A2398

An Act concerning the registration of corporate alternate names and amending N.J.S. 14A:2-2.1.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. N.J.S. 14A:2-2.1 is amended to read as follows:

14A:2-2.1. Corporate alternate names

(1) No domestic corporation, or foreign corporation which transacts business in this State within the meaning of section 14A:13-3, shall transact any business in this State using a name other than its actual name unless

(a) It also uses its actual name in the transaction of any such business in such a manner as not to be deceptive as to its actual identity; or

(b) It has been authorized to transact business in this State, using an assumed name as provided in subsection 14A:2-2(3); or

(2) Any corporation may adopt and use [any] an alternate name, including any which would be unavailable as the name of a domestic or foreign corporation because of the prohibitions of paragraph 14A:2-2(1)(b), but not including a name prohibited as a corporate name by paragraph 14A:2-2(1)(c), by filing a certificate of registration of a corporate alternate name with the Secretary of State executed on behalf of the corporation. The certificate shall set forth

(a) The name, jurisdiction and date of incorporation of the corporation;

(b) The alternate name;

(c) A brief statement of the character or nature of the particular business or businesses to be conducted using the alternate name;

(d) That the corporation intends to use such name in this State;

(e) That the corporation has not previously used the alternate name in this State in violation of this section or, if it has, the month and year in which it commenced such use.

(3) (a) Such a registration shall be effective for five years from the date of filing, unless sooner terminated as provided below, and may be renewed successively for additional five-year periods by filing a certificate of renewal executed on behalf of the corporation at any time within three months prior to, but not later than, the date of expiration of the registration. Not more than four months and not less than one month prior to the date of expiration of the registration, the Secretary of State shall notify the corporation of the date of expiration and the requirements for renewal of the registration. The certificate of renewal shall be effective as of the date of expiration of the earlier registration. The certificate of renewal shall set forth the information required in paragraph 14A:2-2.1(2)(a) through paragraph 14A:2-2.1(2)(d), the date of filing of the certificate of registration then in effect, and that the corporation is continuing to use the alternate name. If a corporation ceases to use an alternate name in this State prior to the expiration date of the five-year registration period, it may file a termination certificate. A termination certificate shall state the name of the corporation, the alternate name for which the corporation has filed a certificate of registration and that the corporation has ceased to use the registered alternate name. The termination certificate may recite the date upon which the corporation ceased to use the alternate name, but no recital shall be required.

(b) An alternate name registered with the State pursuant to this section shall be a name that is not identical or so similar as to be substantially indistinguishable from the alternate name of another corporation unless there is filed a certified copy of a final judgment of a court of competent jurisdiction establishing the prior right of the corporation to the use of such name in this State. An alternate name registered before the effective date of P.L. , c. (pending before the Legislature as this bill) shall be terminated within 180 days if the name is identical or so similar as to be substantially indistinguishable from an alternate name of another corporation with a prior effective registration. Within 90 days of the effective date of P.L. , c. (pending before the Legislature as this bill), a corporation with a registration subject to termination shall be notified of the date of termination. The notification shall include the form necessary to file a new corporate alternate name and no filing fee shall be assessed for the filing of a certificate of registration pursuant to the terminate notice.

(4) Nothing in this section shall be construed

(a) To grant to the registrant of an alternate name any right in the name as against any prior or subsequent user of the name, regardless of whether used as a trademark, trade name, business name, or corporate name; or

(b) To interfere with the power of any court to enjoin the use of any such name on the basis of the law of unfair competition or on any other basis [except the mere fact of identity or similarity of the alternate name to any other corporate name].

(5) A corporation which has used an alternate name in this State contrary to the provisions of this section shall, upon filing a certificate of registration of alternate name or an untimely certificate of renewal, pay to the Secretary of State the filing fee prescribed for such a certificate plus an additional filing fee equal to the full amount of the regular filing fee multiplied by the number of years it has been using such alternate name in violation of this section after August 1, 1974. For purposes of this subsection, any part of a year shall be considered a full year.

(6) The failure of a corporation to file a certificate of registration or renewal of alternate name shall not impair the validity of any contract or act of such corporation and shall not prevent such corporation from defending any action or proceeding in any court of this State, but no such corporation shall maintain any action or proceeding in any court of this State arising out of a contract or act in which it used such alternate name until it has filed such a certificate.

(7) (a) A corporation which files a certificate of registration of alternate name which contains a false statement or omission regarding the date it first used a [fictitious] corporate alternate name in this State shall, if such false statement or omission reduces the amount of the additional fee it paid or should have paid as provided in subsection 14A:2-2.1(5), forfeit to the State a penalty of not less than $200.00 nor more than $500.00.

(b) A corporation which ought to have filed a certificate of registration or renewal of alternate name and fails to do so within 60 days after being notified of its obligation to do so by certified or registered mail by the Secretary of State, by any other governmental officer, or by any person aggrieved by its failure to do so, shall forfeit to the State a penalty of not less than $200.00 nor more than $500.00.

(c) Such penalty shall be recovered with costs in an action prosecuted by the Attorney General. The court may proceed in such an action in a summary manner or otherwise.

(8) (Deleted by amendment, P.L. 1988, c. 94.)

(cf: P.L.1988, c.94, s.8)

2. This act shall take effect immediately.

STATEMENT

This bill prohibits the registration of identical or similar corporate alternate names by corporations doing business in the State. The current statute does not prevent the registration of identical alternate names and risks generating confusion among consumers. Corporate alternate names to be registered with the State after the effective date of this bill must be distinguishable from other alternate names already registered with the State.

Corporations that registered identical alternate names prior to the effective date of this bill will receive notification from the Secretary of State that the alternate name is duplicative and will be cancelled. Corporations receiving this notification will have the opportunity to register a new alternate name with the State prior to cancellation and will not be required to pay a filing fee for this initial registration. The corporation that first registered a duplicative or similar alternate name will be permitted to keep the name.