Choosing a Permissible Company Name in Germany.

Anyone forming a company will usually think first about external impact and recognisability when choosing a name. The problem: however good a name may sound, if it does not comply with the rules on company names, registration will fail before the register court. This article sets out five core questions that can help avoid many rejections. In addition, the company name must include the statutory legal form suffix – for a Gesellschaft mit beschränkter Haftung (GmbH), that means “GmbH”; for an entrepreneurial company with limited liability (Unternehmergesellschaft (haftungsbeschränkt) – UG), it must be “UG (haftungsbeschränkt)”.

What the law means by “Firma”

In everyday language, the German word “Firma” is often used to describe the business itself. In legal terms, however, it means only the name under which a merchant (including a trading company such as a GmbH, which is likewise a merchant) conducts business (Section 17 HGB). For that reason, the article simply uses the term “company name”.

Question 1: Is the company name readable and pronounceable?

If a company name is to function as a name, it must be readable and pronounceable for an average reasonably informed market participant. Imagine two such market participants trying to discuss your business on the phone. If the company name were ”%*´=ы! GmbH”, that would probably be too much of a challenge.

That said, the company name does not have to be pronounceable as a word – it is enough if the individual characters can be spoken. For the average market participant in Germany, the following are readable and pronounceable: Latin letters (including arbitrary combinations of letters), Arabic and Roman numerals, punctuation marks and certain special characters (”&”, ”+”, ”-” and, at many register courts, including Berlin, now also ”@”).

Question 2: Is the company name distinctive?

In our practice, a lack of distinctiveness is one of the most common reasons why register courts reject company names.

At this stage, the question is not yet whether a similar company name already exists. The prior issue is whether the proposed name is capable at all of sufficiently individualising the legal entity behind it. Readers and listeners must be able to associate the name with one specific legal entity. That is not the case, in particular, if the company name is too generic or purely descriptive. More specifically, it helps to distinguish according to the type of company name involved:

Fantasy names – in particular invented words and strings of letters – are almost always distinctive, provided they do not consist only of single letters or numerals (“A GmbH”). Personal names – meaning names composed of a civil name, usually that of the proprietor – will likewise, as a rule, be distinctive, even if they are very common names. Difficulties arise, by contrast, with descriptive names, i.e. names that refer to the company’s activity or location. These must not be exhausted by generic designations of goods, industries or places.

The name “Berliner Brauerei GmbH” for a brewery in Berlin may sound like a marketing coup, but in reality it merely reproduces the place and the business activity of the company – it has no individualising effect. In addition, there is a general public interest in keeping such terms free for use by everyone. For example, the distinctiveness of the company name “Software AG”, which was registered in Darmstadt in 1970, would probably have to be denied if that name were applied for today.

The often preferred “escape into a foreign language” helps only if the typical market participant, due to lack of language knowledge, would not also perceive the translation as purely descriptive – in other words, only if the descriptive name thereby becomes a fantasy name. What will usually suffice, however, is the addition of an individualising element. “BB Berliner Brauerei GmbH” or “Berliner Brauerei Schulze GmbH” would therefore be sufficiently distinctive.

Question 3: Is the company name consistent with accepted standards of morality?

Does your desired company name violate criminal law provisions (for example, Section 130 German Criminal Code (StGB) or Section 86a StGB), is it excessively vulgar or otherwise offensive to the moral sense of fair-minded people?

Caution: The register court will refuse registration (we have seen this happen in Berlin in relation to the company name element “Guerrilla”).

Question 4: Is the company name non-misleading?

As soon as a company name conveys information about material business circumstances of the company (location, size, industry, importance, market level, specialisation, etc.), it must not be capable of misleading the public. In registration proceedings, however, this objection will be considered only where the misleading nature is obvious (Section 18(2) HGB). To assess this, the register court will compare the company name with the stated corporate purpose and, if necessary, request further information about the business operations or consult the Chamber of Industry and Commerce.

Below are some basic scenarios based on the existing case law:

• If the company name contains an academic title or a particular professional qualification, the proprietor or one of the shareholders must in fact hold that title or qualification.
• The use of name elements such as “municipal”, “church”, “university” or “institute” suggests a connection with state institutions, churches or academic institutions. If that connection does not in fact exist, such a name will generally be misleading.
• Describing a business as a “specialist shop” requires a broad product range in the relevant field, expert advice and a correspondingly presented business. Terms such as “wholesale” or “consumer market” must likewise reflect the true facts to be permissible. The same applies to terms such as “factory” or “works”, which in business practice are still associated with industrial-scale manufacturing involving machinery, division of labour, an in-house sales organisation and a broader product range.
• Geographic descriptions must also be accurate. They do not, however, necessarily have to refer to the company’s registered office. A connection to the actual area in which the company operates is sufficient. The same applies to additions such as “European” or “international”.
• Some designations also enjoy special statutory protection and may therefore be used only by specific types of legal entity. The designations “und Partner”, “Partnerschaft” or “partners”, for example, are in principle reserved for professional partnerships (Partnerschaftsgesellschaften). In the financial sector, regulatory terms such as “bank”, “capital management company”, “investment fund” or “invest” require the relevant registration and authorisation by the competent supervisory authorities (usually the German Federal Financial Supervisory Authority – BaFin).
• The designation “Group” or “Gruppe” may be misleading if there is in fact no group of companies. In holding structures with several subsidiaries, that will rather support the existence of such a group; what matters, however, are the specific facts and the register practice in the individual case.

Question 5: Is the company name still available?

Only once the questions above can be answered in the affirmative is it worth looking at availability. As a matter of company name law, the first issue is limited to the same locality or municipality: the new company name must be clearly distinguishable from names already registered there – and not only in the commercial register, but also from entries in the registers of cooperatives, civil law partnerships, professional partnerships and associations (Section 30(1) HGB). Put briefly: the new company name must be clearly distinct both in writing and in sound.

The risk of confusion is generally greater the more two legal entities with similar names address the same market. Company names used in the same industry therefore tend to require greater differentiation than names in completely unrelated sectors. Distinguishability depends on both the wording and the sound of the name. If two company names are spelled differently but are pronounced the same or similarly, there is a risk of confusion. In the case of descriptive names, the semantic meaning becomes an additional important criterion – for example, the historical Reichsgericht regarded the names “Ostdt. Brennstoffvertrieb GmbH” and “Ostdt. Betriebsstoffgesellschaft mbH” as too similar because the latter term was a broader category that included the former.

To research already registered company names, the online register portal is a good starting point (handelsregister.de). The search should first be limited to the locally relevant register court and then carried out using the various available parameters (“all keywords”, “at least one keyword” and “similarly sounding keywords”). The search function can be used free of charge and without registration.

If that search does not reveal any confusingly similar company name, one can generally assume that registration is possible. But the search should not stop there. The fact that company name law limits the availability review to the location of the business does not mean that someone could, for example, operate a second “adidas AG” in Berlin with impunity (except perhaps a Mr Adidas; but even he would be well advised to add a first name) simply because no corresponding entry yet exists there in the commercial register. Trade mark law and unfair competition law must also be considered, and these generally provide protection throughout Germany.

The owner of a trade mark right can demand that the infringer cease and desist and – where the infringement is culpable – can also claim damages. Section 5 of the German Trade Mark Act (Markengesetz – MarkenG) governs “business identifiers”, which also include company identifiers (Unternehmenskennzeichen). These are signs used in the course of trade as a name, company name or special designation of a business or undertaking. Unlike a trade mark, a company identifier does not have to be entered in the trade mark register in order to enjoy protection. As a rule, protection instead arises as soon as commercial use begins.

That protection can potentially extend to the whole of Germany – but only if the designation is not used merely locally and therefore does not have only territorially limited distinctiveness and identifying force. The use of the company identifier of a snack bar on Lake Constance will therefore generally not preclude the use of that identifier as the company name of another snack bar in Berlin.

For this research, it makes sense, first, to search the online register portal without limiting the search to the locally competent register court, i.e. on a Germany-wide basis. Depending on the search term, this may of course produce an alarming number of results. Since company identifiers are not limited to registered company names, but also include other business designations, a general internet search engine should also be used. Particularly in the case of fantasy names, one can nowadays be relatively confident that a business identifier used in commerce with sufficient distinctiveness will also be found quite quickly through a search engine.

Using a company name may also infringe a registered trade mark right. Trade marks are easier to identify than company identifiers because, as a rule, they require registration in the trade mark register. Anyone can carry out a trade mark search free of charge on the website of the German Patent and Trade Mark Office.

Practical Search Sequence

For an initial screening, the following sequence is useful:

1. Local commercial register: search at the competent register court for identical and similarly sounding company names.
2. Germany-wide register search: search the online register portal without limiting the search to the registered office location.
3. General web search: check whether business identifiers are already being used in the market.
4. DPMAregister: search for German trade marks and relevant owners.
5. EUIPO search: check EU trade marks and TMview entries if the name is to be used online, across Europe or cross-border.
6. Domains and social media handles: check practical usability, especially .de, .com, LinkedIn, Instagram and app-store names.

The availability of a domain or handle does not replace legal clearance. Conversely, a name may be legally permissible but commercially awkward if key domains or profiles are already used by third parties.

In doubtful cases, ask the Chamber of Industry and Commerce

When determining the market perception relevant for most of the requirements above, register courts will in doubtful cases consult the local Chamber of Industry and Commerce (sometimes, unfortunately, even in cases that are not all that doubtful). To speed matters up, however, you can also request an opinion from the Chamber yourself in advance and submit it directly to the register court together with the company name application. This is particularly worthwhile where distinctiveness (Question 2) is borderline or where there is a risk of the name being misleading (Question 4). In Berlin, the enquiry can now be submitted online (link).

Advance coordination with the Chamber often saves only one intermediate step. The real work remains the same: finding a company name that is distinctive, non-misleading and does not infringe prior rights.