COMPANY LAW - 17.05.2011

Choosing the right company name

The directors recently purchased an off-the-shelf company; they’re now busy brainstorming for a suitable name. Are there any legal restrictions on what they can select? What are the rules on this subject?

Guessing games

When it comes to choosing a name for a new company, the directors need to take great care. Pick one that falls foul of the Company and Business Names (Miscellaneous Provisions) Regulations 2009 - even accidentally - and it’s going to be rejected. That won’t be good if you’ve already forked out a small fortune for business stationery, a website, etc.

Taking no chances

The Regulations say that a company name can’t be registered if it:

  • is offensive
  • suggests any government or local authority connection
  • doesn’t end with “Ltd”
  • uses any prohibited characters, signs, symbols and punctuation
  • is the “same” as another name which appears on the register at Companies House; or
  • differs from another name registered at Companies House “in a trivial way”.

It’s basically the same

A company name will be the same if it: (1) is identical to an existing company name; or (2) could be deemed “essentially the same” because it “differs in only a minor way”. There’s a long list of minor elements, including blank spaces between words, additional characters, symbols, plurals, and “the” or “www” put at the beginning of a name.

A named example

This can easily be problematic. Say, for example, you wanted to register “meandyou Ltd” and this company name already existed on the register - you couldn’t tweak your spelling to “me&you Ltd” or “meandyou (UK) Ltd” to get around the Regulations. It’s likely that “meandU Ltd” or “me&U Ltd” would also be rejected.

The future risk

But even if a company name is accepted on first registration, an objection can still be made about it to the Secretary of State - anyone can do this. Under the Companies Act 2006, he can force the new company to change its name if it’s considered to be too similar to an existing one.

Tip 1. Before attempting to register a company name, spend sufficient time checking that it’s acceptable and not open to challenge. Conduct a thorough search of the register of company names at Companies House and the trade mark register held by the Intellectual Property Office; both can be viewed online (see The next step).

Tip 2. In addition to getting the company’s name right, directors must always properly disclose it. For example, it must appear in full on all correspondence and business documentation, e.g. invoices and business cards. It should also be displayed at the company’s registered office and any other location where it carries out business.

For links to the register at Companies House (CD 12.16.04A) and the Intellectual Property Office (CD 12.16.04B) and for further information on company names (CD 12.16.04C), visit http://companydirector.indicator.co.uk.

A company can’t use a name if it’s already registered at Companies House. Neither can it select something offensive, drop the “Ltd” or bear a close similarity to an existing registration, e.g. by changing “and” to “&”, or inserting spaces between letters. Check the register thoroughly before making a final decision.

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