Atty. Estrelita G. Gacutan

November 14, 1991 Atty. Estrelita G. Gacutan Bautista Picaso Buyco Tan and Fider 8th Floor, Singapore Airlines Building 138 H. V. dela Costa Street, Salcedo Village, Makati, Metro Manila M a d a m : This refers to your letter of November 11, 1991 requesting that your client be allowed to use the corporate name "Dragon Transport Resources Inc." for a proposed "holding company". As stated, the Corporate and Legal Department questioned the use of the word "Transport" in the Corporate name because the corporation to be incorporated is a "holding company". However, you believe that the use of said corporate name can be justified by the fact that the proposed corporation is to be incorporated primarily as a holding company which will own shares or equity interest in a transportation company, a car leasing company, which will be subsequently organized by the former to be known as "NISSAN CAR LEASE (Philippines) INC.". Hence, your request. It cannot be denied that in using the word "Transport" there is the likelihood of the public being led to believe that the corporation is engaged in transportation business. However, a mere conjecture that confusion may result is not sufficient ground to prevent the adoption of corporate name bearing such word. The object of a corporate name is only to serve the purpose of identification and does not necessarily reflect the purpose of the corporation for which it was formed as a corporation may have several purposes different and distinct from that of its primary purpose. "Grants of power to corporation are contained in laws, charters and incorporation papers which are accessible to the public. Persons dealing with a corporation are bound to take notice of its charter, articles of incorporation and the laws of the state affecting its powers and are, therefore, presumed to have notice to the extent of those powers and are chargeable with knowledge of the limitations and restrictions thereon contained in its charter or governing statutes". (Fletcher Cyclopedia Corporations, Vol. 6, 1968 Edition, pp. 352-357). Thus, a person of ordinary caution and prudence, when he deals with a corporation, does not merely rely on its corporate name but exercises reasonable and careful scrutiny in finding the identity of the corporation with which he is dealing or intends to deal with . Moreover, since the proposed company will be incorporated primarily as a holding company which will own shares or equity interest in a car leasing company which will be subsequently organized and considering further that your client undertakes to cause the amendment of the Articles of Incorporation of Dragon Transport Resources, Inc. by removing the word "Transport" in its corporate name in the event that its subsidiary, the transport company, is not organized within 6 months from date of its incorporation, the use of such word can be justified. In view of the foregoing, your client may use the word "Transport" as part of the above-mentioned corporate name, provided, however, that it will specify in its articles of incorporation that it will hold, own or acquire equity interest in companies engaged in transportation business, and that there is no existing corporation bearing the same or similar name as that of the proposed corporation. llcd Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman