When setting up a company, one of the big decisions is deciding on a name that will represent your business. When choosing a name, it is important not only to think about branding, but also to make sure that you comply with the rules on naming a company. This blog sets out the four key issues to take into account when choosing your company name.
1. Choosing a name: the rules
Ltd, limited, plc, public limited company
In the UK, private companies limited by shares must generally use the 'Limited' or 'ltd' suffix to show that they have limited liability. If you are incorporating a company in Wales, it is also possible to use the Welsh equivalents "Cyfyngedig" or "Cyf". If the company is a public company, it must use either 'plc' or 'public limited company' at the end of its name. An exception to the requirement to use one of these suffixes is a where it is a company limited by guarantee providing it meets certain criteria regarding the company's objects.
Too similar?
A key point is that you cannot have the same name as or a name too similar to another registered company. Companies House provides a company name availability checker – before you start incorporating your company, it is sensible to check whether you can use your proposed name.
Companies within the same group are permitted to have similar names. If they are not to be in the same group, it is also possible to get written confirmation that the other company does not object to your company having a similar name.
Even if a name is different enough to pass the Companies House rules, you could still be challenged if you have used a name similar to the name of another business. If your company name is 'too like' another, that other company can complain and Companies House will contact you and advise what you can do. "Passing off" actions can also be brought against a person who uses a name similar to that of another established company to try to profit from the goodwill and reputation associated with that company.
Offensive and sensitive words
It might seem obvious, but company names must not be offensive. Companies House can reject names that it considers to be offensive and you should be ready to justify why you think it is not offensive if you wish to use it.
There are also certain sensitive words and expressions which require specific authorisation to use either from the Secretary of State or other bodies. These include words which suggest some connection to a government or local authority or suggests a qualification or a regulated profession. The words requiring permission are all listed on the Companies House website and include words such as "Scotland", "royal", "chartered", "bank" or "architect".
2. A "trading name"?
It is possible to trade under a different name to the official name on the Companies House register. The business name must not include any of the suffixes, such as ltd., referred to above. Although a business name is not a registered name, it is still important not to use one similar to another company's name, especially if it is a trade mark, as it can still be challenged.
3. Displaying a company's name
Generally, a company is required to display its name at its registered address and wherever it is running its business. There are exceptions to this rule such as if that place is primarily a residential address and it is not your company's registered office, or if an insolvency practitioner has been appointed in relation to your company.
You must also include your company's name on company documents and communications. On business letters, order forms and websites, you must also show the company number, registered office address, country in which the company is registered and show that it is a limited company (for example, by giving its full name including suffix).
4. Changing a name
Changing a company's name after it is incorporated will usually require a special resolution, passed by its shareholders. It is important to check your company's articles of association (or memorandum) as the articles may either restrict this power or alternatively give permission for the company's name to be changed using a different method, such as by allowing directors to make this decision.
This proposed name change must then be registered at Companies House either online or by post by filing the form NM01 (if by special resolution) or NM04, if changed under permission granted by the articles of association, together with the payment of a fee (currently £8 or £30 for same day service if completed via Companies House's online service, or £10 / £50 if done by post).
If you would like advice in relation to incorporating your business and our company secretarial services, or in relation to the name of your company, please contact Brodies to see how we could assist your business.
