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Naming Your Enterprise: a Proposed Legislative Headache

The article with the title: “Naming Your Enterprise: a Proposed Legislative Headache”  written by Lawyer Tran Thanh Tung – Partner of Phuoc & Partners is published on Saigon Economic Times dated 7/8/2014.


Interestingly, this tradition may be making a comeback with respect to new regulations on the naming of enterprises. Why is this relevant and what relationship does an ancient taboo have with an enterprise’s name? The fact is the Ministry of Culture, Sports and Tourism has drafted a circular guiding the Law on the naming of enterprises (“Draft”)with several strict regulations giving entrepreneurs more headaches as they attempt to name their “other” children – their enterprises.

Although an article about enterprises, I want to start with an ancient Vietnamese tradition regarding the taboos for naming family members. According to this custom, within a family, children will be named so as to avoid sharing a name with their namesake or ancestors. The scope of this taboo depends on the family – some families avoid namesakes up to 3-4 generations, but there are those which oblige themselves to avoid namesakes up to 7-8 generations or longer. Therefore parents and grandparents are often left with a severe headache as they search for a good name for a new member in the family. This “naming taboo” has however increasingly lost relevance in today’s information society and many young people know little to nothing about it.

According to the 2005 Enterprise Law, there are certain prohibitions when naming an enterprise, such as not “using words and symbols that violate historical, cultural, and moral tradition and habits and customs of the nation”. Article 14.3 of Decree No. 43/2010/ND dated 15 April 2010 of the Government added a prohibition on the use of famous names to formulate an enterprise’s name; the intention of this draft is to guide Article 14.3.

Using a famous name equals . . . a violation of a historical tradition of the nation?

According to the Draft, when naming an enterprise, one case considered as a “violation of the historical tradition of the nation” is “using the same name of a famous person/s”. Yet it is not clear as to the reasons why; nowhere does the 2005Enterprise Law or Decree 43 state that naming enterprises after famous persons violates the historical tradition of the nation. In some respects enterprises named after a famous person can be considered a sign of respect; they may however be prohibited from offering goods and services which may be misleading or offensive to that famous person.

In the same vein, the Draft expands the scope of this prohibition to the names of historical characters deemed to promote anti-justice, hampering progress, invaders or sinners to the country and the people. However, the Draft does not define what anti-justice, hampering progress, invaders or sinners to the country and the people are.

One thing to be noted is that the 2005 Enterprise Law does create this famous name prohibition for enterprises – it is Decree 43. Not stopping there, the Draft further expands the prohibition to the names of “historical figures”. Historical figures is a concept not mentioned in Article 14.3 of Decree 43 or the Law on Enterprises. And the provision itself prohibiting the using of famous names in Decree No. 43/2010/NĐ is not quite reasonable. From the Law on Enterprises to the Decree 43 to the Draft, this tendency to narrow the scope of available names for enterprises can be observed. Article 14.3 of Decree No. 43/2010/NĐ, therefore, needs to be modified to fit within the spirit of the Law on Enterprises.

To comply with this Draft, the Ministry of Culture, Sports and Tourism could issue an official list of famous persons of Vietnam from ancient times until now, including the villains, anti-justice persons, persons hampering progress, and invaders or sinners to the country and the people. This list would certainly number in the several thousand or more names and enterprises would be required to expend the extra effort comparing this against their intended enterprise name – not so different from the taboos for naming family members.

Furthermore, such lists are inherently imprecise and there is a real fear that a list of famous persons or “infamous persons” will be heavily questioned and contested – what is a famous person? What make someone infamous? What is a sinner to the country and the people? Such a debate can be heated and endless as the evaluation of historical figures will depend on personal perspectives and values which change over time. The practical question is whether such debates are helpful to enterprises? In the eyes of entrepreneurs, these debates are futile as they are useless for their business.

Words such as “Killer with head festers” are also forbidden?

A very delicate section in Draft is the forbidding of the use of words that “cannot guarantee the purity of Vietnamese”, such as slang, vulgar language, language transfigured by the age (such as “killer with head festers”), lacking seriousness, or relate to gender, sexuality, obscenity, violence, pornography, depravity, thrill seeking, criminality, social evils, superstition, etc. It is quite easy to imagine then that business registration staff will have a very “fun” time of being regularly updated on slang, teenage language, etc. when dealing with business registration dossiers.

Take this example to see how such a rule would be implemented in the real world. Assuming the husband and wife, Mr. Trung and Ms. Tinh, plan to name their company “Trung Tinh Co., Ltd.”. If the business registration officers decide to play it “funny” by swapping the vowels and consonants of the two words, and make it “Tinh Trung Co., Ltd.” (Tinh Trung means sperm in English), they may also be forced to reject the dossiers, reasoning that the company name is not serious, obscene, depraved and pornographic. S what will happen? Business registration officers may have a legal basis but Mr. Trung and Ms. Tinh may sue the officers for defaming and sullying their company. What a predicament!

Immense ban

As in Article 1 of the Draft, the purpose of the Draft is the “guiding [of] the use of words and symbols violating historical, cultural, and moral tradition and habits and customs of the nation, and famous names to name enterprises”.

The Draft has five articles, two of which listing the naming prohibitions. However these two articles also add a provision in the form of “and other cases prescribed by law”. With this additional phrase, we cannot identify what the limit of a prohibition is and thus, evaluate the real necessity of the issuance of this Draft. The Draft seems to go against a crucial legal principle;  simply, prohibitions in law must be clear and transparent.

Applying the general criteria for evaluating a legal provision – transparency, consistency, soundness and feasibility – then the provisions in the Draft is hardly ready to be enacted. Therefore the Draft should be revised to include a clear list of prohibitions limiting the naming of enterprises. Otherwise if there is nothing substantive or reformative, other than to cause additional difficulty for entrepreneurs, for the best interests of enterprises, such additional provisions should not be promulgated in the Draft.

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