Part 2 Chapter 2

Question 1

What are the specific obligations of traders?

Answer 1

1. Adopt a business name
2. Keep proper records of their commercial activity
3. Comply with registration obligations at the commercial register
4. Prepare the annual report and accounts
5. Other obligations

Question 2

What is a business name?

Answer 2

Commerce is carried out under a business name, it is mandatory for individuals and for commercial companies.
Exclusively of words, limitations in relation to expressions that can be part of business name, foreign words accepted. (No figurative elements).

Question 3

What are the types of business names?

Answer 3

1. Composed only of the name of one of one or more people.
2. Composed by an expression that indicates the branch of activity with or without fantasy expression
3. Composed by a mixture of the two previous types

Question 4

Can business names be the names of the sole traders?

Answer 4

Composed of full name or an abbreviation (in general one word is not enough). Expressions or abbreviations indicating academic degrees, professional qualifications or nobility titles, to which the trader is entitles to can be added before the name

Question 5

What are the fundamental principles applied to business names?

Answer 5

1. Principle of truth
2. Principle of novelty or exclusivity
3. Principle of capacity to distinguish
4. Unity Principle
5. Principle of lawfulness

Question 6

What does principle of truth entail?

Answer 6

Must be truthful, not misleading, in relation to identification, nature or activity of its holder.

Question 7

Meaning that what is accepted or not allowed due to the principle of truth?

Answer 7

1. Can include names of members/partners not of random people
2. No expressions, abbreviations misleading as to its legal nature
3. No elements that suggest activity different from those that are in fact carried out by the trader
4. Alteration of name within one year if one of the partners decides to stop being a partner, unless written consent is issued by partner that left.

Question 8

What does Principle of novelty and exclusivity entail?

Answer 8

Business names must be distinctive, not confusingly similar in relation to those already registered or licensed in the same exclusivity scope, even in cases where the law allows for the use of elements that are part of business names already registered or with the name or notoriously known orgs.

Question 9

Are commercial companies and civil companies entitled to the exclusive use of their name throughout the national territory?

Answer 9

Yes

Question 10

What if sole traders have the same civil names and use them to make their business names

Answer 10

Then since a sole trader cannot hold exclusive rights to those, individual traders can use their civil name as business name because they are entitled to it.
However, if a sole trader adds onto the business name with the addition of something not limited to a full or abbreviated civil name, they then have exclusive rights to its use from he date of the definitive registration and within the municipality where their main establishment is located.

Question 11

In what situations are business names not new?

Answer 11

When given the spelling of the words, phonetic effect of the expressions, core, or font used, may lead to the average public to not be able to distinguish between them and confuses them, taking one trader for another, or, even thought not confusing them, wrongly believe that they refer to distinct yet specifically related traders.

Question 12

What is the criteria for judgements on the distinction and inability for confusion or error of business names?

Answer 12

Taking into account the type of person, its domicile or headquarters, the affinity or closeness of the activities and the territorial scope thereof.
These are the elements part of an auxiliary criteria for the evaluation of a potential confusion.

Question 13

Is the Principle of novelty or exclusivity valid for non-competitors as well?

Answer 13

Yes, for example if two companies that perform different activities have similar business names and have their head office in the same street, it may lead to confusion, judgements on the distinction must also into account, trademarks, logotypes already registered.

Question 14

What is the Principle of capacity to distinguish

Answer 14

Business names, as distinctive signs of traders, exist to differentiate/to allow others to distinguish one trader from another.

Question 15

Requirements to fulfil the Principle of capacity to distinguish

Answer 15

No business names made up exclusively, of words in current use that allow identification or relate to activity, technique or product as well as toponyms and indications of geographical origin shall be accepted.

Question 16

What can be accepted by the Principle of capacity to distinguish?

Answer 16

Business names of the individual traders and the names of commercial companies that include the names of the partners do not raise problems as they have distinctive capacity. However, company names composed of fantasy expressions/descriptions of the economic activity, can face issues.

Question 17

What is the unity principle

Answer 17

Traders can have only one business name (except for sole traders that own individual limited liability establishments)

Question 18

What does the lawfulness principle stipulate?

Answer 18

Business names cannot include:
1. Expressions which are prohibited by law or offensive to morals
2. Expressions that disrespect freedom of ideological, political or religious choice
3. Expressions that disrespect or illegitimately appropriate national symbols, personalities, periods in time or institutions whose name or meaning is to be safeguarded for historical, patriotic, scientific, institutional, cultural or other reasons

Question 19

Means of protecting business names:

Answer 19

1. Right to the business name is guaranteed under art 62 RRNPC
2. Exclusive rights are granted with the final registration
3. Protection of the business name is guaranteed through preventive and repressive means.

Question 20

What does preventive means entail?

Answer 20

Issuance by the RNPC, of a certificate of admissibility of a name or denomination. In reality, this certificate constitutes a mere presumption of exclusivity
However, without this certificate it is not possible to incorporate a commercial company or to change the company name.

Question 21

What does mean of repression entail?

Answer 21

1. RNPC declares loss of the right to use business names or company names, notably for infringement of the principles of truth and novelty
2. Courts declare a commercial name null and void or revoke the exclusive rights
3. Trader whose registered name is abusively used by others, has right to:
   - Request author of the illegal use be prohibited from using it
   - Seek compensation for losses and damages
   - Initiate administrative offenses against the infringer

Question 22

How does one go about altering a business name or company name?

Answer 22

As long as principles of truth, novelty, exclusivity are respected, traders can change business name

Question 23

Transfer of a business name

Answer 23

It is possible but you must in addition to the name purchase the establishment it is linked to.

Question 24

Explain what keeping proper records of their commercial activity entails

Answer 24

Traders are under obligation to keep records of commercial activity as to keep the correspondence and all relevant documents for a period of 10 years.

Question 25

Commercial companies must keep what with formalities provided by law?

Answer 25

Minute books

Question 26

Why should traders record his/her commercial activity?

Answer 26

It can be used as evidence in disputes between traders in relation to facts concerning to their commerce

Question 27

Are a trader’s records confidential?

Answer 27

Yes, but with several exceptions

Question 28

Why do companies prepare the annual report and accounts

Answer 28

Legal reporting is particularly relevant in relation to commercial companies. the management must prepare and submit before the partners’ general meeting, annually (on the first three months of the following civil year). Management report and accounts for the financial year and the other accounting documents provided for in the law.

Question 29

How is legal reporting facilitated?

Answer 29

Through the use of IES, Simplified Business Information system. This system provides the means for companies to submit/share business information to public services, by using an entirely online/dematerialized procedure.

Question 30

Prior to IES what did companies have to do?

Answer 30

1. Deposit annual accounts and request the corresponding registration in paper, with the Commercial registry
2. Submit the annual accounting and tax statement before the Minisry of Finance
3. Provide annual accounting information to the national Statistics Institute, for statistical purposes
4. Provide annual accounting data to the Portuguese Central Bank

Question 31

Explain the compliance with the registration obligations at the commercial register.

Answer 31

Information registered at the Commercial register is public record, anyone can obtain information on the acts registered there, many are subject to registration are also subject to mandatory publication in the official gazette.

Question 32

What are the effects of the registration

Answer 32

The main effect of the registration is that it constitutes a necessary requirement for some acts to be effective against third parties.