Text of the provision
Art. 521. The goodwill of a business is property, and may be transferred together with the right to use the name under which the business is conducted.
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Civil Code of the Philippines, Republic Act No. 386, approved June 18, 1949, effective August 30, 1950. Reproduced in full; verified verbatim against the LawPhil and ChanRobles official-text renderings.
What this article means
The goodwill of a business is property. It may be transferred, together with the right to use the name under which the business is carried on.
"Goodwill" refers to the reputation, customer following, and earning capacity a business builds up over time — an intangible advantage that has value even though it cannot be touched or physically possessed. Because the article classifies goodwill as property, it can be sold or assigned like any other asset; and because it is bound up with the identity the public associates with the business, the article allows it to be transferred together with the right to use the name under which that business has been conducted.
Questions about this provision
- Is the goodwill of a business considered property that can be sold or transferred to another person?
Related provisions
- Article 520 — Ownership Of Registered Marks.
- Article 549 — Possessor In Bad Faith: Fruits.
Cases interpreting this article
- Authorities on this article will be added here as each is verified against primary sources.