What is Social Reason

What is a social reason? corporate reason is the nomenclature assigned to a company, that is, its official name registered with the registry office, board of trade or government agencies.

Also known as Corporate Denomination, Social Denomination or Business Firm, it is the legal name present in the main documents related to the company, such as checkbooks, invoices, service contracts, administrative papers, scriptures and etc.

It is commonly used in operations of the type administrative, legal It is formal, with the main objective of individualizing the establishment in the exercise of its activities.

During the process of opening a company, it is important to check if the chosen name is already registered. In this case, another option should be sought as a choice of corporate name.

Through the Filing process of the Social Contract, the company name has been officially published to third parties, all this so that there is no violation of copyright and brand creation rights.

These guarantees are supported by the laws of the Federal Constitution, the Brazilian Civil Code and the Paris Union Convention for Industrial Property matters.

Characteristics of the corporate name

After chosen and made official the reason sofficial, the owner of the company should be aware of the acronyms that define the field of activity, in addition to its legal framework, of which:

• EIRELI: means “Limited Liability Sole Proprietorship”. Represents establishments that declare a capital of at least 100 salaries, in addition to being composed of only “one partner”.
• LTD: the acronym represents the abbreviation of the word “Limitada”, a nickname attributed to companies that have a limited number of partners.
• SA: abbreviation of “Sociedade Anônima” and qualifies publicly traded companies.
• ME: are the “Microenterprises”, a category that includes establishments with an annual income of less than 120 thousand reais.
• MEI: is the “Individual Microentrepreneur”. The acronym configures companies with revenues of up to 80 thousand reais per year.
• PPE: represents “Small Companies”. They are limited liability companies (LTDA) under the Simples Nacional tax regime, with annual revenues between 120 and 1.2 million reais.

Some examples :

• Claro SA;
• Small House Confecções M.E;
• Play Kids Recreações LTD.

Company name x trade name

Many people still have doubts about the difference between corporate name and trade name.

To clarify the difference, we say that the fantasy name is the “popular” nickname of the company, known by the general public of consumers.

For example, large companies such as Cacau Show (trade name), have a corporate name (Marzuchi Com. De Alimentos LTDA ME) completely different from each other.

In other cases, the terms may be the same, as in the case of the department store C&A S.A (corporate name) / C&A (trade name).

The trade name must be made official at the National Institute of Industrial Property (INPI), the body responsible for registering trademarks and patents.

See too: What is MEI?