Choosing Business and Company Names

Transcription

1 Choosing Business and Company Names Business Information Factsheet BIF368 February 2015 Introduction Naming a business is an important consideration for anyone starting a new venture. Business owners must also comply with strict rules governing the use of business and company names. This factsheet explains how to choose a business or company name. It explains the distinction between business and company names, and introduces the main legislation and legal restrictions on business and company names. It also outlines the rules for disclosure of names for different types of business. How to choose a business or company name A business or company name is central to a firm's identity and can help distinguish a business from its competitors. When naming a new business venture, it is important to choose a name that is: Easy to remember. Unique to the business (at least in its location or sector). Appropriate to the business' character. Easy for customers to find in directories and listings. Simple. Permitted under UK legislation. Similarly, business owners should avoid names that: Are confusing or misleading. Use slang or jargon that will date quickly. Are obscure. The difference between business and company names A business name is any name that a business trades under which is different from: In the case of a sole trader, the business owner's name. In the case of a partnership, the names of all the partners. In the case of a limited company, the registered company name. BIF368 Choosing Business and Company Names Page 1 of 6

2 Anyone registering a limited company with Companies House must provide a company name, but may still choose to trade under a different business name. Business names do not need to be registered, but must meet certain legal requirements. In particular: They must comply with restrictions on certain words that can appear in the name. They must not contain inappropriate name endings - such as 'Limited', 'Ltd' or 'plc' if the business is not registered as a limited company. They must not mislead the public in any way. Which legislation covers business and company names? The Companies Act 2006 (the Act) sets the legal framework governing the use of company and business names. In addition, the following new regulations concerning company and business names came into force on 31 January 2015: The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations These were intended to simplify the rules and remove some of the restrictions imposed by previous regulations. The legislation concerning business names applies to sole traders and ordinary partnerships, as well as to registered limited companies and limited liability partnerships. Legal restrictions on business and company names When choosing a business or company name, business owners must comply with certain legal restrictions. Prohibited names Business and company names cannot include words that are offensive or illegal. Some words and phrases are protected by other legislation and using them without the proper authority could be a criminal offence. These include: Words suggesting certain professions - for example, 'architect', 'dispensing chemist', 'chiropractor' and 'vet'. Words suggesting certain organisations - for example, 'Olympic' and 'Red Cross'. Companies House guidance lists words that are restricted or prohibited under other legislation. Go to for more information. Sensitive words and expressions Under the Act, business and company names cannot include 'sensitive words and expressions' without prior approval from the Secretary of State. These include: BIF368 Choosing Business and Company Names Page 2 of 6

3 Words that imply a connection with Government, a local authority or other public authority - for example, 'government', 'parliamentary', 'NHS'. Words that suggest pre-eminence, status or function - for example, 'Royal', 'British', 'institute, 'chartered', 'health centre'. Any other words specified in the Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations Similar names Business owners must avoid choosing names that are similar to existing business or company names, as these may confuse or mislead the public. The Act specifies that a company name must not be the 'same as' any other registered company. When deciding whether a proposed name is the same as an existing company name, certain words, expressions and symbols must be disregarded. These include: Blank spaces between characters. Any punctuation that occurs within a name. Certain endings and abbreviations at the end of the name - for example, '& Company', '.com', 'Wales'. The following words or symbols used at the beginning of a name: '@', 'The' and 'www'. In addition, specific words and symbols are considered to be the same when comparing company names, such as '7' and 'seven', 'And' and '&', or 'Plus' and '+'. For example, Plumbing Plus Ltd would be considered the same as Plumbing + Ltd. When considering applications to register a company, Companies House will also consider whether the company name is 'too like' an existing name on the register. This means that either: The public is likely to confuse the two names because there are only minor differences between them. The names look and sound similar. Even if a limited company successfully registers their company name, another company may submit an objection to Companies House if they believe it is 'too like' their own. Business owners can check for existing company names using the Companies House WebCHeck service. Go to to search the register. Opportunistic registration Business owners must not register a company name in which someone else has a legitimate interest, with the main purpose of: Making money from registering the name. Preventing someone else registering the name as a company name. BIF368 Choosing Business and Company Names Page 3 of 6

4 Complaints about such practices (known as opportunistic registration) are handled by the Company Names Tribunal. Go to for more information. Passing off Passing off is the term in civil law for misleading the public, even unintentionally, into believing one business is actually another business. For example, selling motorcars under the name Roles Roice could be considered to be passing off. In cases of passing off, the complainant can take legal action against the business owner through the civil courts. It is important therefore to make sure that any business name is unique, at least within its sector or location. Trade marks When choosing a business or company name, business owners must avoid infringing the trade mark of another business. Business owners can check the Intellectual Property Office's (IPO's) trade mark register online. Go to to search the register. For more information about trade marks, see BIF 219, Registering a Trade Mark in the UK. Rules for disclosure of names All business owners must comply with legal requirements concerning the disclosure of names set out in the Act. Sole traders and ordinary partnerships If the business name does not contain the surname of the sole trader, or the surnames of all the partners in a partnership, these names must be clearly be displayed on: The business premises. Business letters. Written orders for goods or services from suppliers. Invoices, receipts and written demands for debt payments. Business s. The business website. For more information, see BIF 363, Setting up in Business as a Sole Trader; and BIF 28, Setting up in Business as an Ordinary Partnership. Limited companies A limited company must display its full registered name in the following places: Its registered office. Any place of business. Any place of inspection. All business communications (including e-communications). BIF368 Choosing Business and Company Names Page 4 of 6

5 Its business websites. All business documentation. All cheques and money orders. In addition, a limited company must disclose the following information on all business correspondence, invoices, orders and websites: Where in the UK it is registered (England and Wales, Scotland or Northern Ireland). The company registration number. The address of the company's registered office. The fact that is a limited company (if it is exempt from the requirement to use 'Limited' in its name). For more information about limited companies, see BIF 167, A Guide to Setting up in Business as a Private Limited Company. Hints and tips Short, simple business names are most easily remembered. To avoid any problems, business owners should check any proposed names against business names in local telephone directories, trade journals, directories of professional bodies, the Trade Marks Register of the IPO, and the Company Names Index from Companies House. Business owners should also consider registering their business name as a domain name. Even if they have no plans to set up a website, business owners may still want to prevent competitors from using their business name online. See BIF 96, A Guide to Choosing and Registering an Internet Domain Name. It may be worthwhile consulting a solicitor before deciding on a business name. Further information To access hundreds of practical factsheets, market reports and small business guides, go to: Website: BIF 28 Setting up in Business as an Ordinary Partnership BIF 32 Choosing the Right Legal Status for your Business BIF 96 A Guide to Choosing and Registering an Internet Domain Name BIF 167 A Guide to Setting up in Business as a Private Limited Company BIF 341 An Introduction to Business Regulations when Starting Up BIF 363 Setting up in Business as a Sole Trader BIF 365 An Introduction to Limited Liability Partnerships (LLP) BIF 459 An Introduction to the Companies Act 2006 Legal publications 'Incorporation and Names' Companies House BIF368 Choosing Business and Company Names Page 5 of 6

6 Website: Useful contacts Companies House provides registration and filing services, as well as useful leaflets and information. Tel: Website: The Intellectual Property Office (IPO) is the Government body for intellectual property protection in the UK. It provides information and advice on all intellectual property issues. Tel: Website: DISCLAIMER While all reasonable efforts have been made, the publisher makes no warranties that this information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate. Cobweb Information Ltd, Unit 9 Bankside, The Watermark, Gateshead, NE11 9SY. Tel: Website: BIF368 Choosing Business and Company Names Page 6 of 6