A company's name is an important asset. When starting a new business the name has to be chosen carefully to avoid infringing the rights of established businesses, and to ensure that it complies with the requirements of the Companies Acts. It may also be important to have it registered as a trade mark. Having the name registered as a trade mark will give it much greater protection.
Choosing a name for your new business
Great care must be taken when setting up a company to ensure that it
has a name which meets all the statutory requirements, does not infringe
the rights of others (who may bring legal proceedings
involving both cost and disruption to the new business) and which is adequately
protected against others who may seek to use the
name in the future.
Companies Acts requirements
Under the Companies Acts a new company name must end
in 'Limited' or 'PLC', must not be the same as one
already registered, must not contain certain sensitive
words without permission or suggest connection
with the government and must not be offensive.
1. Ending in 'Limited', etc.
A private company's name must end with 'Limited' (or 'Ltd') and that of
a public company must end in 'public limited company' or 'PLC'. This is
intended as a warning to those dealing with the company that the members'
liability is limited. (There is an exemption for some non-trading companies,
such as charities.)
2. It must not be the same as a name already registered
For these purposes, certain things are ignored when determining whether
one name is the same as another. Stricter rules came into effect for companies
registered from 1st. October 2006. The new rules are:
1. "Limited", "Ltd", "Unlimited", "plc", "LLP" and various similar terms must be ignored.
2. The following are treated as the same:
3. The following must be ignored when deciding whether names are the same:
a blank space, a full stop or @, followed by:
biz, co; co uk, co.uk, com, company, EU, exports, GB, Great Britain, group, holdings, imports, net, NI, Northern Ireland, org, org uk, org.uk, services, UK, United Kingdom, Wales (and a whole lot of Welsh words). (So Smith & Jones Ltd is the same as Smith & Jones.co.uk plc, etc.)
4. The following must also be disregarded:
Similar names
If a name is only very slightly different from one already registered, it
will be accepted for registration but there could still be potentially serious
problems if the name is too like one already in use (see
below).
3. Sensitive words
The following words can be used only with permission from Companies
House or some other body:
Abortion
Anzac
Apothecary
Architect
Association
Assurance (and assurance broker and assurer)
Authority
Benevolent
Board
British
Building Society
Chamber of Commerce (or Chamber of Industry or Chamber of Trade, Chamber
of Training, Chamber of Enterprise)
Charity (and charitable)
Charter (and chartered
Chemist (and chemistry)
Chirpodist
Chiropractor
Contact lens
Co-operative
Council
Credit Union
Dental (and dentist and dentistry, dental surgeon and dental practitioner)
Deposit
Dietician
District Nurse
Drug (and druggist)
Duke
England (and English)
European
Federation
Foundation
Friendly Society
Fund
Geneva Cross
Giro
Government
Great Britain
Group
Health Centre
Health Service
Health Visitor
Her (and His) Majesty
Holding
HPSS (Health and Personal Social Services)
HSC (Health and Social Care)
Industrial and Provident Society
Institute (and Institution)
Insurance (and insurance broker and insurer)
International
Ireland (and Irish)
King
Medical laboratory
Midwife (and midwifery)
National
NHS
Nurse (and nursing)
Occupational therapist
Olympiad(s), Olympian(s), Olympics(s)
Optician
Optometrist
Orthopist
Paralympic(s), Paralympiad(s), paralympian(s)
Patent (and patentee, Patent Office, Patent Agent)
Pharmacist (and pharmaceutist, pharmaceutical, pharmacy)
Phyisiotherapist
Police
Polytechnic
Post Office
Pregnancy termination
Prince (and princess)
Queen
Radiographer
Red Cross, Red Crescent, Red Lion and Sun
Re-assurance (and re-assurance broker)
Register (and registered)
Re-insurance and re-insurer)
Remedial gymnast
Royal (and Royale and Royalty)
Scotland (Scottish)
Sheffield
Society
Solicitor (Scotland)
Special school
Stock Exchange
Technician
Termination
Trade Union
Trust
United Kingdom (and UK)
University
Veterinary (and vet and veterinary surgeon)
Wales (and Welsh)
Windsor
Permission is quite easily obtained for some of these words, but can be very difficult for others. Obtaining permission will usuall cause some delay to the registration of the company and an additional cost.
4. Government connection
The name must not suggest connection with the government or a local
authority.
For example 'Home Office Supplies Limited' or 'Lambeth Housing Services
Limited' could be objected to on these grounds.
5. Offensive names
The name must not be offensive. This is not often a problem, but Companies
House sometimes regard some surprisingly common-place words to be offensive
(eg. 'Firkin' and 'Knickers'). Such objections can sometimes be overcome
by presenting arguments to the Registrar.
Non-statutory considerations
Even if a company name is accepted by Companies House, that is not the
end of the matter. The name, though registered, may be the too like one
already registered, or could be the cause of a legal action for passing
off or infringe a trade mark.
Name 'too like' an existing name
If a company is registered with a name which is similar to that of an
existing registered company, the original company may be able to persuade
Companies House to exercise its powers to order the new company to change
its name. Such an order can be made if the new company has been registered
in a name which is 'too like' one which was already on the register. (Notice
that Companies House will allow a name to be registered that is very similar
to that of an existing company (provided it is not the same), and then,
within 12 months after registration, order the new company to change its
name because it is too like the one already there.) The company is given
6 weeks to change its name.
Passing off
Theother main restriction on the use of a name (for any business whether
sole trader, partnership or company) is that the name used for the business,
or a very similar name, may already be in use by an existing business. The
other business may be able to sue for the tort of passing off.
For a successful passing off action the company suing must show that it
is established in business under that name, or has some other right to its
use, and that the start up company is conducting business in such a way
as to infringe the original company's right to the use of their established
name in such a way that the newcomer is likely to cause damage to the original
company's business. The action is only usually available where the two companies
are in a broadly similar line of business and the same or overlapping geographical
areas. If the original company is successful, it will obtain an injunction
to stop the new company using the name. Damages may be available if infringement
persists and there is, of course, the risk of legal costs
It is important to note that the second company being registered at Companies
House is is no defence to a passing off action. This is why we it is essential
to check a proposed company name carefully. If in doubt, contact
us.
Name checking
So, in a new business start up, it is important that the name check is done
thoroughly. Alternative spellings of all the words should be checked, and
names which are too similar should be avoided, or used only after careful
consideration. Being threatened with litigation and having to change the
company's name having started your new business, and after stationery and
brochures have been printed in the original name can be disruptive and expensive.
Trade marks
Care must also be taken to avoid setting up a company which will infringe
a registered trade mark. In many cases a trade mark search should be undertaken
before registering a company name, and trade mark registration should also
be considered. If in doubt, contact us.
More information on Trade Marks
Use of other names (business names)
A company can use a name other than its registered name, subject to the
Business Names Act 1985. Such a name is not registered at Companies House.
It is quite common to see companies which were bought as ready made companies
trading under another name in this way.
Such a business name must not end in 'Limited' or 'PLC' and must not use
any of the sensitive words listed above without consent.
Company and brand name protection
Distinctive company names and brand names are valuable business assets.
They may be protected by actions for passing off and trade mark infringement,
but such litigation is expensive, time consuming and the results can be
uncertain. Steps should be taken to ensure that, as far as possible, the
names are protected by simpler and cheaper means.
Protection is obtained by:
It is essential that action is taken quickly once the company becomes
aware of any actual or potential infringement of its name. Both practical
advantage and common law rights can be lost by allowing another business
to become established under a disputed name.
We can help with all these matters. Contact us for further information.