Regulations Update: Business Names Law Implementing Rules

The Department of Trade and Industry (DTI) issued Administrative Order No. 10-03, Series of 2010 on April 10, 2010, entitled Revised Implementing Rules and Regulations of Act. No. 3883, as amended, otherwise known as the Business Name Law. This regulation is an amendment of an administrative order earlier issued by the DTI on February 8, 2010 on the same subject matter.

The Business Name Law was passed in 1931 and makes it unlawful for any person to use or sign on any written or printed receipt, agreement or business transaction, any name used in connection with his business, other than his true name, or exhibit in plain view in the place of his business any sign announcing his firm name or business name, without first registering such other name, firm name or business name with the then Bureau of Commerce (now the DTI). A violation of the law may subject the guilty person to a fine of between P50 to P200, or imprisonment of 20 days to three months, or both.

The Implementing Rules issued in February (the “February Implementing Rules”) clarified that only natural persons doing business or proposing to do business using a business name as defined in the Implementing Rules are covered. Juridical persons such as corporations or partnerships, which use the same name as that registered with the government agency mandated to register names, are not covered. Thus, if a corporation or partnership already registered with the Securities and Exchange Commission (SEC) will use the same name as that registered with the SEC, that corporation or partnership need not register under the Business Name Law and its implementing rules.

Among the significant amendments introduced by the February Implementing Rules is the acceptance of online application by accessing the BN Registration System website and filling-up the web-based application form. Payment of the registration fee may be done through an accredited bank or to the field office of the DTI. Upon confirmation of compliance by the applicant with the necessary requirements, which may be submitted online, the business name certificate shall be issued. Such certificate may be sent by courier or downloaded electronically.

The February Implementing Rules also recognized the right of the public to access information subject to certain rules. For instance, reasonable verbal queries pertaining to information in the business name registration database may be given at no cost. However, requests for affirmative or negative certifications may be granted only upon written request and payment of the prescribed fees.

The revised Implementing Rules issued last April amended certain provisions of the February Implementing Rules, such as that the applicant for a business name must be at least 18 years old (instead of 21) and that the original application must be filed within six months before the commencement of the applicant’s business operations instead of just one month before commencement of business operations.