In legal parlance, a business name (firma) is the
designation of an undertaking, whether a sole trader,
partnership, or company. The principal rules for
creating business names are laid down under the
Civil Code (“CC”) and the Commercial Companies
Code (“CCC”). The business name of a natural
person (individual) is his or her first and last name
and of a legal person, its business name. In addition
to the basic data provided for under law, the business
name may also include other optional designations,
such as the scope of business, location, or an alias.
The limits are framed above all by the principle of
truthfulness: the business name should be
sufficiently distinct from business names of other
undertakings and it cannot be misleading, in
particular as regards the identity of the undertaking (sole trader, partnership, or company), objects and
place of business, or supply sources. Pursuant to
Article 5 of the Act on Counteracting Unfair
Competition of 16 April 1993, any activities in
breach of the above are acts of unfair competition.
By definition, a business name incorporating the last
name of a third party violates the above
requirements. However, Article 439 § 1 of CC
provides that an undertaking may authorise another
undertaking to use its business name unless it is
misleading. It must be noted that no transfer of the
business name is involved here, as such a transaction
is impermissible and an agreement providing for it
would be unconditionally invalid. The authorisation
referred to above offers the opportunity to employ
the market standing and reputation of another
undertaking, thus improving the success prospects of
a fledgling business. A case in point is a franchising
agreement under the terms of which the franchisor
gives its various franchisees the right and at the same
time imposing an obligation on them to conduct the
business in line with the principles prescribed by it;
the franchisor among others authorises its
franchisees to use its business name.
Pursuant to Article 438 § 1 of CC, in the event a
name partner/shareholder ceases to be a member, the
partnership/company may retain his or her name as
included in its business name only with a written
consent and in the event of his or her death, with the
consent of his or her spouse and children. The
requirement of written form has been prescribed here
for evidentiary purposes (ad probationem). The
outgoing partner/shareholder may but is not required
to grant such a consent. This is a personal right, and
the
other
partners/shareholders
and
the
partnership/company may not enforce granting such
a consent before the court. The same holds true for
an undertaking taking over a business under e.g. a
transfer agreement, as pursuant to Article 438 § 2 of
CC, the obligation to obtain the consent applies as
appropriate in the event the business of one natural
person is continued by another natural person being
his or her legal successor.
One should also note the principles pertaining to the
formulation of the business (trading) name of a
natural person in case of takeover. In order not to
mislead other entities, the business name must
indicate as required the identity of the individual
currently conducting the business, and the name of
the predecessor can be incorporated in the business
name as the optional item referred to above.
As provided for under legal regulations, the
acquisition of a right to another undertaking’s
business name is possible under certain conditions,
the purpose being to provide security to the
businesses operating in the market as well as the
consumers.
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Skarbowców 23a
53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary
of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the
basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in
individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant
legislation or other legal development to the particular facts can be verified.