Don’t let legal gotchas upend your rebrand — 3 key questions to explore with counsel

Don’t let legal gotchas upend your rebrand — 3 key questions to explore with counsel

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Wednesday, April 13, 2022 | Vladimir Kacar

Making the decision to rebrand comes with a number of legal requirements and considerations. This is especially true if you’re changing your name, transferring ownership, or otherwise fundamentally altering your brand identity.

No matter your organization’s size, it’s important to work closely with in-house counsel to understand the varied ramifications of your rebrand. But the stakes are even higher to get it right if your industry is highly regulated or if your organization operates in multiple states or countries. The more complex the scenario, the more attention you’ll need to devote to remaining compliant.

That’s why it’s a wise move to make your legal department an ally early in the rebranding process. In fact, we recommend that you seek advice from legal counsel before you develop any other implementation plans.

There are key questions you should explore with counsel to develop an implementation plan that takes every legal requirement into account. We’ll delve into several of the most common considerations here. But please note: although BrandActive is well-qualified to offer operational wisdom and guidance, this is not legal advice.

How does our rebrand impact our organization’s name, ownership, and/or structure?

Any identity change requires consultation and close alignment with legal counsel. But there are several scenarios that come with far-reaching implications.

Changing your organization’s name

A simple way to change your organization’s name is to file or update your DBA. This informs the public that you are “doing business as” a name other than your legal entity name. Your legal team may decide this is the best route for your business if your rebrand is fairly straightforward. But filing a DBA may not be the right choice if your rebrand is more complex.

To choose the best long-term course of action, your legal team will need to understand the rationale for your rebrand. You’ll need to provide as much strategic context and market analysis as possible so that Legal can determine the most advantageous way to proceed.

Transferring ownership from one company to another

If you’re rebranding due to an M&A, for example, you probably feel immense pressure to roll out your new identity quickly and efficiently. But before you forge ahead, take time to discuss your unique situation with counsel.

Filing an official change of ownership (CHOW) is more complicated than a DBA, but it might be the best way to proceed as it presents an opportunity to (re)set and simplify your legal entity structure. This can be quite appealing when two companies embark on a merger of equals and embrace an entirely new identity. In this scenario, Legal might want to dissolve both companies and register a new one.

Restructuring the organization’s holdings

A rebrand is also a good time to decide whether to restructure or retire any redundant or obsolete holdings. You may find there are service offerings or sub-brands that are no longer relevant to your corporation’s strategic direction. Take time to identify those areas with legal counsel early in the process so you don’t waste any organizational resources converting branded assets for a portion of your company that no longer has a reason to exist.

It's important to build a holistic plan that maps out all legal implications and ensures your new identity is updated according to the specific requirements of your regulatory bodies.

What regulations should we be aware of to remain compliant throughout the rebrand implementation process?

The decisions your legal team makes about your organization’s name, ownership, and structure all come with downstream implications for keeping your rebrand compliant. So it’s important from the start to build a holistic plan that maps out all these legal implications and nails down the approaches you will take to ensure your new identity is updated according to the specific requirements of your regulatory bodies.

Depending on your industry, you may need to be mindful of:

  • Branded entities that mitigate risk. Some companies, including many in the energy sector, distribute and contain risk in minor operating companies. By regulation, the brand of these operating companies may need to appear on certain branded assets, such as fleet vehicles. So, brand guidelines and practices must be flexible and detailed enough to ensure the brand is represented properly.
  • High-impact, public-facing assets. In healthcare, in particular, it’s important for the patient experience to be consistent. Public-facing assets must clearly state and match the legal practice name or DBA the practitioners are providing care from. And all of that should align with your billing statements. Failing to update your name and brand identity in all the right areas could result in financial penalties. Medicare and Medicaid could even deny your reimbursement claims.
  • Compliance and licenses. Your business might be required to file multiple types of licenses in each state where you operate. Changing your legal status could affect all these licenses, requiring you to update each one before launching your new brand in affected markets. For product labels in the life science and pharmaceutical realm, labels must include the legal entity name and, in the case of medication delivery, be synchronized with the timing of the new legal name’s effective date. Brands in the financial services industry utilize a variety of fact sheets to market their products. These are licensed by each individual state in which the brand operates and need to be updated promptly to remain in compliance.
  • Product certification and trade compliance. Product rebranding requires consultation with in-country competent authority to prove that the new branding does not alter the integrity or functionality of the product. For example, we worked with a telephony company that rebranded all its phones. Since the logo was etched onto each one, the company was responsible for working with regulatory bodies in multiple countries to determine if recertification was needed. Once product certification is complete, companies must consider how their name appears on the documentation that accompanies imported or exported goods, including confirmation that the rebranded product can be sold in each country.

Although these are some of the most common regulations we’ve encountered, there may be additional regulatory and compliance requirements for your business. Be sure to thoroughly explore this question with your legal team to identify any other considerations you need to be aware of.

Are there legal considerations to keep in mind when planning our launch or converting our branded assets?

Once you’ve identified the legal requirements, you’re responsible for adhering to, you can begin planning your launch and branded asset conversion strategy.

Launching your new brand

Deciding on the best strategy to launch your new brand to the world is fun and exciting. But it’s also costly and can come with immense pressure to get it right. Therefore, it’s extremely important to make sure all your t’s are crossed and all your i’s are dotted in terms of your legal dependencies.

If you met with legal counsel early in the rebranding process, they’ve likely had adequate time to complete all necessary paperwork and filings prior to your launch date. If not, they might ask you to wait to launch until all the legal details have been taken care of.

Your legal team can also advise you about any grace periods associated with converting your branded assets once you’ve officially introduced your new brand to the world. For example, M&A-driven rebrands might require you to update all your public-facing touchpoints within a specific timeframe. You might incur a fine for every day you use a legacy trademarked identity past an agreed-upon date.

Converting your branded assets and touchpoints

As a marketing leader, you know how important it is to present a consistent brand experience to your audience via all your branded assets and touchpoints. But there are also legal and regulatory reasons to make brand consistency a priority as you convert your branded assets, as listed above. Your colleagues in legal, regulatory, and compliance can help you evaluate your branded asset conversion strategy according to your unique needs.

Rely on your legal department as a trusted partner in rebranding

Your legal department exists to keep your organization on the right side of every law, regulation, and rule that pertains to your business. As such, think of them as a trusted partner in your rebrand. Update them about your plans to change your brand identity right away. Ask good questions. And rely on their expert guidance and advice as you’re developing your rebrand implementation plan.

When it comes to carrying out every compliance-related detail related to your plan, consider engaging an implementation partner. BrandActive understands how every dependency is connected. And because of that, we’ll sequence every element of your work plan and bring together all the right people to execute it flawlessly.

Ready to get started? We’d love to hear from you.

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