Umfirmierung - Change of name in Germany

A change of name often seems to be an excellent idea to free a company from a crisis or to realign it. However, the name change involves more work than most people think at first glance - and also involves many risks.

What you can expect today:

• What is a change of name?
• Success through a change of name
• Costs & risks of a change of name
• Checklist for a change of name
• Aftermath
• Conclusion

What is a change of name?

A change of name is the technical term for the change of name of a company. It does not matter whether it is a one-man business, a nationally or even internationally operating company. Whether a change of name only affects the change of name or whether the target group, industry or brand image are also revised is solely at the discretion of the respective responsible parties.

This has no influence on the official process. Even if only small adjustments are made to the name or if it is completely replaced, it makes no difference in terms of administration.

In English, there is no special name for the change of name. Mostly the nouns Renaming or Change of name are used in the definition. If a company changes not only the name but also other essential characteristics, it is often referred to as rebranding. In this case, the respective company revises its entire public appearance, often also Logo, Slogan, and other parts of the Corporate Identity.

Change of company name vs. transformation

Strictly to be distinguished from the change of name is the conversion - even if the terms are sometimes used synonymously by ignorant people. A transformation refers to the change of the business form of a company. If, for example, an AG is converted into a GmbH, the expert speaks of a conversion. This can be accompanied by a change of name, i.e. a change of corporate name. But this is not a must.

In English, the conversion is often referred to as a change of the company's legal state. However, the terms conversion or change of legal form are also commonly used.

How & where do I change the company name?

How exactly the change of name is done depends largely on the type of company.

• Sole proprietors and freelancers usually do not have to officially announce the name change anywhere. They can simply give themselves a new name and then continue with their daily business.

• For bigger companies or GmbHs the situation is different: Here the change of name must be well prepared in order to be able to carry out the change smoothly later on. In the case of a UG or GmbH, the partnership agreement must be changed for a name change. This requires a shareholders' meeting with a corresponding resolution. This must also be notarized.

In addition to the internal processes, the change of registration with the trade office and a change of the company name in the commercial register are also necessary.

• If the company is a member of associations or other organizations, the name must also be changed there. In addition, there are entries in telephone directories, trade registers, and similar directories.

Change of name from UG to GmbH

A special feature is the change from a UG to a GmbH and vice versa. This is not, as one would expect, a transformation. A change of legal form in the actual sense does not take place. Entrepreneurial companies are based on the same basis as limited liability companies. A UG is more exactly regarded as a special form of the GmbH. Once the necessary share capital for the latter has been reached, a conversion can be carried out as a voluntary change of name.

Success through the change of name - reasons & advantages

There can be many reasons for the decision to change the company name. Among the most common ones are a reorientation, realignment, or simply an expansion of the company. Since the company name is closely linked in the minds of customers with the products and services offered, it should evoke positive associations in the target group. If you scare off potential customers just by naming your company, you will lose valuable market share.

Reasons for a change of name

The possible reasons for a change of name are manifold. If problems arise with the old name, a clear cut and a change of name is often the better solution than costly marketing campaigns with an unclear outcome.

Other reasons for a change of name are:

• Trademark law: When companies grow, it may turn out that the name leads to conflicts with already existing companies. In order to avoid a lengthy and often expensive trademark law dispute, a change of name is advisable.
• Error in the earlier choice of name: The previous company name simply does not remain in the head because it is too long or complicated. In addition, both customers and the media keep mistyping it - then it is definitely time for a change of name.
• Perception: The name of a company should above all evoke positive and appealing associations. If this is no longer the case due to problematic developments in the company, then it is time for a change of name.
• Address: Ideally, the company name should always address the desired target group. However, this can change or alter over time. If this is the case, a too specific name should be adapted.
• Reorientation: No matter whether it is about addressing a different target group, a change of industry, or concentration on a different market - major changes can make a change of name necessary.
• Expansion: Regional providers can often score points with a name that refers to the location. But if the company is growing and wants to operate nationally, internationally, or even globally in the future, such a name can be a hindrance.

Advantages of the change of name

Besides the logo, the name of a company is often its most important distinguishing feature. In the minds of customers and potential new customers, it must be linked to as many positive associations as possible. If for whatever reason, this is not the case, things usually go badly economically. Once an opinion is formed, it is often difficult to revise it.

The worse the image of the company is in the mind, the fewer people are willing to accept new information about it and the more stuck in their opinion. A change of name is then usually less costly and above all cheaper than a large-scale image campaign, the success of which is also uncertain.

A new company name can also help to generate new market shares or regain lost customers by slightly changing the company's orientation and approach. If the needs and wishes of customers change and you react too late to them, the old company name will often settle down as backward and slow. A change of name can bring new wind into the company and the perception of the customers.

Costs and risks of a change of name

Unfortunately, a change of name does not always bring advantages. Depending on the status of the previous name, the change is associated with more or fewer risks. In addition, the change of name also generates costs. The expenses for the necessary services of the administrations are fixed and therefore easy to plan. However, measures for informing existing customers and revising the logo, advertising materials, corporate identity, and much more often result in much more far-reaching costs that are also difficult to calculate and determine from the outset.

Costs - for commercial register, notary and business registration

The expected costs for formal changes in the context of a change of name can be easily planned. These include:

• Change in the commercial register: 50 to 70 Euro
• Business registration: 30 to 40 Euro
• Notary costs for a change of name of a GmbH: 300 to 400 Euro
• Registration with associations and clubs: according to their statutes

Risks - effort, image, time

Unfortunately, a change of name is not always automatically successful. It must be well planned and closely monitored by the company's management and marketing department to ensure that the hoped-for benefits are actually achieved. The biggest risks associated with a change of name are

• Loss of previously built up reputation
• Existing customers lose the interest
• The reorientation conveys uncertainty
• Social media channels lose reach
• Customer recommendations under old name become worthless
• Costs break the budget with bad calculation

Many of these risks can be minimized with good planning and calculation in advance. Those who prepare existing customers for the change of name well in advance and can convince business partners in a personal conversation of further cooperation need not fear any losses here.

If the old company name had a great reputation and familiarity, it is often worth investing in taking it with you. The maintenance of several domains on the Internet with corresponding redirects to the new presence is indeed associated with additional costs. However, these costs are usually amortized quickly by tapping otherwise lost customers.

Checklist for a name change - your way to a new name

With this practical checklist, preparing and handling the change of name is almost child's play. In any case, it helps you not to forget any of the important points on the way to the new company name.

Scouting the change of name as an option

• Do market research
  • Analyze target groups
  • Highlight the unique selling proposition
  • Observe competitors
• Find a suitable company name
  • Reference to the field of activity
  • Appealing to the target group
  • No trademark problems
  • Simple, easy to remember
  • concise
  • Unique

Prepare change of name

• Prepare employees for the change of name
  • Set up and make available an estimated timeline
  • Provide necessary background information
  • Showing opportunities and conveying security
• Inform customers about the upcoming change of name
  • Thank you for your cooperation so far
  • Convey security
  • Negotiate offers for further cooperation
  • If necessary convince in a personal conversation
• Prepare marketing campaign for a change of name
  • Promote acquaintance of the new name
  • Present an unique selling point
  • Winning new customers
  • Develop a social media strategy for the change of name
• Prepare name change
  • Letterhead
  • Stamp
  • Business cards
  • Packaging
  • Shipping material
  • Order new advertising materials
  • New consumables with company name
  • Address plates and similar with new company name
  • Buy a new Internet domain
• Optional: Work out new corporate image
  • Find a new motto
  • Customize website
  • Developing new advertising materials

Initiate change of name

• If necessary: convene a general meeting
  • Majority decision for the name change
  • Change shareholder agreement
  • Notarial certification
• Entry in the commercial register can be changed
• Business registration
• Move Internet domain
  • Set up forwarding on the old domain
  • New domain goes online
  • Adjust links
  • Adapt search engine optimization to new company name
• Inform existing customers about change of name
• Bring employees up to date
• Update entries in business directories, telephone directories, etc
• Launching advertising and marketing campaigns
• Intensify social media work and announce name change

Optional: Follow up on name change

• Survey the status of the enterprise
  • Development with existing customers
  • Development with new customers
  • Image of the company
  • Unique selling proposition successfully transported?
  • General status of the company
  • Derive further measures
• Address target groups not yet reached more intensively
• Recovery action for lost regular customers
• Possibly further image campaign
  • Inform employees about the stand and thank them for their support
  • Thanks to loyal customers

Consequences of the change of name

A change of name has far-reaching consequences, not only in terms of public image and customer relations. Internal processes and regulations can also be affected by the name change. For this reason, not only business partners but also your own employees should be informed about the upcoming name change at an early stage and involved as far as possible. In this way, uncertainty about the change can be minimized among the workforce and a secure climate created.

Influence on the legal form of the company

A change of name has no influence on the legal form of a company or business. Anyone who wants to change it must go through a conversion. Of course, conversion and change of name can also happen simultaneously. Then the company changes both its name and its legal form.

Employment contracts - what happens with them?

In the case of a change of name, the previous employment contracts remain valid. It is not necessary to conclude new contracts under the new company name. However, new contracts should of course be concluded exclusively under the new name.

A change of name often leads to a certain amount of uncertainty among employees. In order to prevent this, it is important to provide comprehensive information as early as possible. This includes the information that the old employment contracts will remain valid under the new name.

Conclusion

A change of name is a simple yet often quite successful means of leaving a bad image behind, repositioning oneself in the market, or realigning a company. However, changes are often accompanied by a great deal of uncertainty. This affects both the company's own employees and existing customers. Comprehensive communication is therefore essential if the change of name is to be crowned with success.

If one considers only the officially necessary administrative effort, a change of name is very easily possible with most legal forms. The only exceptions here are GmbH and UG, because a shareholders' meeting must be convened and a positive vote must be taken. Often substantially greater is the expenditure in the background of the Umfirmierung: Finding the correct company name, the development and production of new advertising and expendable items as well as the production of image and advertising campaigns is often expensive and complex. Therefore, a change of name is often anything but cheap in the end - but can be worth it within the shortest possible time if it is successful and opens up new markets.