What you need to know when choosing a company name
When incorporating a company, you must choose a name for your business. The rules for choosing a name differ depending on whether you’re setting up as a private limited company (whether by shares of guarantee), sole trader, or business partnership. This article will discuss the rules that apply when setting up your company as a private limited company.
Your company name is vital to your success. It must be unique and hard to forget. When choosing your company name, of course, you will want to consider a catchy name that presents your brand identity, but there are some important rules to understand before you steam ahead and decide on the best name for your company.
Company name vs Trading name
Despite the typical interchangeability of the two, your registered company name might be different from your business name. You can trade using a different name than your registered company name- your business name.
Your business name cannot include limited or sensitive words or expressions (unless you have received permission), and if your business name is too similar to another company’s trademark, you may also have to change it in light of a complaint.
Before deciding on your company name, you will want to start brainstorming name ideas. When considering what to call your company, you will want to consider what words fit with the type of business you are creating and who the target audience is.
It is also prudent if you are creating how your potential customers might find your company. For example, you might want to consider making your company name SEO (search engine optimisation) friendly so that future customers might be able to find your solution organically. To kickstart your initial brainstorming processes, you might consider using a business name generator, searching for synonyms of typical phrases, and finding inspiration from sites such as Flickr.
As an entrepreneur and startup founder, you will want to ensure that your company name also aligns with your anticipated branding. You might want to consider whether you have a brand name that might be an abbreviation, pun or quirky spin on your company’s name.
Take the name Netflix, derived from the words internet and flix. It's short and easy to pronounce compared to their early competitor, Blockbuster. In his book, "That Will Never Work", Netflix co-founder and CEO Marc Randolph says, "Picking a name is incredibly difficult. For one thing, you need something catchy, something that rolls off the tongue and is easy to remember". Randopl goes on to say that "too many syllables, too many letters, and you risk people misspelling your website. Too few letters, and you risk them forgetting the name."
Names to avoid
Not all names will be suitable, and some may even be damaging. Knowing what to avoid when brainstorming for a company name is good.
Names that are long, hard to remember and difficult to spell are best to avoid. If you have to spell your name to clients, there's a chance they may misspell it, not find you on Google, and you will lose sales. Furthermore, names that don't match your brand or trading name can confuse your stakeholders about your business and impact business growth.
Don't pick a name that restricts your business activity in the future. You might choose a name that focuses on a niche, then have an exciting business idea and decide to extend your offering which no longer falls under that name. Changing your company name can be time-consuming, so make sure you don't put yourself self-in a box unless you know the extent of your product offering from the outset.
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Whilst you might have thought of a good name for your company, you are not at complete liberty to choose it. When you incorporate your company, you have to share your company’s proposed name. The name you select cannot be the same as an existing name of a registered company. You can check if your proposed company name is available here on the registrar of companies on Companies House.
You should also ensure that the name you select does not infringe on intellectual property law. You will want to check with the UK Intellectual Property Office that the name you have chosen does not infringe on registered trademarks.
If your company name is too similar to another company’s or infringes a trademark and someone complains, you might have to change it. A company name is considered the ‘same as’ another company’s name if the only difference to an existing name is: grammatical; the existence (or non-existence) of special characters; a word or character that is similar to another form of the original name, or; a word of character that is commonly used in UK company names. A company might also consider that your company name is ‘too like’ their name, and you might have to change it if someone complains, and Companies House agrees it's too similar.
When incorporating a private limited company, your company name will also end in Limited or ‘Ltd’ or, if your company is incorporated and registered in Wales, the Welsh equivalents ‘Cyfyngedig’ or ‘Cyf’ will apply. You don’t need to use limited (or the Welsh equivalent) in your company name if it is a registered charity or limited by guarantee and your articles of association say: your company regulates or promotes commerce, art, science, religion, education or any profession; can’t pay its shareholders, and; requires the shareholders to contribute to company assets if wound up whilst their members or a year within them stopping.
When choosing the right name, you will also have to ensure that name is not offensive and does not contain sensitive words or expressions. Words and expressions contained in Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014 SI 2009/3140) require approval of the Secretary of State.
Examples of sensitive words
- Audit office
- Health Service
You also need to ensure that, unless you have permission, your company name is not suggestive of a connection with the government or local authorities. Similarly, your company name cannot suggest business pre-eminence, a particular status, a specific function (such as ‘Tribunal’), or represent a regulated activity. If you have received information supporting your proposed name, such as a non-objection letter, this should be included with your registration application (IN01).
Displaying your name
When you have incorporated, you must display a sign with your company name at your registered company address and in any places where the business operates (same if you are running your business from home). The sign must be clear and visible at all times, even during out-of-hours. You must also include your company’s name on all documentation.
Aside from the procedural aspects, your name will also be important for your business development. You might want to get the name out on social media and relevant platforms and sites where your target audience is known to gather.
Once you have decided on the right name for your company, you will want to ensure that you adequately protect your company's interests. You will therefore want to ensure that you have robust contracts in place in order to protect your small business. Legislate provides lawyer-approved contracts on no legal budget which can be tailored to suit your circumstances in a safe and controlled way. View our contract suite or sign up for free today.
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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.