Re : Corporate Name

April 26, 2004 SEC OPINION NO. 65-A-04 Re : Corporate Name Atty. Jose Pacis Flores Platon Martinez Flores San Pedro & Leao 6th floor Tuscan Building., 114 Herrera St., Legaspi Village Makati City S i r : This refers to your letter dated 18 December 2003 requesting reconsideration of the denial by the SEC General Counsel of the application of your client Sandvik Tamrock (Philippines), Inc. to change its name to "Sandvik Mining & Construction Philippines, Inc." Considering that Sandvik Tamrock (Philippines), Inc. is a trading company, primarily engaged in the selling of mining and construction equipments, on 20 November 2003 the General Counsel denied your request on the ground that your client's proposed corporate name "can cause confusion in the eyes of the public as well as in the business activities of companies actually engaged in mining and construction activities." However, "to obviate confusion it is suggested that the word Equipment be inserted in the proposed amendment to the corporate name of Sandvik Tamrock (Philippines), Inc. thereby changing the same to Sandvik Mining and Construction Equipment Philippines. Inc." On the contrary, you stated in your letter that "Sandvik Tamrock (Philippines), Inc" had to change its present corporate name pursuant to instructions from its parent corporation and that being 100% foreign-owned, Sanvik Tamrock (Philippines), Inc. cannot legally engage in mining operations in the Philippines where the development, exploitation and utilization of natural resources is reserved to citizens of the Philippines or to corporations at least 60% owned and controlled by Filipinos. 1 Further, you also mentioned that deception or confusion of the general public is not likely to occur. Hence, this letter-request for reconsideration. We do not agree. A corporate name cannot contain any word or phrase that indicates or implies that it is organized for any purpose other than one or more of the purposes in its articles of incorporation. 2 In addition, SEC Memorandum Circular No. 14 states: "2. Terms descriptive of a business in the name shall be indicative of the primary purpose. If there are two (2) descriptive terms, the first shall refer to the primary purpose and the second shall refer to one of the secondary purposes." The primary purpose of Sandvik Tamrock (Philippines), Inc. is "to engage in the trading, marketing or general merchandise, at wholesale, servicing or remanufacturing of any and all kinds of equipment, goods, wares and merchandise" and not in the business of mining and construction. Should the Commission allow the use of the proposed corporate name "Sandvik Mining & Construction Philippines, Inc.," it may mislead the public to believe that it is in the business of mining and construction when in truth and in fact, it is in the business of trading and construction equipment. In the light of the foregoing, your request for reconsideration is hereby denied . cTCEIS Very truly yours, (SGD.) ERLINDA R. SAPERA Commission Secretary Footnotes 1. Constitution, Article XII, Sec. 2. 2. 18 A Am Jur 2d, p. 190