Start-up businesses – Legal package

Start-up-businesses must realise it is important to select a name which is capable of distinguishing your business from other businesses in the same trade. Such distinctive name will have a trade mark function. Trade marks are registered on the Trade Mark Register.

If you are considering forming a company, for convenience, registration of the same name/trade mark could also be considered on the Companies Register.

With the increase of internet users, electronic communication and e-commerce, it is important to consider the availability and registration of your new business name on relevant Domain Name Registers. The .CO.ZA domain name space is the most important for South African businesses. Domain names are registered on a “first come, first served” basis.

There is no cross-referencing between the South African Trade Marks Register, South African Companies Register and relevant Domain Name Registers. Due to this factor, disputes arise, if different traders use and register their names on the different Registers concerned. Such disputes could cost start-up businesses dearly in time and money, and many start-up businesses do not have sufficient funds to start over with a new name, if they have to change their names due to a name or trade mark conflict.

For this purpose, we are offering a package of services for South African start-up businesses which include all the checks and registrations mentioned above. The total cost of the total service package is R13 000 (excl VAT) and the break-down and details of the services covered are set out below.

Phase 1: Availability checks:

1. Trade mark search – to check availability of a single trade mark on the South African Trade Marks Register
2. Domain name search – to check availability of appropriate .ZA domain name
3. Name reservation on Companies Register – to check possible conflicts on the South African Companies Register

The checks described at points 1 to 3 will cost R2500 (excl VAT) and usually takes about 7 working days, depending on the assistance rate at the Registries.

Phase 2: MOI for company:

4. Drafting and finalising a customised Memorandum of Incorporation (“MOI”) for a Section 57(4) company (owner-managed private closed companies) for up to 3 members. This phase will cost R3000 (excl VAT).

The Companies Office (CIPC) offers a standard template MOI for the registrations of new companies. However, the adoption of this standard MOI is not recommended, or acceptable for this start-up package, as it inter alia gives directors wider powers, fails to stipulate accounting obligations, and can expose private companies to the same risks and liabilities of public companies.

The New Companies Act provides for unalterable provisions and alterable provision which should be reflected in a MOI. The MOI should thus reflect the unalterable (compulsory) provisions and special consideration should be given to the insertion of the alterable provisions to suit each company’s special needs and rules.

Phase 3: Registrations:

5. Trade mark application – to apply for registration of a single mark in one class on the South African Trade Marks Register
6. Domain name registration – to register a single .CO.ZA domain name
7. Company registration –simple “closed company” up to 3 members

The actions described at points 5 to 7 will cost R7500 (excl VAT).

The action at point 5 includes classifying the mark, preparing and filing the application, reporting thereon, monitoring the application, following-up at the Registry, necessary file attendances, preparing and forwarding a Power of Attorney, (late) lodging of the Power of Attorney after filing (before the official action is issued by the Registry), receiving the signed acceptance notice and arranging for advertisement of the mark in the Patent Journal, if unconditionally accepted, payment of official fees and normal disbursements. If no objections/requirements are raised by the Registrar or third parties, no additional charges should be raised, except for the issuance of the Registration Certificate after about 2 to 4 years from the filing date.

Our reports relating to the above package of services may also include additional recommendations which will cost extra for broader protection.

Trade Mark Registration Procedure:

Once a trade mark application is filed, it may take between 6 and 9 months to proceed to examination by the Registrar of Trade Marks, depending on the examination rate of the Registry. The Registrar may, upon examination set certain requirements for acceptance of an application. As soon as any requirements set are complied with, the application will be accepted and then advertised in the Patent Journal. The application will then be open for opposition by third parties for a period of 3 months. If no objections are raised during the opposition term, a certificate of registration will be issued. It follows that it could therefore take approximately 2 to 3 years for a trade mark to proceed to registration. However, if the checks above were positive, you could start using your name in trade immediately.

Terms:

The service packages described above are subject to our firm’s standard terms of engagement and only apply when clients instruct us to proceed with all services included in the package at the same time.

These service packages are further only available to South African citizens, or persons / businesses with domicilium in South Africa, and able to pay accounts in South African Rands from local bank accounts.

VAT will be added to the costs indicated.

You are welcome to contact us, if you are interested in proceeding on this basis, or have any queries.


– Published by our Intellectual Property Department.