Name of the company's branch - what should be the correct wording?
A prospering company, in order to achieve higher profits, often decides to expand its activities in the form of creating a new branch. Seemingly a minor issue, but quite important in practice, is its name. Can the name of the branch be freely determined by the entrepreneur himself? Are there any laws that regulate this issue?
Don't let your imagination run wild - the name of the branch is based on the law
Some of the entrepreneurs, when creating a branch, would like to use their creativity also when specifying its name. However, can they afford complete freedom? Well no. Fantasy should be kept in check, thanks to the provisions of the Civil Code. Article 436 states that: the name of the branch office of a legal person includes the full name of that person and the term "branch" with an indication of the locality in which the branch is located.Therefore, a company that is a branch of a legal person, e.g. a limited liability company or joint-stock company, should primarily consist of mandatory elements such as:
Therefore, the Civil Code does not explicitly provide for additional elements in the name of the branch, apart from those mentioned in the legal act.
The name of the branch with additional symbols
There are still ambiguous views as to whether the company's business name, apart from the obligatory elements of its name, may contain additional markings identifying the entrepreneur's branch. Most taxpayers believe that this practice is possible. Usually, however, it is not about adding "fancy" names, but about adding a term that will allow for a better identification of the unit - its more accurate characteristics. Therefore, a common practice is to use additional elements in the name that define the region in which the branch operates (provincial, municipal, district) or expressions in the form of adjectives indicating the subject differentiation of activities (service, commercial, transport). It also happens that companies add the order number I, II, III to the branches, which usually means the order in which new main activities related to the company are created and allows to distinguish between them.
The second group of entrepreneurs adopts a position that requires strict adherence to the provisions of the regulations and not to go beyond their limits. The Civil Code requires the full name of the company, additionally referred to as a "branch" with the city in which it is located. Despite the fact that the branch is organisationally, technically and financially separated, it does not have a separate legal entity. Therefore, according to some, it should only reflect the wording of the entrepreneur's company with an additional term referred to in the provisions of the Civil Code - "branch" and its seat.
Branch name approved by the court
Various positions as to the name of the company's branch are verified by the court by entering the branch into the National Court Register. In practice, if the name of a branch contains all the elements established by law, and additionally includes an individual term for the company, it is usually accepted by the judicial authorities. It is important that the name of the branch used does not mislead others.