In France, a commercial company must be designated by a corporate name, which is written into its articles of association.
The corporate name of the company is freely chosen by the shareholders. The corporate name may be related to the company’s purpose, it may include the first or last name of one or more shareholders, or it may be a fancy name.
In a decision dated April 19, 1974, the Paris Court of Appeal ruled that if the company name uses the name of a third party, the company risks being sued on the basis of civil liability, if such use causes confusion and harms such third party.
In a decision of March 12, 1985 (Bordas), the French Supreme Court (Cour de Cassation) decided that, if a company uses the name of one of its shareholders as its corporate name, then this name must be considered to be detached from the natural person and to become an intangible property right for the business. Thus, if the shareholder withdraws from the company, he/she cannot in principle require the company to change its corporate name.
The corporate name of a company in France must be immediately preceded or followed by an indication of the form of the company and, if it is a joint stock company or a limited liability company, the amount of its share capital.
The corporate name must be distinguished from a trade name. The trade name is used to designate the company’s business, in order to identify it in its relations with customers. A company can only have one corporate name, but it can have multiple trade names.
A trade name must also be distinguished from a sign, which is any inscription, shape or image affixed to a building and relating to an activity carried on therein by the company.
The name of a French company must not contravene to public policy, good morals or legal requirements. It is therefore not possible to choose a name referring to a regulated activity if the company does not meet the conditions required to carry on such activity. Thus, for example, it is forbidden for any company other than a credit institution to use a name that gives the impression that it is authorized as a credit institution, or to create confusion in this regard.
The corporate name must allow the company to be individualized and distinguished from other companies. The corporate name must therefore have a distinctive character. Consequently, the corporate name must not be limited to indicating the activity of the company in a usual or descriptive way.
Furthermore, the chosen corporate name must not have been registered by a third party as a trademark for identical or similar products or services that the company intends to market, or as a corporate name or domain name. In such cases, it is necessary to analyze precisely whether the chosen corporate name may infringe on the prior rights of third parties. Alternatively, the shareholders and the company may be held liable for infringement of third party intellectual property rights or unfair competition.
The choice of the corporate name of a company in France is not definitive. The company name can always be changed by a decision of the shareholders. The new company name must be reflected in the articles of association, which must be amended, and published on Infogreffe.
