CPA: If You Are “Trading As” Do You Need To Change Your Name?
by Marlon Shevelew on 25/06/12 at 5:12 pm
3 comments
There has been much discussion around section 79 of the Consumer Protection Act 68 of 2008 (CPA). This is the section that is relevant to those South African businesses that use ‘trading as’ next to their registered names – for example “Greystone Trading 44 trading as Top Technology”.
Although not yet in force, this section provides that no one may carry on business, or enter into any transaction to supply goods or services to a consumer under any name other than:
a) the person’s full name in the case of an individual; or
b) the company’s registered name where it is a juristic person
unless such other name is registered in terms of section 80 of the CPA.
To put this differently, operating under a trade name is impermissible, without the formal registration of such trade name with the Company and Intellectual Property Commission (CIPC).
On its face, this may appear to be unproblematic, as some may think they can simply inform CIPC of their trade name, register it as such, and carry on business.
However, the problem lies in section 80 of the CPA, which provides that a trade name, in order to be registered:
a) may not be the same as, or confusingly similar to, the name of a registered company or close corporation, or a trademark that has been registered or for which an application for registration has been filed, or a foreign trademark that is well-known in South Africa; and
b) may not falsely suggest that the business is connected with any other person or entity, or with any state or organ of state, or is owned or managed by persons holding particular qualifications or by members of a regulated profession.
So, what’s the answer?
The problem is evident: Many companies have been using trade names for protracted periods, although many of these are similar to each other.
The question is therefore, how does one resolve a dispute about which party is entitled to the registration of the trade name, to the exclusion of other similar trade names?
In essence, on a proper reading of the CPA, no problem actually arises, as the requirement of registration does only apply to trade names which were in use prior to the commencement of section 79 of the CPA.
Item 5(3)(a) of Schedule 2 of the CPA states that the Consumer Commission may not take any action to enforce section 79(1) of the CPA at any time against a person for the use of a business name, if that person, among other things, was actively conducting business under that business name for a period of at least one year before the date on which section 79 took effect.
To sum up, the requirements in respect of trade names do not apply for businesses which have been existence for a while. These businesses may therefore continue to make use of their trade names without a requirement of registration.
Marlon Shevelew of Marlon Shevelew & Associates is a commercial and corporate attorney with a niche for Landlord and Tenant law in the residential, commercial, retail and industrial sectors. He also specializes in Commercial, Corporate, Contractual and Civil Law. View more articles by Marlon Shevelew.
Tags: consumer protection act, cpa, South Africa, south african business, south african law
Jan
Jun 27th, 2012
Marlon – thank you, this is a great article. Very helpful.
BJK
Jun 27th, 2012
I wonder how many people are blissfully ignorant of all the finer details hidden within the CPA…
Arno
Jun 29th, 2012
Why do the goverment want to make starting a business (even an informal business) so difficult? Don’t they know they are killing entrepreneurship and a big market that could help with economic growth?