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Firm name of the limited liability partnership

 

 The trade name of an LLP allows it to be distinguished from other legal entities. It consists of at least two parts: an indication of the legal form of organisation (i.e. “limited liability partnership” or “LLP”) and the name (e.g. “Independent Legal Partnership”).

 In some cases the legislation obliges to specify additional information in the firm name of an LLP. For example, clause 2 of article 3 of the Law of RK “On Credit Partnerships” or clause 2 of article 3 of the Law “On Collection Activities” stipulates that the name of a credit partnership must contain the words “credit partnership”. 2, Article 3, Clause 2 of the Law “On Collection Activity” stipulates that the name of a credit partnership must contain the words “credit partnership”, while the name of a collection agency must obligatory contain the words “collection agency”.

 In the name of the partnership it is not allowed to use names that contradict the requirements of legislation or norms of public morality; own names of persons, if they do not coincide with the name of the participants or if the participants have not received the permission of these persons (their heirs) to use their own name. It is prohibited to use in company names of partnerships indications to the official names of state bodies of the Republic of Kazakhstan established by legislative acts, acts of the President and the Government of the Republic of Kazakhstan.

 The possibility of identifying the contradiction of the names used in the corporate names of LLPs with the norms of public morality is based on a purely subjective assessment. Thus, for example, the question whether the names “Limited Liability Partnership “Kazakhstan Strip Bar” or “…gay club” or “…playboy” would be immoral cannot be answered unequivocally.

 The ban on the use of references to the official names of state bodies of the Republic of Kazakhstan also raises a number of questions. Thus, there is a known case when the words “Cabinet of Ministers of the Republic of Kazakhstan” were used in the constituent documents of a commercial organisation. It seems that a literal interpretation of the current legislation does not allow us to speak about the need to refuse state registration on this ground, since currently the highest executive body of our country is called “the Government of the Republic of Kazakhstan”.

 In practice, it is not uncommon to find provisions such as the following in the constituent documents:

“Name of the partnership:

– in Russian: «ТОО «Встреча»;

 – in Kazakh: «Кездесу» ЖШС»;

 – in English: «Meeting Ltd».

 This is inadmissible and the registration authorities should refuse state registration, since in fact in such cases three different names are involved.

Also according to the provision established by part two of article 19 of the Law of RK from July 1, 1997 № 151-I “About languages in the Republic of Kazakhstan”, according to which the names of joint, foreign organisations should be given with transliteration in the state and Russian languages.

 “Name of foreign-owned partnership:

 – in Russian: «ТОО «Legal» (Легал);

 – in Kazakh:«Legal» (Легал) ЖШС»;

 – in English: «Legal» (Легал) Ltd.

 The Partnership has the exclusive right to use its trade name. A person who unlawfully uses another person’s trade name shall be obliged to stop using such name and compensate for the losses incurred at the request of the owner.

 The lawful use of someone else’s trade name should be understood as such use, which is carried out by the entrepreneur with the consent of the right holder. For example, under a franchising agreement, a complex licensor may grant a complex licensee the right to use its name (the so-called “brand”). A similar situation arises when the right to use such a “brand” is made as a contribution to the authorised capital.

 Neither science nor practice has so far developed unified approaches to resolving disputes over the priority right to use a firm name in cases where legal entities have the same name but different organisational and legal forms (for example, “Independent Legal Partnership” and “Independent Legal Partnership”).

 It seems that in the resolution of such disputes one or another position should be justified using clause 3 of Art. 3 of Article 1020 of the Civil Code, according to which a firm name similar to the firm name of an already registered legal entity may not be used to such an extent that it may lead to identification of the respective legal entities, as well as misleading regarding the goods produced or services rendered by them.

 As we can see, the Code proposes to base the solution of this issue on the sectoral principle of division of goods produced by entrepreneurs or services rendered by them.

 Legislation does not require to indicate in the name of a partnership with participation of foreign capital the state affiliation of its participants. Thus, the use, for example, of the words “joint Kazakh-Russian partnership” is a right, not an obligation of the participants.

A change in the firm name of the partnership entails its state re-registration in accordance with the procedure established by law.