Mr. Ferdinand M. Mangahas

November 10, 2003 SEC OPINION NO. 59-03 Mr. Ferdinand M. Mangahas c/o 2/F Security Bank Bldg., No. 228 Ortigas Ave., San Juan, Metro Manila S i r : This refers to your letter dated 21 August 2003 inquiring whether a tertiary educational institution duly registered before the Commission is mandated to use a business and trade name other than the corporate name appearing in its articles of incorporation or can it use a preferred business name distinct from its corporate name. Save in cases that are contrary to public order or morals, or is liable to deceive trade circles or the public as to the nature of the enterprise identified by that name, 1 Philippine laws, including the Corporation Code, do not prohibit a corporation from using name different from its corporate name for the purpose of doing business thereunder. In the absence of such a prohibition, it seems to be universally recognized that a corporation may do business under an assumed name, or under a name different from its corporate name. Fletcher, a highly esteemed authority on the law of corporations, states the rule as follows: ICAcHE "A corporation, when it comes into existence, acquires a legal name by which it is known and identified, and by which in general it contracts and acts. Strictly speaking, this name is the only legal name which it can have, unless, of course, such name is subsequently changed by the state or under authority from the name given by its charter, it may acquire other names by use or reputation. Of course it cannot by usage or prescription acquire a legal name other than that conferred upon it by law, and a corporation cannot, except as authorized by law, change its own name, either directly or by user. "This legal name and title which the law confers upon a corporation is the one which it should use. It may not, without authority of law express or implied, use any other name, particularly where the statute directly prohibits corporations from transacting any business under any other or different name than that conferred upon them by their articles of incorporation, But, however desirable it may be that a corporation act and contract in its true legal name, this is not always done . . . a corporation may contract, acquire rights or incur obligations in a fictitious or trade name, like an individual, a corporation may assume a name other than its legal name and carry on business under such assumed name." 2 It has even been held that the rule that a corporation must engage in business only under its proper corporate name, and may not lawfully transact business under an assumed or fictitious name, does not make it illegal for a corporation to use a trade name, or what may be described as colloquial or nickname, or abbreviated name. 3 In other words, a duly registered corporation may adopt a trade name different from its name appearing in the articles of incorporation, and do business under such a business name or trade name, subject to the rules and regulations implemented by the Commission on Higher Education, and other concerned government agencies in charge therein. Provided further, that this is done in good faith and not for the purpose of misleading the public or for any other unlawful purpose. HCATEa Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel Footnotes 1. Sec. 165.1, Republic Act 8293 otherwise known as the Intellectual Property Code. 2. (Fletcher, Cyclopedia of the law of Private Corporations, Vol. 6, par. 2442, pp. 8789; to the same effect is Theopson, Commentaries on the Law of Private Corporations, Vol. 1, (2d. ed.),par. 55, p. 57; 56 A.L.R. 450; and 14 C.J.,Sec. 371, p. 308). 3. In Great Atlantic & Pacific Ten Co. v. A. & P. Radio Stores, Inc. 20 F. Supp. 703.