Marketing July 20, 2016 Last updated September 18th, 2018 1,903 Reads share

Important Requirements When Choosing a Company Name in the UK

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Deciding what to call a new company can be one of the most challenging aspects of setting up a business. Well, aside from coming up with a viable business idea that you hope will be successful. It’s important to choose a company name that is going to appeal to your target audience, be recognizable and memorable, and effectively convey the purpose and/or core values of your business.

Sadly, it’s not as simple as picking a name out of a hat. The process requires and deserves some valuable time and careful consideration spent on it. It’s a bit like naming a child. Keep that in mind and you’ll be fine.

During the brainstorming and decision-making processes, it’s helpful to think about the following:

  1. What message and impression do you want to communicate to the world? Your business name will be the first point of contact for most people, so make it count. Despite what we’re always advised against, we do judge a book by its cover. The same applies to business names.
  2. Do some research to determine whether the name has any negative connotations attached to it, or if it has a different meaning in other parts of the world where you may wish to sell your goods.
  3. Does the name suit your business and the products or services you will be offering? Does it make sense?
  4. Will it stand the test of time, or is it an on-trend name that may become unfashionable or unappealing after a short while? Think long-term.
  5. Could it be restrictive to future plans when your business becomes established and grows?
  6. Is it easy to pronounce and spell, or could it cause confusion and make it challenging for people to find your business online?
  7. Is it interesting and distinctive, or could it be perceived as a bit dull and mediocre?
  8. Test out your selection of ideas on friends, family and acquaintances to determine their perception of the names. Take on board their comments and suggestions, but do remember that not everyone will agree or like the same name. The decision is ultimately yours to make.

These are all important things you will need to consider before registering the name. What you don’t want it to end up with an inappropriate and unsuitable name that you want or need to change after your business is up and running.

Company name rules and restrictions

As is always the case, there are a few legal guidelines and restrictions that will affect your choice of name. Before you can register your company, you must ensure your wonderful new business name abides by the rules set out in:

  • The Companies Act 2006;
  • The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015 (SI 2015/17); and
  • The Company, Limited Liability Partnership and Business (Sensitive Words and Expressions) Regulations 2014 (SI 2014/3140).

The most important restrictions and requirements to be aware of are:

#1. Name ending

The names of all UK private companies, whether limited by shares or guarantee, must end with “limited” or “ltd”. Welsh companies may use “cyfyngedig” or “cyf” at the end. You can only apply for exemption from this requirement if you are registering a private company limited by guarantee with articles of association that state the following:

– The objects of the company are the promotion or regulation of art, commerce, science, education, religion, charity or any profession incidental or conducive to any of those objects.
– Income will be applied to the promotion of the company’s objects.
– Members (guarantors) are prohibited from receiving dividend payments or any return of capital.
– All the assets that would otherwise be available to members generally and transferred upon the winding up of the company must instead be transferred to another body with similar or charitable objects.

#2. Uniqueness

The name you choose must be distinctive. As such, you cannot choose one that is the ‘same as’ the name of another registered company. A name that is very similar to another company name, so much so that it could cause confusion as to which company is which, is also prohibited. Adding symbols and punctuation to the name is not sufficient to alter its similarity to an existing name. However, you can use the name of a company that has been dissolved and is no longer registered on the Companies House index.

#3. Sensitive words

Sensitive words and expressions are those which could mislead or harm the public by being included in the name of your company. This includes words that:

– Suggest business pre-eminence, a particular status, or a specific function, i.e.
– Imply a connection with the Government, the Royal family, a devolved administration, a specified public authority or a local authority.
– Represent a regulated activity.
– Could be offensive.

In order to use any such words or expressions in a company name, you must be able to prove that their inclusion is justified and appropriate. To do so, you will have to obtain approval from the Secretary of State at Companies House, or include a letter/email of non-objection from the specified authority which governs the use of the particular word or expression.

How to find out if your company name is available

It is advisable to do a search of the Companies House index of company names as soon as you have a name in mind. Do not even consider getting your logo designed or printing stationery before doing this – it could be a costly mistake!

It only takes a minute or so to find out if a name is available. Simply hop on over to Companies House WebCHeck, enter your proposed name in the yellow search box and select ‘Company Name Availability Search’ underneath.

If the name is taken, or it is deemed very similar to an existing company name, you will be notified on the screen and prohibited from registering it. If no matches are returned, it means the name is not currently in use by any other company.

If you choose to register your company through a formation agent, you will be able to carry out a free name availability search on their website before or during the incorporation process.

One final point – be sure to register your company name as a domain as soon as possible. This will enable you to set up a website address and business email account in your company name, which will strengthen your brand and make it much easier for customers to find your business online.

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Rachel Craig

Rachel Craig

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