In Spain, the first step when incorporating a company is the application for a certificate which accredits that there is no other company with the same name as that intended for the new company.
The Spanish Capital Companies Act and the Commercial Registry regulations prohibit the use of a business name which is identical to one already registered.
In the case giving rise to the publication of the resolution of the General Directorate of Registers and Notaries (Dirección General de Registro y Notariado – DGRN) of 27th November 2017, the business name “Tu Gestoría en Línea” was applied for. This name generated a positive certification from the Central Commercial Registry, meaning that the Registry considered that the applied for name was substantially identical to a previously registered name Gestión de Líneas”. The applicant of the former business name filed an appeal against said positive certification arguing that the name applied for and the existing name neither had the same company purpose, neither did they sound the same.
In the resolution, the DGRN confirmed that in corporate matters, the Spanish system followed the principle of free choice or creation of the business name, however, providing that the name is unique and innovative, and not misleading. The concept of identity must be interpreted drawing from the purpose of the regulations which prohibit it, which is nothing more than avoiding any confusion caused by business names. Therefore, the concept of the identicalness of business names must not be interpreted as limited to the assumption of total and absolute coincidence between names, but it must be considered to be extended to what is called “quasi identicalness” or “substantial identicalness”, taking into account the coincidental elements which may be misleading regarding corporate identity such as objective, semantic, conceptual and phonetic convergence.
On the other hand, the DGRN clarified that the Spanish system prohibits the absolute or substantial identicalness of business names, but not similarity.
Bearing in mind the above, the DGRN argued that it seems logical to understand that the reasonable interpretation of regulatory criteria is that which allows one to detect those cases in which the differentiating characters or elements added or taken away from the registered business name do not destroy the sensation of similarity which may give rise to confusion.
Finally, the DGRN concluded that sufficient differentiating elements exist, both of a grammatical and phonetical type, which justify the consideration of the name applied for as a different name, which lead to upholding the appeal.
Mika Otomo
Vilá Abogados
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19th of January, 2018
