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Thread: Sole Prop naming issues

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    Sole Prop naming issues

    With the new companies act now well and truly running, what is the legal status of a sole prop.
    For Example, someone registered a company with name xyz. now a sole prop that opened his business a year before with the same name wants to challenge this business owner.
    What are the legal points on this?
    Kind regards,
    Marius du Plessis

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    My guess of an answer is:

    (a) Don't think the new companies act changes this in any way from before especially as the sole prop is not a company. Its actually the Consumer Protection Act that covers trading names.
    (b) It becomes a "trademark" issue and depends on when the sole prop started using the trading name - before or after the new CPA. If its recent then there appears to be very little protection for a trading name unless it is registered with CIPC - in fact I don't even think you can use them anymore. If however, the sole prop had the trading name for at least a year before the CPA came into effect, then he may have a stronger claim to the name.

    I suggest you take a closer look at the CPA for more guidance.

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    I recently registered a defensive name for a client, that was vaguely similar to a US based global company. Within weeks I received objection papers from a SA based law firm and eventually I had to sign an undertaking that I would not use nor renew the name.

    The CIPC are only able to compare names to registered names, defensively registered or otherwise. Use of a trading name that is the same or similar to a registered name is not under their control, but is a copyright issue and usually boils down to "birth right".

    The CPA attempted to control trading names by insisting that they be registered with CIPC, unless they were in use for at 12 months prior to the implementation of the Act. However it seems there were implementation issues and it is actually not in effect. See this pdf issued by Astrid Ludin on 5/6/2012. To my knowledge nothing has changed.
    2012_06_05_Registration_trading_names.pdf

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    What protection does a sole proprietor have if the sole proprietor only opened his bank account last year?
    Can he claim the name as his own?

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Taxempt View Post
    What protection does a sole proprietor have if the sole proprietor only opened his bank account last year?
    There's certainly no IP protection in that on its own.

    All other things being equal, my understanding is it really is a case of who started trading under the name first.
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member sterne.law@gmail.com's Avatar
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    You can register a trademark at anytime.
    If you register a name, that someone else is using, then that person my challenge the registration.
    Trademarks are protected in terms of legislation or the common law.
    The common law is the passing off and / or unfair competition.
    The issue is, can a customer be confused/deceived.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Bronze Member Beancounter's Avatar
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    If you can prove that you've been using the name for an extensive period of time, you should have no problem registering a defensive name with the CIPC.

    Proof would constitute invoices made out to your business, advertising in the name of your business and listings on pages that you can retrieve that go back a while.

    See the CIPC website to lodge a complaint against the new company using your name.

    Remember to renew your defensive name after 2 years.

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