Change of corporate name : Notary Jesús Benavides

Change of corporate name

Step 1

What is a change of corporate name?

It is the notarial document through which a company modifies the name that identifies it and presents it to the market, such change must be publicized through its corresponding registration in the Mercantile Registry.

Step 3

How much does it cost to sign a corporate name change before a notary?

See indicative budget

This is a merely informative and non-binding estimate. This estimate is calculated based on two criteria: 1) our knowledge of the Notarial Tariff and 2) our daily experience in the preparation of this type of notarial document. (Royal Decree 1426/1989, November 17, 1989). and 2) our daily experience in the preparation of this type of notarial document. However, any variation (upward or downward) will be duly justified at the time of issuing the final invoice for the notarial service rendered.

Step 4

More frequently asked questions

What is the corporate name?

Broadly speaking, and using plain language, the corporate name is the "legal name" of the company, i.e., that which allows it to be identified, i.e., to individualize it from the rest of the companies operating in the market and, therefore, to distinguish it from the rest.

Thus, through this corporate name, the legal entity has its own unique identity, which allows it to be properly identified before the public administrations and before the suppliers and clients with whom it contracts.

Having said this, it is necessary to add that every capital company, when it is created, must have a corporate name, for the purposes described above, which cannot coincide with that of another pre-existing company (art. 7 LSC), and which must necessarily include the indication of the type of company in question (art. 6 LSC). Thus, in the case of a limited liability company, its name must necessarily include the indication of "Sociedad de Responsabilidad Limitada", "Sociedad Limitada" or its abbreviation "S.L." and in the case of corporations, the indication of "Sociedad Anónima" or its abbreviation "S.A.".

It is also essential to bear in mind that the corporate name must be included in the company's bylaws (art. 23 LSC).

In any case, and beyond the legal questions exposed, it is in my opinion very important that those interested in incorporating a company or in modifying its corporate name reflect deeply on it, since its determination can have a great influence on the future of their company. As it is known nowadays thanks to marketing studies, a good corporate name can contribute to the products or services of a company being widely known by its target public, which will contribute significantly to the increase of its turnover, while a bad name can hinder the company's day-to-day operations as well as its positioning in the market.

Therefore, as indicated, the corporate name of the company, beyond a legal issue, is undoubtedly a matter that is closely related to the field of marketing and market positioning, so that when choosing the desired name, it may be very appropriate to consult with branding specialists who can help and advise us to choose the name that can best help the company to position itself adequately in the market it operates.

What is the purpose of a change of corporate name?

As is logical, the circumstances surrounding the life cycle of a commercial company are changeable over time, so that the facts that motivated the designation of the company with a certain corporate name may be altered over the years and, therefore, make it advisable to modify or update it.

Thus, the start of new lines of business or the abandonment of others that have been exhausted may make a change of corporate name advisable in order to adequately align this name with the current reality of the company's economic and commercial activity.

Likewise, many other circumstances may make a change of name advisable, such as significant changes in the shareholding when the name is closely linked to the name of the previous owner (imagine here the classic company called "Hijos de Juan Pérez, S.L." if the company is sold to people outside that family), negative connotations of the words that make up the current composition of the company name, social changes that make it advisable to update the terms of the name to provide it with a more modern varnish, etc.

What issues should be taken into account when determining a company's corporate name?

Regarding the regulations that regulate in greater detail the corporate name of commercial companies, it is necessary to bring up the provisions of articles 398 and following of the Mercantile Registry Regulations.

Thus, the aforementioned regulation establishes, as basic principles, and as it can not be otherwise, that:

  • Corporations can only have one name, so it is not possible for a company to have two or more "legal" or official names.
  • That the corporate name must be unique and singular, so that it is not possible to assign to a company a corporate name identical to another pre-existing one, nor those with which there may be a great similarity or danger of confusion, as will be explained below.

Thus, starting from this basic principle, it is necessary to point out the following issues:

The corporate name must be formed by letters of the alphabet, in any of the official languages of the Spanish State. Likewise, if figures are to be included, this will be possible by means of Arabic numerals or Roman numerals.

Likewise, as regards the content of the name, the law determines that it may consist of a subjective name or company name, i.e., with the inclusion of the name of a person (for example, "Talleres mecánicos Juan Pérez, S.L.") or with an objective name, i.e., with a name that does not correspond to any person (for example, "Talleres mecánicos MACEL, S.L.").

  • On this basis, it is necessary to indicate that if a subjective denomination is chosen (i.e., including totally or partially the name of an identifiable person), this will only be possible if that person gives his consent, since, logically, it is not possible to use as the corporate name of a company the name of a natural person who has nothing to do with it (imagine how absurd it would be for a small family sports store in a neighborhood of Barcelona to have as its corporate name "Deportes Leo Messi, S.L.").
  • ~In any case, this consent shall be deemed to have been given if the name of the natural person chosen corresponds to a partner of the company.
  • ~Furthermore, if a subjective name is chosen for a shareholder, if the latter subsequently ceases to be a shareholder of the company, he shall not be entitled to demand the removal of his name from the company name, unless he has expressly reserved this right.
  • On the other hand, if an objective name is chosen, a name can be chosen that is related to the company's business activity (so that, for example, a motorcycle repair shop is called "Taller mecánico de motocicletas TOSA, S.L.") or, on the contrary, it is unrelated or, as the rule indicates, "fanciful" (so that, for example, the same motorcycle repair shop is called "El hada voladora, S.L.").
  • ~In this case, if a name is chosen that is related to the corporate purpose of the company (i.e., to the activity carried out by the company), it is necessary to indicate that it will not be possible to assign a corporate name to the company that is related to an activity unrelated to its corporate purpose (so that if, for example, we are talking about that mechanical workshop, it would be called "Bar Restaurante SUSJE, S.L.").
  • ~In addition, if a specific corporate purpose is included in the corporate name, the corporate purpose may not be modified in order to remove that activity from the corporate name, without simultaneously registering the change of corporate name.

That said, as already mentioned in a previous question, the corporate name must include a reference to the type of company in question. Thus, in the case of a limited liability company, the name must necessarily include the indication of "Sociedad de Responsabilidad Limitada", "Sociedad Limitada" or its abbreviation "S.L." and in the case of corporations, the indication of "Sociedad Anónima" or its abbreviation "S.A.".

<ejemplo>A modo de ejemplo, si alguien quiere llamar a su empresa “Talleres mecánicos Juan Pérez”, y se trata de una sociedad de responsabilidad limitada, deberá añadir a ese nombre la indicación de “Talleres mecánicos Juan Pérez, S.L.”.<ejemplo>

Furthermore, as it cannot be otherwise, the corporate name may not include expressions that are contrary to the law, public order or good customs, so that names that contain insults or expressions that are degrading or demeaning to third parties will not be admitted.

Finally, as has also been mentioned, the corporate name, as it must be unique, will not allow names containing terms or expressions that may lead to error or confusion in the commercial traffic about the identity of the company or entity (as for example would happen if part of the name of another company is used maliciously so that potential clients believe that it is part of that group of companies), nor will it allow the use of official names, such as the adjectives "national", "state" "public", etc., in order to avoid possible confusion about its corporate and private nature.

  • In this section, it is also necessary to state that in order to achieve the individualization of the denomination and avoid confusion with other pre-existing companies, denominations that are not allowed will not be allowed either:
  • ~Use the same words as those of pre-existing companies, but in a different order.
  • ~Use the same words as those of pre-existing companies, but add additional wording at the beginning or end to avoid exact match.
  • ~Use words that are different from those of pre-existing companies, but which have the same expression or are phonetically similar.

What other legal aspects should be taken into account?

It should also be taken into account that there are certain specific types of companies that can only be incorporated by companies that carry out a specific corporate purpose regulated by sectorial regulations that establish a series of additional requirements for the valid incorporation of a company in that field of activity.

This may be the case, for example, in financial credit institutions or insurance agencies or brokers.

Thus, the name of an ordinary capital company, i.e., a limited liability company or a corporation, may not include in its name references to this type of activities, in order to avoid that any person may fall into the error that such company is qualified to carry out that specific economic activity, when this is not the case.

How does the legal process for choosing a new corporate name work?

Once the interested party has a clear idea of what he/she wants the new name of his/her company to be, an application must be submitted to the Central Mercantile Registry, so that it can validate whether or not it is indeed possible to assign this desired name to the company, in view of the previous names of other companies and all the legal rules that have been explained in the previous question.

Therefore, if the chosen name complies with the requirements, the Central Mercantile Registrar will issue, within three days, a certificate stating that the name is not registered.

  • Please note that it is also possible to request up to three possible options for the corporate name, so that if all of them are available, the certification will state so, so that the interested party can finally choose the one he/she is most interested in.
  • On the other hand, if the denomination has already been previously registered or does not comply with any of the legal requirements, it will issue a refusal resolution, against which, if applicable, a governmental appeal may be filed.

Thus, once the aforementioned certification is issued, this will imply a temporary reservation of the requested name, so that during a period of six months, the name will be "frozen" or kept in favor of the interested party, while waiting for the corresponding deed of change of corporate name to be granted and registered in the Mercantile Registry, so that said name becomes the definitive and official name of the company.

  • On the other hand, if after six months from the issuance of the certificate the change of name has not been registered in the Commercial Registry, the registered name will expire, so that any other person may request to use it.
  • In any case, in addition to this time limit, it must be taken into account that the regulatory rule grants the certificate a validity period of three months from its date of issue, so that the deed of change of corporate name must be executed within this period, otherwise the document will expire and a new one must be requested.

In view of the above, once the interested party has its negative certification, it will be possible to execute the deed of change of corporate name, after which it will be registered in the Mercantile Registry so that the process is completed.

See more frequently asked questions

Can a deed be granted without negative certification of denomination?

No, because as indicated above, the rule determines that the deed of change of corporate name cannot be granted without providing the certification that such name has not been previously registered by another company, which, in addition, must be delivered to the notary to be notarized in the parent deed.

Likewise, as it cannot be otherwise, the deed of change of corporate name can only be granted if the name indicated in the deed coincides exactly with the one requested in the certification.

Finally, it should also be noted that, in relation to the certification, it must be presented in original form to the Notary (a photocopy is not valid) and that in the case of a change of name, the request can only be made by the company itself, so that if it is made by a different person, it will not be valid.

How can I execute a deed of change of corporate name?

In order to execute a deed of change of corporate name, it is only necessary to contact the notary's office (by calling the contact telephone number of the notary's office or at the e-mail address and make an appointment on the day and time most convenient for the grantors.

On the agreed date and time, the grantors must simply go to the notary's office with the necessary documentation (see section on necessary documentation) to sign the corresponding deed, which will be drafted based on the minimum legal content required and the forecasts and needs of the clients in question.

In any case, if the interested parties need assistance in relation to the models of certificates resulting from the adoption of the necessary corporate resolutions for the amendments to the bylaws to be dealt with, they can contact the notary's office for assistance and advice in this regard.

Who will have the authority to go to the Notary's office to sign the deed of change of corporate name?

Pursuant to Article 108 of the Mercantile Registry Regulations, regarding the persons empowered to notarize, the notarization of corporate resolutions adopted by the General or Special Meeting or by a collegiate administrative body, corresponds to the person empowered to certify them, which, by virtue of Article 109 of the aforementioned regulations, shall correspond, in relation to the minutes and resolutions of the collegiate bodies of mercantile companies:

  • In the event that the company is governed by a board of directors, the secretary and, if applicable, the deputy secretary of the board of directors, whether or not he/she is a director. The certifications will always be issued with the approval of the chairman or, if applicable, the vice-chairman of said body.
  • To the sole administrator, or to any of the joint administrators, when the company is governed by this type of administrative body.
  • To the administrators who have the power of attorney in the case of joint or joint administration.

In all these cases, it will be necessary that the persons issuing the certification have their position in force at the time of issuance, since in order to register the agreements contained in the certification, the position of the certifier must have been registered, previously or simultaneously.

And, in any case, as a formal matter, it will also be necessary to take into account that agreements that do not appear in approved and signed minutes or in notarized minutes may not be certified.

The decisions of the sole shareholder, recorded in the minutes under his signature or that of his representative, may be executed and formalized by the shareholder himself or by the directors of the company.

It may also be carried out by any of the members of the administrative body with a valid appointment and registered in the Mercantile Registry, when they have been expressly empowered to do so in the corporate deed or in the meeting in which the resolutions have been adopted.

When will I receive the delivery of my deed of change of corporate name?

If the interested party so desires, the authentic copy of the deed can be delivered to him/her on the same day of the signing, but in such case, he/she must go to the Commercial Registry to register it, since this is a necessary step for the agreed modification to be fully effective.

Can I entrust the notary's office with the registration of the deed in the Commercial Registry?

Of course, if so desired, it is possible to entrust this management to the notary's office itself, which will telematically send the deed to the Commercial Registry in order to obtain its registration.

Once this has already taken place, the authentic copy of the deed will be delivered to the grantors, which will be much more useful, since from that moment on the document will be able to have all its effects.

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Step 5

Where can I consult the applicable regulations?

Step 6

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