In the vernacular, the company itself is regularly called a company. Actually, the company is only the name of the company. You therefore have to think about the company when starting the company. However, some principles must be observed. These are described below.

Legally, the company is defined in § 17 (1) HGB. Accordingly, it is the name under which the merchant operates his commercial business. It is therefore only the name of the commercial business and not the company itself. Colloquially, however, the term erroneously regularly means the company as such.

In the case of an individual merchant, the company stands next to the legal name of the merchant. He therefore carries two different names, should the company deviate from his civil name. In trade, the company replaces the civil name. Outside trade, the merchant continues to act under his civil name. Commercial companies, on the other hand, have only one name and that is the company. The company is inextricably linked to the company. It cannot therefore be sold independently.

If you want to name your company, there are some principles to consider when building a company. The company is supposed to individualize the owner of the company and protect legal traffic.

Therefore, the company must correctly indicate the company owner and must not mislead about him. Consequently, it must be suitable for identification and possess distinctive character, so-called principle of company distinctness (§ 18 (1) HGB).

Accordingly, the company must be able to serve as a name for a company at all. Therefore, the company core and the company addition must be literally designated, so that graphic symbols alone are not sufficient. They can only be used as additional signs.

A company has distinctive power if it can distinguish the commercial industry from other companies and individualize the company in this way. For this reason, designations that exclusively describe the object of the company – such as “supermarket” – are not permitted. In addition, these must not be terms for which there is a need for freedom. This exists if the general public or even competitors need the envisaged company for unhindered use in business transactions. Even concepts, which in everyday language are always understood by traffic and only in their original sense and not as a means of distinction, lack the distinctive power. There is little discernment if the concepts are not understood exclusively in their literal sense.

On the other hand, there is a risk of confusion if the company cores coincide and only different legal form additions are added. For this reason, it is not enough to cite the addition “Co. KG” of the company for GmbH & Co. KG alone and otherwise to retain the company of Komplementär-GmbH. The core of the GmbH & Co. KG must therefore be different from the Komplementär GmbH.

According to the principle of company truth, the company may not contain any misleading information in accordance with § 18 (2) HGB that is likely to mislead about business relationships that are essential for the mentioned public.

Information is verifiable statements. It is often necessary to determine by interpretation which information the company provides. Only rarely does it itself contain specific information. The information is inadmissible if it is suitable for misleading the mentioned public. This is the case if they cause a misconception about the statement of the company in a not insignificant part of the mentioned public. In doing so, however, the registry court only recognizes an obvious suitability for misleading as inadmissible. In addition, the misleading information must be essential for the concerned public. This prevents even a mere misleading about insignificant or incidental business relationships from being inadmissible. In order to assess the materiality, the view of the average member of the group of persons concerned should be taken into account when assessing the materiality wisely.

In addition, the company must contain a legal form addition. This must correctly reflect the company and liability relationships.

An originally permitted company, which has now become inadmissible, may remain in certain cases. The reason for this is that the company can be a significant asset, which the company owner should also retain when the company changes. Changes may result, for example, from name changes as a result of marriage or legal succession. In the case of a voluntary departure of a shareholder whose name is contained in the company, the express consent to the continuation of the company is required in accordance with § 24 (2) HGB.

The merchant may only lead one company for the same company in order to avoid deceptions in legal transactions. However, there are exceptions in which the sole trader may appear among different. This is possible if the merchant operates several companies that are organisationally separate and independent. However, this separation does not usually exist if the companies belong to the same business group. A further exception to the principle of the company unit exists if the merchant acquires another commercial business and continues under its old company. However, companies must remain separate. If, on the other hand, the new company is combined with the previous one, the continuation of several companies is inadmissible. However, the management of two different companies does not mean that the entrepreneur leads two different legal entities. It is still a legal entity which is managed only under two special designations of different assets.

In contrast, partnerships and corporations may, in the prevailing opinion, only manage a single company, even if they operate several independent companies.

Branches may have an independent company. However, it must also mention the company of the main establishment and make it clear that it is a branch.

The company must also be publicly announced. This is ensured in particular by the entry in the commercial register. In addition, the business letters must indicate the company, as well as the legal form addition, the place of commercial establishment, the register court and the commercial register number.

Commercial Law and Company Law