Guidelines in the Approval of Corporate and Partnership Names

September 7, 1977 GUIDELINES IN THE APPROVAL OF CORPORATE AND PARTNERSHIP NAMES In line with the policy of the Commission to safeguard public interest and to avoid future conflicts as to corporate and partnership names, the following guidelines are hereby adopted: a. The corporate name should contain the word "Corporation" or "Incorporated", while the partnership name should contain the word "Company"; b. The name must not tend to mislead or confuse the public; and must not contain such descriptive words as "excellent", "fair", "good", etc.; c. The name should not be similar to one already used by another corporation or partnership. If the proposed name contains a word similar to a word already used as part of the firm name or style of a registered company, the proposed name must contain two other words different from the name of the company already registered; d. If the name or surname of a person is used as part of a corporate name or style, the incorporators must have a basis for such name or surname. For instance, the name or surname may be that of one of the incorporators. If the name is that of another person, not an incorporator, the consent of said person or his heirs must be submitted; e. If the corporate name contains initials, an explanation must accompany the articles stating the meaning of the same and the relevance or reason for the use thereof; f. The use of the words "State", "Maharlika" and "Barangay" are prohibited since the same are reserved for the exclusive use of the government. The following statutory provisions which prohibit the use of certain words as part of the firm name or style of a corporation or partnership must likewise be, observed: 1. The word "National" cannot be used as part of the firm name or style of all corporations and partnerships; 2. The word "Finance" or "Financing" cannot be used as part of the firm name or style of a corporation or partnership not engaged in the financing business (R.A. 5980); 3. The use of the words "Engineer" and "Engineers" or "Architects" are prohibited to be used as part of the corporate name under R.A. 544 and R.A. 1582; 4. "Investment" cannot be used as part of the firm name if a corporation or partnership is not organized as an Investment Company (R.A. 2629) or an Investment House under P.D. 129. Incorporators or Partners are required to submit a written undertaking to change their partnership or corporate name in case there is another person, firm or entity with a prior right to the use of the said name or one similar to it. The Commission likewise reserves the right to require a corporation or partnership to change its name, in case there will later on appear a person or company with a prior right to the use of the said or identical name. cdlex For the information and guidance of all concerned. (SGD.) ANGEL L. LIMJOCO, JR. Chairman Securities and Exchange Commission MEMORANDUM OF AGREEMENT * KNOW ALL MEN BY THESE PRESENTS: This MEMORANDUM OF AGREEMENT made and entered into at Makati, Metro Manila, Philippines, this 2nd day of November, 1978 by and between: SECURITIES AND EXCHANGE COMMISSION, a government instrumentality and or entity duly constituted under and created pursuant to the laws of the Philippines, with principal office at Philcomcen Bldg., Ortigas Avenue, Pasig, Metro Manila, duly represented in this agreement by its Chairman, ANGEL L. LIMJOCO, JR., hereinafter called the SEC: prcd and BOARD OF INVESTMENTS, a government instrumentality or entity duly organized under and created pursuit to the laws of the Philippines, with principal office at Industry and Investment Bldg., Buendia Avenue Ext., Makati, Metro Manila, duly represented herein by the Chairman of its Board of Governors, VICENTE T. PATERNO, hereinafter called the BOI. WITNESSETH THAT: WHEREAS, both agencies recognize that the objectives of R.A. 5455, otherwise known as the Foreign Business Regulations Act, cannot be fully achieved without the coordinated efforts of both agencies; WHEREAS, both agencies also recognize that the mode of coordination if clearly spelled out, would not only greatly benefit the public transacting business with them but will enable both agencies to exercise better regulatory powers. NOW, THEREFORE, for and in consideration of the foregoing premises, BOI and SEC, through their respective heads, have agreed on the following: I. On Permitted Investment under Sec . 2 of R . A . 5455 A. That the SEC will not issue any Certificate of Registration of Articles of Incorporation where there are investments by foreign nationals not exceeding thirty (30%) percent of the subscribed capital stocks unless the applicant complies with the following requirements: 1. Proof of remittance of foreign exchange has been submitted if foreign currency will be remitted in; 2. Proof that the Filipino incorporators have the financial capability to invest the amount required to be fully paid; 3. Proof of Philippine citizenship in appropriate cases; and 4. BOI Form No. 504, duly accomplished, in duplicate has been submitted. B. Upon submission to the SEC of BOI Form No. 504 duly accomplished, the original copy shall thereafter be forwarded to the Foreign Business Section, PALD, Board of Investments for recording of the foreign investments. C. The same procedure shall likewise be followed with respect to domestic partnership under circumstances given in the foregoing. II. On Doing Business under Sec . 4 of R . A . 5455 A. Whenever a proposed corporation or partnership with foreign equity exceeding thirty (30%) percent of the subscribed capital stock or capital contribution as the case may be, except those proposing to engage in banking, applies for registration with the SEC, applicant should immediately be informed to first secure prior authority from the Board of Investments. B. The same requirement shall likewise be imposed whenever a foreign firm applies with the SEC for a license to do business in the Philippines to engage in any activity including religious activities. C. The SEC shall not pass upon any application for increase in the authorized capital of any domestic corporation more than thirty (30%) percent of the subscribed capital stock of which is owned by foreign nationals without first requiring the said corporation to secure prior authority from the Board of Investments. Done in Makati, Metro Manila, Philippines this 2nd day of November, 1978. SECURITIES & EXCHANGE COMMISSION By: (SGD.) ANGEL L. LIMJOCO, JR. Chairman BOARD OF INVESTMENTS BY: (SGD.) VICENTE T. PATERNO Chairman Footnotes * This Memo Agreement which implements the Omnibus Investments Code (P.D. 1789) as amended by B.P. Bilang 391 supersedes the Rule To Implement the Requirement of the Constitution and Other Laws that the Controlling Interest in Enterprises Engaged in the Exploitation of Natural Resources Shall Be Owned by Filipino Citizens dated February 28, 1967.