Naming of a sole proprietorship plays an important role in the process of business registration, not only in helping an enterprise build its brand but also in distinguishing itself in the marketplace. However, to ensure legality and avoid confusion, the enterprise’s name must comply with the relevant legal provisions. The following article, presented by NPLaw, provides a detailed overview of the legal issues concerning the naming of sole proprietorships.
I. Overview of naming sole proprietorships
Naming a sole proprietorship is a crucial step in the business registration process, as it defines both the legal identity and the brand of the enterprise. According to the Law on Enterprise 2020, a company’s name must include two elements: the type of enterprise and its distinctive name, while also adhering to linguistic rules and avoiding duplication or confusion with other existing businesses.
Additionally, enterprises may register names in foreign languages or abbreviations, provided that such names comply with legal regulations. The business name must be displayed at the head office, branches, and representative offices, and used consistently on all transaction documents. These requirements ensure transparency and order in business operations, while also facilitating the enterprise’s commercial activities.
II. Legal provisions on naming sole proprietorships
1. What does naming a sole proprietorship mean?
Naming a sole proprietorship refers to the process of selecting and registering a lawful trade name in accordance with the Law on Enterprise 2020. The enterprise’s name must include the type of enterprise and a distinctive name, which may be written using Vietnamese alphabetic characters, the letters F, J, Z, W, numerals, and symbols.
2. How is the naming of sole proprietorships regulated by law?
According to Article 37 of the Law on Enterprise 2020, the name of an enterprise must comprise two elements:
- The type of enterprise; and
- The distinctive name.
The distinctive name must be written using letters of the Vietnamese alphabet, the letters F, J, Z, W, numerals, and symbols.
The name must not duplicate or cause confusion with names of enterprises already registered under Article 41 of the Law, and must not contain names of State agencies, socio-political organizations, or words contrary to social ethics or national traditions under Article 38.
If the enterprise name is in a foreign language, it must be a translation of the Vietnamese name and printed in smaller font size than the Vietnamese name at the head office and on transaction documents. The enterprise’s name must be displayed at its head office, branches, and representative offices, and appear on all documents, contracts, and publications issued by the enterprise.
3. Is it permissible to use Chinese characters to name sole proprietorships?
Under Article 37 of the Law on Enterprise 2020, an enterprise name must include the type of enterprise and the distinctive name. The distinctive name may only use letters of the Vietnamese alphabet, the letters F, J, Z, W, numerals, and symbols.
Furthermore, Article 38 prohibits enterprises from using names identical or confusingly similar to those already registered, as well as names of State agencies, socio-political organizations, or armed forces units without consent. It also prohibits the use of words or symbols violating public morality or cultural traditions.
Therefore, the name of sole proprietorships may not be written in Chinese characters, as the law restricts the use of characters outside the Vietnamese alphabet (except F, J, Z, W).
III. Common questions regarding the naming of sole proprietorships
1. What cases are considered confusingly similar to other sole proprietorships?
According to Clause 2, Article 41 of the Law on Enterprise 2020, a sole proprietorship’s name will be deemed confusingly similar to another if it falls into one of the following categories:
- The name is pronounced the same as one of another enterprise, regardless of spelling differences;
- The abbreviation matches the abbreviation of another registered enterprise;
- The foreign-language name matches one of another registered enterprise;
- The distinctive name differs only by a number or a single letter;
- The distinctive name differs only by symbols such as “&”, “and”, “.”, “,”, “+”, “-”, “_”;
- The distinctive name differs only by the prefix “Tan” (meaning “New”) or “Moi” (“New”);
- The distinctive name differs only by a regional phrase such as “Northern”, “Southern”, or “Central”;
- The distinctive name is identical to the distinctive name of another registered enterprise.
Thus, any of the above circumstances are considered confusing similarities. When naming a sole proprietorship, the owner must carefully check to ensure the chosen name is neither identical to nor confusing with existing enterprises.
2. May the owner name the sole proprietorship in a foreign language?
Under Clauses 1 and 2, Article 39 of the Law on Enterprise 2020, the owner may name the sole proprietorship entirely in a foreign language, provided that:
- The foreign-language name is translated from the Vietnamese name into a language using the Latin alphabet. The distinctive part of the name may be retained or translated with a corresponding meaning;
- The foreign-language name must be printed or written in smaller font size than the Vietnamese name at the head office, branches, representative offices, business locations, and on transaction documents, records, and publications of the enterprise.
Accordingly, sole proprietorships may use a foreign-language name translated from the Vietnamese version into a Latin-based language. The distinctive part of the name may remain unchanged or be translated, but the foreign-language version must always appear smaller than the Vietnamese name on signs and documents.
3. Can a sole proprietorship be named after a geographic location or an individual?
Under Article 37 of the Law on Enterprise 2020, the Vietnamese name of an enterprise includes two elements: the type of enterprise and the distinctive name. The distinctive name may contain a geographic location or an individual’s name, provided it complies with legal provisions.
However, pursuant to Articles 38 and 41, the name must also ensure that it:
- Is not identical or confusingly similar to existing enterprise names;
- Does not violate public morality or social ethics;
- Does not use the names of State agencies or socio-political organizations without authorization.
Therefore, using a geographic name or a personal name for sole proprietorship is permissible, but the naming must fully comply with the legal requirements on enterprise names.
4. Can sole proprietorships change their names after registration?
A sole proprietorship may change its name after registration, provided that the procedure complies with the law. Under Article 41 of the Law on Enterprise 2020, enterprises have the right to change their names but must ensure a new name is not identical or confusingly similar to existing ones.
According to Article 48 of Decree No. 01/2021/NĐ-CP, to change the name, the enterprise must submit a dossier including:
- A notice of change of enterprise name;
- The original enterprise registration certificate; and
- The legal documents of the owner of the sole proprietorship.
The dossier must be submitted to the Business Registration Office under the Department of Planning and Investment where the enterprise is headquartered. Thus, the sole proprietorship may change its name post-registration, provided it fulfills all legal procedures, avoids duplication, and updates relevant information accordingly.
5. Are there regulations on the minimum or maximum length of sole proprietorships’ names?
Vietnamese law does not stipulate specific limits on the minimum or maximum length of a sole proprietorship’s name. However, under Article 37 of the Law on Enterprise 2020, the name must comply with general naming principles.
Although there is no character limit, overly long names may be impractical for use on documents, invoices, or signage, while excessively short names may be rejected for lacking distinctiveness. Hence, enterprises should choose clear, easily recognizable names that are neither too long nor too short to ensure convenience in business operations.
Therefore, while no specific length requirement exists, a well-structured, distinctive, and easily readable name is recommended for practical and legal effectiveness.
IV. Legal consultancy services regarding naming sole proprietorships
The above article by Ngoc Phu Law Company Limited (NPLaw) provides legal guidance on naming sole proprietorships. With a team of experienced lawyers and legal specialists, NPLaw is ready to accompany, advise, and support clients on all legal matters related to enterprise naming. For assistance with other legal issues, please contact NPLaw for professional consultation and timely support.
