A recent Freedom of Information request by BBC Wales revealed that almost 50 company names were rejected over the last year because they were deemed potentially offensive. Amongst these were ‘Titanic Holdings Limited’ and ‘Sod it Systems Limited’, although it appears the former name was subsequently justified and accepted by Companies House.
Whilst some names are clearly inappropriate, there are other less apparent restrictions when choosing (and using) a company name. These are 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).
Here are our top 10 tips to ensure your company is not caught out:
- WebCHeck – identical or similar names
Before choosing a name you should use Companies House WebCheck service to ensure your chosen name is not the ‘same as’ an existing name on the index of company names. A company may not be registered under the Companies Act 2006 with a name that is either the same as or sufficiently similar to (so as to be likely to cause confusion) another registered name. There is an exception to this rule where the proposed company will be part of an existing corporate group in which case it can have a name which is considered the same but not identical to that of another company in that group.
- Intellectual property
The Trade Marks Register of the UK Intellectual Property Office should be checked to ensure that the proposed name does not infringe an existing trade mark in the UK. Furthermore, the fact that a company name is approved for use by Companies House does not guarantee that the use of the name could not give rise to a passing-off action.
- Public or private?
The name of a private limited company must (unless an exemption applies) end with the word ‘Limited’ or ‘Ltd’ (or its Welsh equivalent). The name of a public limited company must end with ‘public limited company’ or ‘p.l.c.’ (or its Welsh equivalent).
- Permitted characters
The name must not consist of more than 160 permitted characters. These can contain certain symbols, such as @, £ and ? anywhere in the name, but note that symbols such as * and # may not be used in the first three permitted characters.
- Offensive words or expressions
As seen above, offensive words or expressions cannot be used. Companies House has published no guidance on this issue and will judge each case individually. The Government’s Department for Business, Innovation and Skills (now known as BEIS) indicated in its Company & Business Names Consultation that the law prohibits names containing profanities or words that are, for example, blasphemous, crude or racially offensive.
- Prohibited words or expressions
Certain words and expressions which do not necessarily constitute an offence but are protected or regulated by other legislation may not be used. For example, words such as ‘Architect’, ‘Building Society’, ‘Olympic’ and ‘Red Cross’ are all protected and a company requires the prior consent of the applicable professional body in order to incorporate such words into a company name.
- Sensitive words or expressions
Certain words and expressions which are considered to be ‘sensitive’ may only be used in a company name with the approval of the Secretary of State or the relevant professional body. These include the words ‘Bank’, ‘Fund’, ‘King’ and even ‘Sheffield’ (as the latter is protected by The Company of Cutlers in Hallamshire).
- Displaying your company name
A company need not trade under its registered name but it must display its registered name at its registered office, any other place where the company’s records are kept for inspection and any place it carries on business. It must also disclose its registered name on all forms of its business correspondence and documentation, whether in hard copy, electronic or any other form, including business letters, notices, invoices and its websites.
- File online
Companies House guidance confirms that a name cannot be reserved and, moreover, it states that it cannot guarantee to process applications by any particular time or in the order that they are received. Therefore, where possible, company incorporations and changes of name (which only take effect on the issue of the new certificate of incorporation by Companies House) should be filed electronically, as electronic documents are generally processed more quickly than paper documents. It is also possible (for an extra fee) to request same day services.
- Name swap
Because you cannot reserve a company name, there is no way of ensuring a simultaneous exchange of names by group companies when filing the necessary paperwork online at Companies House. We are happy to help arrange simultaneous name changes using our links with company formation agents and Companies House.
Please contact a member of our corporate team for assistance and further guidance relating to company names and company formations.