The “Administrative Provisions on the Registration of Business Names” has been amended, which will be effective on 1 March 2021

A business name is the main factor on distinguishing the market operators. With the development of economy, the market operators are increased, so the rule on the administration of business name is important. However, business names are managed by administrative divisions independently; some market operators would register same or similar business names in different cities, with which those market operators could achieve the illegitimate purpose of “Free-ride”.

In order to regulate business names, and administrate unfair competition behaviors, on December 14, 2020, the 118th executive meeting of the State Council passed the revised “Administrative Regulations on Enterprise Name Registration” (hereinafter referred to as the “New Regulations”). This revision mainly involves the following aspects:

1. Applicants may declare their business names by themselves and the relevant proposed business names would be inquire, compare and screen in the system online or by the service window offline.

Previously, a market operator shall obtain a pre-approval of its business name, and the name will be kept for 6 months upon the approval. The measure has occupied many name resources, and has been abolished several years ago. However, under the current administrative rules, it is common to see a market operator has submitted the application materials, and the proposed names could not pass the examination. The “New Regulations” stipulates that applicants could declare by themselves, and inquire, compare and screen their proposed business name in advance, which can make the business name registration procedure more effective. In addition, the “New Regulations” also requires applicants to make a promise that the proposed names have not infringed other parties’ right. This adjustment changes the administrative management from pre-management to in-process management.

2. To clarify the rules for the business names of foreign-invested enterprises

The “New Regulations” deletes the provisions that foreign-invested enterprises are not required to bear the administrative divisions in their business names upon approval. However, it adds that for any wholly foreign-owned or holding foreign-funded business using the business name of a foreign investor, its name may contain such words as “(China)”.

3. To strengthen the administrative handling of infringements

The “New Regulations” added rules for administrative handling of infringements:

(1) Regarding the procedures, if a right holder requests the business registration authority to deal with the relevant dispute, the authority may conduct mediation after accepting the application; where the mediation fails, the authority shall make an administrative ruling.

(2) Regarding the time limit, the authority shall make an administrative ruling within 3 months as of the date of acceptance.

In addition, the “New Regulations” also stipulates that if the right holder files a lawsuit and wins the lawsuit, then the infringer shall change its business name within 30 days as of the date of receipt of the effective legal document.