Corporation law

After the reform of trade law came into effect (July 1, 1998), each commercial company, regardless of the size, can have a corporate name entered in the Register of Commerce. The companies can form their corporate names as factual or fantasy names or also names containing actual names. This applies equally to all legal forms. But as was also the case with corporate law valid up to then, the corporate name must have distinctive power and not be obviously misleading. In addition, the matching suffix for the legal form must always be stated in the corporate name in future.


I. Rules for non-merchants


The following rules of corporate law apply to enterprises entered in the Register of Commerce. Traders who are not entered in the Register of Commerce do not have a corporate name. They must always appear in business dealings with their first name and surnames. In the event of a civil-law partnership, the first name and surname of all partners must be stated. Alongside the name, branch designations may also be used, e.g. John Smith, Computer Service. Establishment or shop designations, e.g. the Golden Duck, Lion Chemist’s Shop, but also Boutique 2000 may be used. Establishment or shop designations are not a component part of the official name of the enterprise. They are only admissible if they do not have the effect of a corporate name already entered in the Register of Commerce or are not already being used by another enterprise in a similar branch.


II. The corporate name of merchants


1. Distinctive power
A corporate name merely comprising general factual and regional designations does not possess sufficient distinctive power as a rule. This would be the case for example with the corporate name Italian Shoes KG. Therefore, inclusion of an individualising addition is always necessary, i.e. a designation which individually only identifies this one enterprise and distinguishes the corporate name from others. For example, a combination of at least two letters, a partner’s name or a fantasy designation is suitable (e.g. TVW Italian Shoes KG, Boutique Toni e.K. or Ikarus EDV GmbH).

2. Factual names, names containing a name and fantasy names
The factual corporate name contains information about the enterprise’s commercial activity or branch (e.g. ABC Software Development KG or TOPTEC Computer Sales AG).

A corporate name containing a name gives information about the name of one (or more) partner(s). For example, it may be Müller AG or Schmidt & Meier GmbH.

Fantasy names merely comprise fantasy designations (e.g. TOPEC AG; Phönix KG). These fantasy designations can also be registered trademarks.
Mixed corporate names (of names, factual and/or fantasy designations) are also admissible.

3. Using the suffix for the legal form
The corporate name must additionally contain a suffix for the legal form showing the enterprise’s liability situation. Easily comprehensible abbreviations can be used. Sole traders have the designation “registered trader” (German: “eingetragener Kaufmann”, “eingetragene Kauffrau” or an abbreviation, e.g. “e.K.”, “eK”, “e. Kfm”. or “e. Kfr”). A general partnership can use the abbreviation oHG, a limited commercial partnership KG. A limited liability company can, depending on the provision with capital, use the designation “GmbH” or “Unternehmergesellschaft (haftungsbeschränkt)”, also “UG (haftungsbeschränkt)”. A joint-stock corporation can use the abbreviation AG. If no natural entity is liable in a general partnership or a limited commercial partnership, the limitation of liability must be recognisable in the corporate name, e.g. by the suffix GmbH & Co. KG or GmbH & Co. oHG, as the case may be.

4. Misleading
The corporate name may not contain any additions obviously suited to deceiving. For example, the name of ABC Handels GmbH (ABC Trade LLC) is inadmissible if the enterprise merely gives consultancy. Likewise, the corporate name XYZ Beratung München KG is misleading if the company has no relationship to Munich, is based in Frankfurt and is to be entered in the Register of Commerce there.

To avoid subsequent complaints and costly amendments and also to accelerate the entry, you should coordinate the planned corporate name with the Chamber of Commerce and Industry, Law and Taxes Department, in writing beforehand!

5. Risk of confusion
Even if the corporate name you have chosen fulfils company law fundamentals, it is possible that it will not be entered in the Register of Commerce. This could be the case, for example, if an identical or confusable corporate designation has already been entered in the Register of Commerce in the same town or borough.

If there is an identical or confusable corporate designation in another town, this is of no interest for the entry in the Register of Commerce. However, an enterprise based elsewhere may possibly make claims under competition law or trademark law. Proceedings for refraining from using the company name will be successful if it has used the designation which you are using before you as a corporate name or trademark and is active in the same or a similar branch.

In order to keep the risk of a conflict as low as possible, we recommend examining whether the required name is already being used by other enterprises before having the designation entered or using it.