Company names - How different do companies need to be?

In Germany, the name of a company is referred to as “Firma” (firm). It must be clearly distinguishable from the names of other companies. It is not sufficient for two companies to differ by individual vowels if they otherwise consist of the same or similar words. This has been decided by the Berlin Court of Appeal (Kammergericht, “KG”) dated May 17, 2024 (22 W 10/24).

Facts of the case

The decision of the KG Berlin is based on the following facts: In June 2023, a limited liability company (GmbH) was founded under the name “Pex Logistik GmbH”. The managing director applied to the registry court for its entry into the commercial register. However, the company “Pax Logistics GmbH” was already registered in the same. According to the registry court, the entry of “Pex Logistik GmbH” was therefore prevented by the provision of Section 30 of the German Commercial Code (HGB). Section 30 HGB provides - in short - that every new company must be clearly distinguishable from companies already registered and existent in the same municipality. The registry court therefore rejected the managing director's application. With the appeal against the decision of the register court at the KG Berlin, the GmbH in formation (GmbH i.G.) is seeking the annulment of the register decision and entry in the commercial register.

Reasons for the decision

The KG Berlin dismissed the appeal of the GmbH i.G. as being unfounded. The court shared the opinion of the registry court. The companies could not be distinguished clearly enough from each other.

The KG Berlin stated that the term “Logistik” of the newly founded GmbH differed linguistically from the term “Logistics” of the already registered company. However, the words were almost identical in terms of sound and content. The additions “Pex” and “Pax” also consisted of the same number of letters and only differed by one vowel. The names of the companies would also both begin with the same suffixes. Finally, the companies are active in similar business areas.

These circumstances would run counter to the protective purpose of Section 30 para. 1 HGB. The same includes public interests and the protection of business transactions. The latter should not be exposed to the risk of confusion between two companies.

Even if the already registered company agrees to the registration of the new company name, such agreement is not relevant. The protective purpose of Section 30 para.1 HGB cannot be waived.

Practical information

Company founders are recommended to check the commercial register for similar companies or companies with the same name before submitting an application for registration. On the one hand, this advice is based on the corporate law explanations as described above. On the other hand, aspects of trademark law must also be taken into account: If the already registered company has had its name protected under trademark law, it may not be used by another company.

In general, the company name should also be chosen carefully: After all, the company appears in business dealings under the company name in the long term. Companies are therefore recommended to protect their own company name under trademark law.

Finally, it should be noted that the decision is likely to apply to both partnerships and corporations. In principle, the commercial register covers both types of company in its scope of application. The above recommendations therefore apply equally to both types of company.