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'Can I reserve my company name before I register it?'

by , 18 February 2015
You want to start a company in six months' time. You're excited and you even have a name for it.

But because you're still ironing out some things before you register, you're worried someone else may take the company name you want to use. And this will delay when your business can start trading as you'll have to start all over again.

You're wondering if it's possible to reserve your company name before you register it.

Read on to find out the answer...

Can and should you reserve your company name before you register it?

The Practical Tax Loose Leaf Service explains that under the old Companies Act, you used to have to reserve your company's name before you registered it. But this is no longer the case. You can start the process of registering your company name without reserving it.
But this isn't a good option. It's still best to reserve your company name. Here's why…
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Directors' duties according to the new Companies Act

Did you know that being a company director nowadays is not what it used to be? Gone are the days when the title of 'company director' was just a label that brought prestige, extra income and few duties. Today's director faces:

  • Daunting duties, e.g. directors may only use their powers (which have been given to them as directors) to benefit the company;
  • Hefty responsibilities, e.g. the director must act how a reasonable director would act. Gone are the days when if you were a director, and if something went wrong you could hide behind the excuse: 'But I'm not qualified to do this job!' Under the new Companies Act, if you're going to be a company director, you're going to have to get clued up!
  • Potentially serious liabilities – going to jail for 10 years is just one such liability.

The 2008 Companies Act, which was introduced on 1 May 2011, sets out a new set of rights and duties for directors. Let's see what they are


Here's why you should reserve your company name

Let's say you don't reserve your company name. Six months down the line, you send the Companies and Intellectual Property Commission (CIPC) an application to register.
But the CIPC finds that the company name on your company's Notice of Incorporation is the same as a registered company, or reserved name.
In this case, the CIPC will use your registration number as the name in the interim (i.e. your registration number followed by South Africa). This will throw your existing company name out the window. You'll have to think of another name from scratch – which could take you months. And when you eventually come up with a new name, you'll have to go back to the CIPC to deal with the paperwork.
So reserving your company name saves you heaps of time.
You'll find out upfront if the name you want to use is already registered or if it's reserved.
If it's not registered or reserved, you're then able to reserve it for yourself so no one can use it. And if you find that the name already belongs to someone else, you can come up with a new one sooner and protect it so no one takes it again. This way, your business plans stay on track.
Important: The CIPC only reserves your company name for six months and will only give you an extension if you have good reasons.

So how do you reserve a company name?

The CIPC explains that to reserve a name, you must follow these steps:

  • Click on 'On-line transacting' and then on 'Name reservations' under e-Services;


  • Login using your customer code and password (if you don't have these details, register on the CIPC website first);


  • Click on 'Name Reservations';


  • Click on 'Proposed Name';


  • Put down the company names you want to use (one and four names in order of preference);


  • Click on 'Submit Proposed Name';


  • You'll see a screen showing if the exact name test was successful or not. If the test for one of the names you want isn't successful, you'll see a cross next to it. You must click on 'Back' and propose another name if you want to add one;


  • If there's no cross, click on 'Lodge Name Reservation';


  • The next screen will show that the name you want is reserved. You'll then get a reservation number;


  • Click on either 'Back to Name Reservations' or on 'Home';


  • After five working days, you'll get an SMS and email confirming the name reservation with the reference number of the reservation.

It's that simple.
While legally you don't have to reserve your company name before you register it, it's advisable that you do.
PS: For more information on company registration, check out the Practical Accountancy Loose Leaf Service.

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