Company Names

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A company's name is an important asset. A new company's name has to be chosen carefully to avoid infringing the rights of established businesses and to see that it complies with the requirements of the Companies Acts. It may also be important to have it registered as a domain name for use on the Internet and as a trade mark.

Choosing a new company name
Great care must be taken when setting up a new 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 on 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, these include:

• 'Limited', 'PLC' (or 'public limited company') and 'LLP' at the end of the name;
• the words 'Company' and 'and Company';
• 'The' at the beginning of the name;
• the use of capital or lower case letters and punctuation (and note that 'and' is the same as '&' for these purposes;
• Numbers are the same whether stated numerically or written in letters (i.e. '2' is the same as 'two').

So, if Widget Makers PLC is already registered, none of the following names would be available:

• Widget Makers Limited
• The Widget Makers Company Limited
• widget-makers public limited company, etc.

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
Bank (and banker and banking)
Benevolent
Board
British
Building Society
Chamber of Commerce (or Chamber of Industry or Chamber of Trade)
Charity (and charitable)
Charter (and chartered
Chemist (and chemistry)
Contact lens
Co-operative
Council
Credit Union
Dental (and dentist and dentistry)
Deposit
District Nurse
Drug (and druggist)
Duke
England (and English)
European
Federation
Foundation
Friendly Society
Fund
Giro
Great Britain
Group
Health Centre
Health Service
Health Visitor
Her (and His) Majesty
HoldingIndustrial and Provident Society
Institute (and Institution)
Insurance (and insurance broker and insurer)
International
Ireland (and Irish)
King
Midwife (and midwifery)
National
Nurse (and nursing)
Occupational therapist
Optician
Optometrist
Patent (and patentee, Patent Office, Patent Agent)
Pharmacist (and pharmaceutist, pharmaceutical, pharmacy)
Police
Polytechnic
Post Office
Pregnancy termination
Prince (and princess)
Queen
Red Cross
Re-assurance (and re-assurance broker)
Register (and registered)
Re-insurance and re-insurer)
Royal (and Royale and Royalty)
Scotland (Scottish)
Sheffield
Society
Special school
Stock Exchange
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.

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 obligations 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
The 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 company being sued 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. The fact that the second company is registered at Companies House is is no defence to a passing off action.

Name checking
So, for anyone setting up a new company, 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 after stationery has been printed and business commenced in the original name can be disruptive and expensive.

Trade marks
Care must 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.

More information on Trade Marks

Domain names
A domain name is the name by which a business is registered on the Internet. Internet business is increasing day by day and, whether the directors of the new company have any immediate plans to trade in this way or not, they should consider having their domain name registered to stop others using it.

More information on Domain Names

Use of other 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:

• registering each name as a company name (the companies may be kept dormant);
  
• registering appropriate names and logos as trade marks;
  
• registering all versions of key words as domain names to ensure that others cannot register them;
  
• subscribing to name-watching services which keep all registrations of companies, trade marks and domain names under scrutiny and warn of any which may be dangerous (contact us for details);
  
• constant vigilance: in-house systems should be established to ensure that unauthorised use of any of the company's names is noted, and appropriate action taken;
  
• swift response to infringement

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.
Incorporation Services Limited can help with all these matters.
Call us on 0191 261 5545 for further information.