On 4^th August 2017, the State Administration for Industry and Commerce ("SAIC") has issued the Rules for Prohibiting and Restricting Use of Certain Enterprise Names (the "Rules") and the Rules for Comparing Identical and Similar Enterprise Names.

The rules for prohibiting use of certain enterprise names:

1. a proposed enterprise name applied for with an enterprise registration authority should not be identical to the name of another enterprise engaging in the same industry that has been registered at or approved by such authority:
   • such as where the proposed enterprise name is the same as the name of an enterprise engaging in the same sector which has been deregistered for less than one year;
   • such as where the proposed enterprise name is the same as the name of an enterprise engaging in the same sector which name has been changed for less than one year;
   • such as where the proposed enterprise name is the same as the name of an enterprise which registration is cancelled or which business license is revoked but such enterprise does not make the deregistration procedures; and
   • such as where the proposed enterprise name is the same as the name of an enterprise which is registered, or which is approved and within the valid term, or which is applied but under the approval;
2. a proposed enterprise name applied for with an enterprise registration authority should not have any word which damage the national or public interests;
3. a proposed enterprise name applied for with an enterprise registration authority should not have any word which will cause the public cheated or misunderstood;
4. a proposed enterprise name applied for with an enterprise registration authority should not have any word the same as the country name or the area name of the foreign countries, the name of international organization, the name of the political parties, units or social organizations;
5. Other situation e.g. foreign characters, alphabet, number and etc.

The rules for restricting use of certain enterprise names. The following are listed as the one of the common situations.

1. a proposed company name should not be similar to another company name used in the same sector either, unless there are investment relations between such two company;
2. a proposed company name is required to contain the name of the administrative area where the planned company will be located; however, it is allowed not to contain the name of the administrative area where the planned enterprise will be located, provided that any of four conditions is met, such as where the registered capital (or registered funds) is no less than CNY50 million and an approval has been granted by the SAIC for the exclusion of the administrative area's name.
3. a company is prohibited from using standardized characters under the protection of the SAIC for well-known trademarks of its counterparts in the same industry, unless otherwise as authorized by well-known trademark owners concerned.

The main points of the rules for comparing similar enterprise names: the pronunciation of the trade name is similar; the company name which contains or is contained of the name of other companies is approved or registered.

Dongjin comments:

In the former practice, the application of the name was much more approved at the discretion of the officers. With the implementation of the new rules, it provides the exact legal basis on what name is prohibited or restricted from the name application. It also provides the detailed legal basis for the government opening the online name application system and completing the name comparison system.

If you have any questions, please send the email to me.

Ms. Jojo Hu                

TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021

Email: jojohu@shanghaiinvest.com