Colombia: Company Names vs. Trade Names – Key Risks and Protection Strategies

INTRODUCTION

In the Colombian business environment, the company name and the trade name are frequently confused, despite serving distinct legal and commercial functions. The company name identifies the legal entity before the Chamber of Commerce and in formal legal acts, while the trade name functions as a distinctive sign in the marketplace.

Distinguishing between these concepts is essential to avoid contractual and registration risks and to design effective trademark and brand-protection strategies.

QUESTION 1: What is the difference between a company name and a trade name?

The company name is the legal name of the entity registered in the commercial registry of the Chamber of Commerce. It identifies the legal person in its articles of incorporation, contracts, invoices, and legal obligations.

Company names are subject to homonymy control, which prevents the registration of identical names already recorded in the registry. This control does not involve an assessment of likelihood of confusion. The scope of protection is therefore strictly corporate and registrational and does not, by itself, grant exclusivity as a distinctive sign in the market.

Company names are primarily governed by the Colombian Commercial Code, in particular Articles 110 and 126.

By contrast, the trade name identifies and distinguishes a business activity in the marketplace from competitors. Protection of a trade name arises from its real and effective use in commerce.

The deposit or declaration of the trade name before the Superintendence of Industry and Commerce (SIC), pursuant to Articles 190 et seq. of Andean Community Decision 486, does not create the right. Rather, it serves important functions of evidence, publicity, and market surveillance.

Once protected through use, a trade name may be enforced against identical or similar signs used in related economic activities. Its owner may, among other actions, file oppositions against later trademark applications, bring infringement or unfair competition claims, and request precautionary measures.

In practice, registration of a company name does not guarantee freedom to use the same designation in the market if it conflicts with an earlier trade name or a registered trademark.

A trade name may coexist with a different company name, provided there is no likelihood of confusion in the marketplace. Accordingly, prior clearance searches, alignment between naming and market strategy, and the deposit and monitoring of the trade name are strongly recommended to strengthen protection and avoid disputes.

QUESTION 2: How is effective protection of a trade name achieved, and what are the risks of relying solely on the company name?

Relying exclusively on registration of the company name carries significant risk. Registration in the commercial registry does not confer exclusivity in the market, meaning that a third party holding prior rights in a trade name or trademark may lawfully prevent use of the sign in advertising, signage, packaging, or digital platforms.

In trademark proceedings, oppositions may be filed based on earlier trade names used in related activities. This may force a costly rebranding exercise or significantly limit the scope of trademark protection.

Moreover, where use of a trade name is not properly documented, and no deposit or monitoring has been carried out before the SIC, it becomes more difficult to establish priority, territorial scope, and enforceable rights in the event of a dispute.

An effective protection strategy requires coordination between corporate identity and brand protection. Before selecting a name, businesses should conduct clearance searches for trade names and trademarks before the SIC, in addition to verifying homonymy through the Unified Business and Social Registry (RUES).

Where the name distinguishes goods or services, trademark registration should be sought in the relevant Nice classes. Consistency between the company name, trade name, and trademark is strongly advisable.

Protection should be complemented by active monitoring of similar applications, timely oppositions, and enforcement actions in cases of improper use. In summary, best practice integrates both registrational and market-based protection mechanisms: homonymy control, documented and publicized use of the trade name, deposit and surveillance before the SIC, and, where appropriate, trademark registration—fully aligned with the Colombian Commercial Code and Andean Community Decision 486.

By LLOREDA CAMACHO & CO, Colombia, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact colombia@transatlanticlaw.com 

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