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Initial situation and problem statement
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In legal and commercial dealings, company names must be unambiguous and must not mislead third parties about material circumstances. In practice, the question repeatedly arises whether using a person’s name as the company name can be misleading when the entrepreneur who gave the name has been dead for a long time. The Higher Regional Court (OLG) of Düsseldorf addressed this constellation in its decision of 14/06/2018 (Case No. I-3 Wx 81/16).
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Decision of the OLG Düsseldorf of 14/06/2018 (Case No. I-3 Wx 81/16)
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Subject matter of the proceedings
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The subject of the proceedings was the register-law assessment of a company name that bore the name of the original founder of the business even though he had long since died. At its core, the issue was whether, for this reason, the company name should be regarded as misleading and therefore objectionable under register law.
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Standard: Prohibition of deception in company-name law
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For the assessment, it is decisive whether the chosen company name is capable of creating incorrect impressions among the relevant circles of the public about commercially significant circumstances. The focus is not on every theoretically conceivable misconception, but on a relevant misdirection that can carry weight in commercial dealings. The register-law review thus ties in with the question of whether there is an impairment of the protectable public interest in the clarity and truthfulness of company information.
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Core statement: The founder’s name is not per se impermissible despite the passage of a long time
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The OLG Düsseldorf did not consider the mere use of the name of a founder who has long been deceased to be automatically misleading. Decisive was that the use of the name alone does not necessarily compel the conclusion that the name bearer is still personally involved in the business or stands for a current management and/or ownership position. According to the standard applied, deception requires a sufficiently significant risk of deception; in the court’s assessment, this did not already result merely from the fact that the person who gave the name had died.
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Significance for company-name practice
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Continuity of the company name and public perception
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The decision illustrates that personal names in company names are often also understood as a sign of business continuity. A continued name-based company may be perceived in commerce as an indication of origin, tradition, or continuation of the business, without this necessarily being linked to a statement about the name bearer’s personal presence.
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Limits of what is permissible
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This does not affect the fact that, in its specific design, a company name may still be open to objection in an individual case if additional circumstances suggest a misconception or if the company name as a whole conveys an incorrect business statement. The decision thus leaves room for a case-by-case assessment based on the respectively decisive understanding of the relevant circles of the public.
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Classification from the perspective of MTR Legal attorneys-at-law
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The OLG Düsseldorf’s decision shows that the register-law assessment of company names is strongly shaped by the specific public perception and the weight of a possible misconception. When designing, continuing, or changing company names, companies, investors, and high-net-worth private individuals are regularly confronted with interfaces with requirements under commercial and corporate law. Anyone needing clarification on this can contact MTR Legal for professional support; further information can be found via the link Legal advice in commercial law.
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Source: OLG Düsseldorf, decision of 14/06/2018, Case No. I-3 Wx 81/16, published inter alia on urteile.news (accessed: 14/06/2018).
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