Choosing Business and Company Names
Introduction
Naming a business is an important consideration for anyone starting a new venture. Business owners must comply with strict rules governing the use of business and company names.
Here we will look at the difference between a 'business name' and a 'company name'. We outline some of the key considerations involved in choosing a name and introduce the main legal restrictions on names. We also outline the rules for the disclosure of names for different types of business.
The information below is intended as a starting point only. When choosing a business or company name, it is important to take appropriate professional advice where necessary.
What are business and company names?
A business name is any name a business trades under that is different from:
In the case of a sole trader, their own name.
In the case of a partnership, the names of all the partners.
In the case of a limited company, its company name.
A 'company name' is the name under which a company is registered with Companies House.
Choosing a business or company name
A name is central to a firm's identity and can help distinguish it 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's character.
Available as an internet domain name.
Easy for customers to find in directories and listings.
Permitted under UK legislation.
Business owners should avoid names that are confusing, misleading, or use terms that will date quickly.
Legal restrictions on business and company names
All business and company names must comply with the following legal restrictions:
They must not be offensive.
They must not infringe the trade mark of another business. To check the Intellectual Property Office's list of registered trade marks, go to www.gov.uk/search-for-trademark.
They must not contain certain 'sensitive' words without permission. These include, for example, words that imply a connection with government, an 'accredited' status or membership of a regulated profession. For more information, go to www.gov.uk/government/publications/incorporation-and-names/incorporation-and-names#sensitive.
They must not include words that mislead the public, even unintentionally, into believing the business is associated with another business (known as 'passing off').
The terms 'Limited' and 'Ltd' can only be used if the business is a limited company. Similarly, the terms 'limited liability partnership' and 'LLP' can only be used by businesses that are registered limited liability partnerships.
Company names must comply with certain additional rules set out in the Companies Act 2006. For example, a company name must not be the same as any other registered company name and it must usually end in either 'Limited' or 'Ltd'. For more information about the rules that apply to company names, go to www.gov.uk/limited-company-formation/choose-company-name.
Rules for the disclosure of names
All business owners must comply with legal requirements concerning the disclosure of names, as follows:
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 displayed on the business premises, the business's website and on official documents such as invoices, receipts and letterheads.
Limited companies: The full registered name of a limited company must be displayed in its registered office and wherever the business operates. It must also be on all business communications, websites and documentation.
Key legislation
The Companies Act 2006 sets the legal framework governing the use of company and business names. In addition, the following regulations concerning company and business names are in force:
The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015.
The Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009.
The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014.
Contact Ashored for help with choosing a business name and ongoing support with your business.
