 31 2003 the Commercial Registration Office will bring court actions against any business which registers a company name that is identical to that of another business, and which does not have priority rights by virtue of law.
For further information on this topic please contact Filip Klavins at Klavins & Slaidins by telephone (+371 703 5222) or by fax (+371 703 5252) or by email ([email protected]).