2.1 company name reservations (s africa)


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2.1 company name reservations (s africa)

  1. 1. South African Perspective on Company Name Reservations Joey Mathekga Executive Manager: Customer Services (Acting) CRF 201O in Mauritius
  2. 2. Purpose of Presentation <ul><li>Provide the perspective of RSA on names – challenges in the current and opportunities in the new Companies Act of 2008 </li></ul><ul><li>Trigger engagement and discussion, collate input from feedback and influence further review of practice </li></ul>
  3. 3. Content <ul><li>Requirements in terms of Current Act, 1973 </li></ul><ul><li>ICT Tools currently and their limitations </li></ul><ul><li>Impact on Customers </li></ul><ul><li>Provisions in the New Companies Act, 2008 </li></ul><ul><li>ICT tools and their capability </li></ul><ul><li>Impact on Customers </li></ul><ul><li>Other related requirements from other Acts </li></ul><ul><li>Volumes </li></ul><ul><li>Some learnings to date </li></ul><ul><li>Name Objections </li></ul><ul><li>List of prohibited names </li></ul>
  4. 4. South African Landscape
  5. 5. Requirements in terms of Current Act, 1973 <ul><li>All companies and close corporations must reserve company names on payment of a fee </li></ul><ul><li>No incorporation possible without an approved name </li></ul><ul><li>Undesirability of a name is a ground for refusal of an application for a name </li></ul><ul><li>One can reserve – a proposed name; a literal translation of name; a shortened form of name and a defensive name </li></ul>
  6. 6. Requirements in terms of Current Act, 1973 <ul><li>Undesirability stems from – identical names; comparative names; names that are offensive; confusingly similar </li></ul><ul><li>Names not to mislead the public – claimed association with established brands; name differ materially from the main business; words suggesting governmental patronage or connection at any level of government; surnames, unless the major shareholder and or the directors bear such surname, former names and nick names are not allowed; Trade mark will only be allowed in the name of a company if the company is the proprietor of such trade mark, </li></ul>
  7. 7. ICT Tools Used currently <ul><li>We have currently employed and or deployed Verity K2 6.1.23. Search 97 server to assist with name searches on our companies, close corporations and co-operatives registered and reserved names on database. </li></ul><ul><li>This system is mainly character based search which depend solely on special characters and human intervention moreover discretional </li></ul>
  8. 8. Impact on Customers <ul><li>Customers are hampered from continuing with business due to the dependency </li></ul><ul><li>Customers are exposed to unnecessary litigation coming from big players, forced to change names </li></ul><ul><li>Change of branding and other details can be expensive for emerging enterpreneurs </li></ul><ul><li>High volumes and fluctuating submissions affects planning and efficiencies at registry level </li></ul><ul><li>There is an express queues for those who lodge more than 20 names, this relieves the bottleneck in the queues </li></ul>
  9. 9. Provisions in the New Companies Act, 2008 <ul><li>In terms of the new Companies Act, the registration number can be used as the initial process in case the name does not go through but that registration number has to be used in conjunction with the words “South Africa” at the end to which the Minister may prescribe additional commonly recognized symbols for use. </li></ul><ul><li>Further to the above, in terms of the new Companies Act, the proposed name of a company can be filled together with a Notice of Incorporation or a Notice of Amendment of a company’s Memorandum of Incorporation irrespective of whether the name has been reserved before the filling of such notice. </li></ul>
  10. 10. Provisions in the New Companies Act, 2008 <ul><li>A company name may comprise of words in any language irrespective of whether or not the words are commonly used including among other things symbols : =,+,&,% </li></ul>
  11. 11. Provisions in the New Companies Act, 2008 . If the Commission has reasonable grounds to believe that the person or applicant of the reserved name have abused the name reservation system by Selling access names, Trading in or Marketing reserved names, repeatedly attempting to reserve for the purpose of selling access to names, or trading in or marketing reserved names, the Commission may apply to court for an order prohibiting the person or persons from applying to reserve any name for a period to be considered by court.
  12. 12. Reliance on ICT tools <ul><li>Enterprise Content Management (ECM) which is meaning based search which will automatically conduct search in respect of meaning, phonetic, characters, synonym's, visually, all in alignment with the new Companies Act, </li></ul><ul><li>Meaning based system will automatically conduct searches, - Verification process to be employed to verify names approved prior to the name reserved can be received by the applicant, - ECM will further verify the approved name prior to the name going out to the applicant, - SMS’s will be sent to the applicant on the status of his or her name application and all other development pertaining the name, etc </li></ul>
  13. 13. Impact on Customers <ul><li>Customers will no longer see company registration as a privilege, more as a right </li></ul><ul><li>The opportunity to resolve disputes will be easy to access </li></ul><ul><li>The turnaround time for registrations will be turned around 360 degrees </li></ul><ul><li>Names lapse after a longer period (6 months) </li></ul>
  14. 14. Requirements prescribed in other Acts <ul><li>Consumer Protection Act (yet to be promulgated) </li></ul><ul><ul><li>“ Trading as” Names to be reserved under the New Companies Act </li></ul></ul><ul><li>Business Names Act </li></ul>
  15. 15. Volumes <ul><li>+-2500 applications received daily </li></ul><ul><li>3-5 days turnaround times </li></ul><ul><li>Team of Searchers and Approvers </li></ul>
  16. 16. Some learnings for a registry <ul><li>Issue up to date Practice Notes </li></ul><ul><li>Regularly update the list of prohibited names </li></ul><ul><li>If you have more official languages, take advantage (use words in other languages) </li></ul><ul><li>Do not make it a compulsory requirement for the name to be reserved before incorporation </li></ul><ul><li>Refer customers to the Trade Mark register (offer the online link conspicuously) </li></ul>
  17. 17. Name Objections <ul><li>If within a period of one year after the registration of any memorandum, in the opinion of the Registrar the name is undesirable, he shall within such period order the company concerned or the person to change the name. Such decision can only be reviewed in High Court. </li></ul><ul><li>If within a period of two years after the registration of any memorandum, the Court may on such application make such order as it deem fit. </li></ul><ul><li>In terms of the New Companies Act, Sec 160, A person may apply to the Companies Tribunal in the prescribed manner and form for a determination whether the name satisfies the requirements of Sec 11 </li></ul>
  18. 18. LIST OF PROHIBITED NAMES (This list is cannot be exhaustive) <ul><li>KULULA / KHULULA Well-known Mark </li></ul><ul><li>EDCON Well-known Mark </li></ul><ul><li>JET Well-known Mark </li></ul><ul><li>KGANYA / KHANYA Court Trends </li></ul><ul><li>PIMP MY RIDE Well-known Mark </li></ul><ul><li>FIFA Well-known Mark </li></ul><ul><li>SAFIKA Well-known Mark </li></ul><ul><li>MERAFE Well-known Mark </li></ul><ul><li>MARRIOTT Well-known Mark </li></ul><ul><li>TATA Well-known Mark </li></ul><ul><li>SUN MICROSOFT Well-known IT Company </li></ul><ul><li>DSTV Well-known Mark </li></ul><ul><li>ORANGE Well-known Mark ( In respect of IT only ) </li></ul><ul><li>ESKOM Well-known Parastatal </li></ul><ul><li>SARS Well-known Parastatal </li></ul><ul><li>SASOL / YSKOR Well-known Mark </li></ul><ul><li>AVIS Well-known Mark </li></ul>
  19. 19. <ul><li>BOSCH Well-known Mark </li></ul><ul><li>BRIDGESTONE Well-known Mark </li></ul><ul><li>CORNERSTONE Well-known Mark </li></ul><ul><li>DESTINY Well-known Mark </li></ul><ul><li>DISCOVERY Well-known Mark </li></ul><ul><li>IMPERIAL Well-known Mark </li></ul><ul><li>HOME CHOICE Well-known Mark </li></ul><ul><li>M3 / 3M Well-known Mark </li></ul><ul><li>BANK Unless approved by the Minister of Finance </li></ul><ul><li>STANDARD Unless approved by the Minister of Economic Affairs </li></ul><ul><li>RED CROSS / ROOIKRUIS Well-known Mark </li></ul><ul><li>ACCOUNTING / ACCOUNTACNY/ AUDITOR / AUDITING / BEREAU Professional Body </li></ul><ul><li>ADMINISTRATORS OF ESTATES / EXECUTORS / LIQUIDATORS / BOARD OF EXECUTORS Professional Body </li></ul>LIST OF PROHIBITED NAMES (cont…)
  20. 20. Thank you! Remember, it is only a few weeks to go before the Soccer World Cup!