In the dynamic landscape of business operations within China (PRC), the significance of selecting and safeguarding a company's name is crucial for multinational enterprises. This article aims to provide a concise yet comprehensive guide, offering practical insights and strategies for effective enterprise naming in China.  

Structure of Enterprise Names

A typical Chinese enterprise name must contain the following four parts:

• Administrative area (province, city, or county).

  
  

• Enterprise's trade name.

  
  

• Industry or business features.

  
  

• Organizational form.

  
  

Language Requirements

• Enterprise names must use standard Chinese characters.

  
  

• Prohibition of Pinyin or Arabic numerals in names.

  
  

• If translation into a foreign language is necessary, the company may translate its Chinese name at its discretion.

  
  

• The translated name doesn't require verification, approval, or registration with an AMR.

  
  

• Notably, the translated name lacks protection under Chinese laws and regulations.

  
  

Registration Procedures

For registration procedures, applicants have two options: submit materials to a local AMR or use the online name declaration system. The SAMR provides a publicly accessible enterprise name database for reference, ensuring proposed names adhere to existing rules. While some local AMRs like Beijing, Shanghai, and Guangdong offer online systems for name availability checks, there's no unified national enterprise name database.

Upon declaration, the local AMR retains the name for two months (or a year if approval is needed for business establishment or scope). Registration must be completed within this period. If an enterprise name violates the 2020 Enterprise Names Provisions, the local AMR won't register it and must provide written explanations to the applicant.

Administrative Areas

An enterprise name generally includes the administrative area where it operates, but if the business spans multiple provinces, it can omit the administrative division.

Exceptions regarding districts in municipalities:

- With municipal AMR approval, a district name in a municipality can be used in conjunction with the municipal administrative area.

- With provincial AMR approval, an enterprise name may combine a provincial administrative area with a municipality and a county.

Trade Names

• Enterprises have flexibility in choosing trade names, which must consist of more than two Chinese characters.

  
  

• Restrictions on trade names include avoiding misleading terms like "national level," "highest level," or similar.

  
  

• Prohibitions on using foreign city or district names, administrative areas (except at or above county level with other meanings), and terms related to occupation, position, etc.

  
  

• Some trade names labeled as decorative by the SAMR, such as "global" or "high-tech," may be rejected at the SAMR's discretion.

  
  

• Foreign-invested enterprises (FIEs) often use Chinese translations of parent companies' trade names; it's advisable for the parent company to register the translation as a trademark in China for better protection against infringement.

  
  

Industry Descriptions

While no specific legislation mandates the industrial sector description in an enterprise name, the standard reference is the Industrial Classification for National Economic Activities. The enterprise should reflect its core business in alignment with this classification.

In cases where the Industrial Classification lacks relevant stipulations, enterprises can refer to industry norms, professional literature, or other expressions to indicate industry or business characteristics in their names.

Notably, an enterprise operating across multiple industry sectors is not obligated to include specific industry or business characteristics in its name.

General Restrictions

Enterprise names are prohibited from including terms that undermine national interests, violate public order, or involve political affiliations, including names or abbreviations of political parties, the Communist Party, government or military organs, or mass organizations. Prohibitions also extend to names of foreign countries, obscenity, discrimination, and deceptive or misleading content.

Within the same registration authority, applicants must avoid proposing names identical to those of enterprises in the same industry, especially when the other enterprise's name is registered, within a retention period, or recently underwent changes. Exceptions apply if there's an investment relationship with the other enterprise. An online enterprise name comparison system facilitates checking for identical or similar names and helps prevent conflicts.

Trade Names and Registered Trademarks

Protection of exclusive rights for registered trademarks and trade names falls under China's trademark legislation, anti-unfair competition law, and enterprise name administration legislation. However, a registered trade name doesn't grant immunity from challenges based on trademark infringement.

The substantial use of words in a trade name identical or similar to another's registered trademark may constitute trademark infringement if it misleads the public.

Prominent companies, including Starbucks, have litigated in Chinese courts to protect trade names. To mitigate legal risks, enterprises can:

• Register their trade name as a trademark.

  
  

• Purchase the registered trademark from the owner.

  
  

Conflicts with Existing or Cancelled Trade Names

The exclusive right to an enterprise name applies within a specific administrative area and industry. To avoid conflicts, an applicant may register a trade name in a different administrative area or industry, especially if industries are the same or similar.

Certain enterprise names, like those with “China”, must register with the SAMR. However, SAMR registration isn't considered a separate administrative area. Enterprises should carefully navigate these considerations to prevent disputes.

PureLaws Advice

A meticulous approach to enterprise naming and protection is essential for multinational companies in China. By adhering to these guidelines and strategic considerations, companies can navigate the regulatory nuances and safeguard their identity effectively. Your success in this thriving market begins with a thoughtfully chosen and protected company name.

Recognized as one of the most innovative legal service providers, PureLaws (A&E Law Firm China) offers a different perspective to commercial thinking and the client experience.