CHOICE OF COMPANY NAME. (IS USE OF THE PROPOSED COMPANY NAME PROHIBITED OR LEGALLY UNSUITABLE FOR ANY REASON?)
Name already in use | A name cannot be used which is 'the same' as a name appearing in the Registrar's index of company names - section 26(1)(c) of the Companies Act 1985. This issue is addressed in the search facility and text which you can access by clicking here.
| | Name includes the words 'limited' etc., anywhere except at the end of the name | | '(1) A company shall not be registered under this Act by a name - |
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(a) | which includes, otherwise than at the end of the name, any of the following words or expressions, that is to say, 'limited', 'unlimited', or 'public company limited' or their Welsh equivalents ('cyfyngedig', 'anghyfyngedig' and 'cwmni cyfyngedig cyhoeddus' respectively); [or] | |
(b) | which includes, otherwise than at the end of the name, an abbreviation of any of those words or expressions;'
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| Name includes anywhere the expression 'investment company with variable capital' etc | Section 26(1)(bb) of the Companies Act 1985 prohibits the registration of a company under the Act by a name which includes the words 'investment company with variable capital' or its Welsh equivalent ('cwmni buddsoddi a chyfalaf newidiol') at any place in the name.
| | Where use of name may be a criminal offence | Section 26(1)(d) of the Companies Act 1985 prohibits the registration of a company under the Act by a name the use of which would in the opinion of the Secretary of State constitute a criminal offence. As an example, the Architects Act 1997 makes it an offence for a person to carry on business under any name containing the word 'architect' unless the person is registered under the Act as such. A listing of such words (and the relevant legislation and regulatory authority in each case) is set out at the end of the Companies House publication entitled Company Names. If you want to use any of these words or expressions in your company name, you should contact the relevant regulatory authority or seek advice from Companies House before proceeding.
| | Offensive name | Section 26(1)(e) of the Companies Act 1985 prohibits the registration of a company under the Act by a name which in the opinion of the Secretary of State is offensive.
| | Name suggesting a connection with the government or a local authority | This is dealt with in section 26(2) of the Companies Act 1985 which provides, in part, as follows:
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(2) | Except with the approval of the Secretary of State, a company shall not be registered under this Act by a name which - |
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(a) | in the opinion of the Secretary of State would be likely to give the impression that the company is connected in any way with Her Majesty's Government or with any local authority; | |
(b) | includes any word or expression for the time being specified in regulations under section 29. [This is discussed below.] |
'Local authority' means any authority within the meaning of the Local Government Act 1972 or the Local Government (Scotland) Act 1973, the Common Council of the City of London or the Council of the Isles of Scilly.
| This provision would be likely to apply to a proposed name including words like 'Crown' or 'Government' etc.
| | Name includes a 'sensitive word or expression' | In addition to words suggesting a connection with the Government etc., regulations having effect under section 29 of the Companies Act 1985 specify a number of words and expressions which cannot be used without prior consent being obtained from the Secretary of State for Trade and Industry. (It appears that no regulations had been made under section 29, however by virtue of section 31(2) of the Companies Consolidation (Consequential Provisions) Act 1985 and section 17(2)(b) of the Interpretation Act 1978 as read with section 31(11) of the Companies Consolidation (Consequential Provisions) Act 1985, the Company and Business Names Regulations 1981, SI 1981 / 1685, as amended by SI 1982 / 1653, SI 1992 / 1196, SI 1995 / 3022, have effect as if made under section 29.)
Broadly, 'sensitive words or expressions' are ones which, when used in a company name, may imply business pre-eminence, a particular status or a specific function. The aim of the regulations is to ensure that the word or expression is justified so that the public is not misled by the name. Companies House acts on behalf of the Secretary of State in dealing with applications for approval of such words and expressions. (In the case of a company the registered office of which is to be in England or Wales, you should deal with Companies House in Cardiff. In the case of a company the registered office of which is to be in Scotland, you should deal with Companies House in Edinburgh.) If you choose a name for the company which includes a 'sensitive word or expression' Companies House will respond in different ways depending upon the category of name chosen. For example, if the word or expression implies national or international pre-eminence (e.g. 'British') you will normally need to provide evidence that the company is British owned and that it is pre-eminent in its field. If the word or expression implies a representative or authoritative status (e.g. 'association') you will normally be required to ensure that the company is limited by guarantee and that the memorandum and articles of association provide that any profits are to be used to further the company's objects and not be paid to the members/shareholders as dividends. If the word or expression implies specific objects or functions (e.g. 'group') you will normally be required to provide evidence of the proposed company's association with two or more other British or overseas companies.
A full discussion of the various sensitive names and the likely response of Companies House to each of them may be found under heading number 3 of the Companies House publication 'Company Names'. The text under that heading makes reference to the important Appendices A, B and C which appear at the end of the same publication.
If you desire to include in the company name, any of the words or expressions listed in Appendix A (of the above-mentioned Companies House publication) you will probably be asked to supply certain supporting information to Companies House before Companies House will register the name. If your choice of name includes any of the words or expressions listed in Appendix B, you will need to write to the 'relevant body' to ask if they have any objection (and if so, why) to your using the word or expression in your company name. For example, if you wish to use the word 'Dentistry' in the company name, you will need to write to The Registrar of the General Dental Council. As mentioned above in this guidance, Appendix C comprises a list of words or expressions the use of which in a company name may constitute a criminal offence (e.g. the use of the word 'architect' except by a person registered as an architect under the Architects Registration Act 1997). UKcorporator recommends that you read the list of words and expressions contained in each of Appendices A, B and C which appear at the end of the Companies House publication 'Company Names'. If your proposed company name includes any of the words or expressions in those appendices, and you still wish to proceed with the name, UKcorporator suggests that you read the 'Company Names' publication thoroughly as, in many cases, it suggests the means of proceeding further.
| | Name 'too like' another company name | If the name you choose is 'too like' another company name, it is possible that the company you are forming could be compelled later to change its name. This issue is dealt with in section 28 of the Companies Act 1985. Subsections (2) to (5) of that section are as follows:
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(2) | Where a company has been registered by a name which - |
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(a) | is the same as or, in the opinion of the Secretary of State, too like a name appearing at the time of the registration in the registrar's index of company names, or | |
(b) | is the same as or, in the opinion of the Secretary of State, too like a name which should have appeared in that index at that time, |
the Secretary of State may within 12 months of that time, in writing, direct the company to change its name within such period as he may specify.
Section 26(3) [quoted above in this guidance] applies in determining under this subsection whether a name is the same as or too like another. |
(3) | If it appears to the Secretary of State that misleading information has been given for the purpose of a company's registration with a particular name, or that undertakings or assurances have been given for that purpose and have not been fulfilled, he may within 5 years of the date of its registration with that name in writing direct the company to change its name within such period as he may specify. |
(4) | Where a direction has been given under subsection (2) or (3), the Secretary of State may by a further direction in writing extend the period within which the company is to change its name, at any time before the end of that period. |
(5) | A company which fails to comply with a direction under this section, and any officer of it who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
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So, in essence, the Secretary of State may direct a compulsory name change within a year if a name is 'too like' another or, if misleading information was given, the Secretary of State may give such a direction within 5 years. In considering whether a name is 'too like' another the Secretary of State takes account of any factors which suggest there is a danger of confusion between the two companies. Such factors may include the nature and location of the respective business activities of the two companies and evidence to show there has been actual confusion may also be taken into account.
Directions under section 28 of the Companies Act 1985 usually follow the receipt by Companies House of a complaint about a name being 'too like' an existing name.
| | The tort of passing off | This overlaps to some extent with the issue discussed above under the heading 'Name 'too like' another company name'. A company may be restrained by an injunction from using the name with which it has been registered (and indeed a business name under which it trades) if it carries on its business in such a way as to represent that it is the business of another, or is in any way connected with the business of another. The company may not only be restrained by injunction from using the name but also may be held liable to pay damages.
It can be difficult to establish whether the name which you have chosen for the company, or a similar name, is being used by another business, as there is no public registry of business names in the United Kingdom. It is advisable to check local telephone books and any relevant trade journals or magazines, to see if any other business (particularly a business in the same field as the one proposed to be conducted by the company) is already using the same or a similar name. The following links may be of assistance in your enquiries:
| Yell.co.uk
Yellow pages from British Telecom.
| 118 500 Directory Enquiries
British Telecom White Pages for the UK, both for people and businesses. (Does not cover the Channel Islands.)
| AskAlixUK
Hybrid business directory and search engine.
| ThomWeb
Business and people finder.
| | Trade marks | It is possible that your chosen name (or at least the main part of the name omitting the formal part such as 'Limited' or 'plc' etc.) could already be a registered or pending Trade Mark, or could be misleadingly similar to such a Trade Mark. Such a circumstance could lead to major problems particularly if the Trade Mark is registered in the same category of goods or services in which your proposed company intends to trade. In such circumstances, the Trade Mark owner could, in all likelihood, restrain your company from using its (your company's) name in connection with the supply of the goods or services in question. Also, the existence of your company's proposed name, or a similar name, on the Trade Marks register could impede any plans by your proposed company, or anyone associated with it, to register the name as a Trade Mark.
Companies House does not consult the Trade Marks Register when considering an application for a company name. It is therefore prudent to check the Register of Trade Marks before settling on the proposed company name. A search of the Trade Marks Register may be conducted online.
| | Internet domain names | If your proposed company might in future wish to establish a website on the internet, it would be prudent to check that your proposed company name (or at least the main part of the name omitting the formal part such as 'Limited' or 'plc' etc.) is not already a registered domain name. You can check whether various 'uk' top level domain names (i.e. domain names ending with 'uk') have already been registered, by using the 'WHOIS' search facility on NominetUK at the bottom right-hand corner of the page.
An Internet Service Provider (ISP) can also help check the availability of a Domain Name for you.
| | Misleading names | This is dealt with in section 32 of the Companies Act 1985. The first four subsections of section 32 are as follows:
| | 32 Power to require company to abandon misleading name |
(1) | If in the Secretary of State's opinion the name by which a company is registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, he may direct it to change its name. |
(2) | The direction must, if not duly made the subject of an application to the court under the following subsection, be complied with within a period of 6 weeks from the date of the direction or such longer period as the Secretary of State may think fit to allow. |
(3) | The company may, within a period of 3 weeks from the date of the direction, apply to the court to set it aside; and the court may set the direction aside or confirm it and, if it confirms the direction, shall specify a period within which it must be complied with. |
(4) | If a company makes default in complying with a direction under this section, it is liable to a fine and, for continued contravention, to a daily default fine.
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By way of example, the Secretary of State might well form the relevant opinion if the company had a name such as 'Miracle Slimming Tea Products Ltd' or 'We Cure Cancer plc'.
| | Phoenix companies | The Insolvency Act 1986 contains provisions designed to prevent the operators of a recently failed company from forming another company with the same or a similar name as the failed company. This was a frequently occurring abuse of the protection afforded by limited liability and often operated to the detriment of the creditors of the failed company.
Section 216 of the Insolvency Act 1986 provides that a person who was a director or shadow director of a failed company at any time in the period of 12 months ending with the day before the failed company went into liquidation, shall not (except with the leave of the court) within the period of five years beginning with the day when the failed company went into liquidation -
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(a) | be a director of any other company that is known by a prohibited name; or |
(b) | in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of any such company; or |
(c) | in any way, whether directly or indirectly, be concerned or take part in the carrying on of a business carried on (otherwise than by a company) under a prohibited name.
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The expression 'prohibited name' is defined in section 216(2) of the Insolvency Act 1986 as follows:
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(a) | it is a name by which the (failed) company was known at any time during the 12 months period ending with the day before the failed company went into liquidation; or |
(b) | it is a name which is so similar to a name falling within paragraph (a) above as to suggest an association with the (failed) company.
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The expression 'shadow director' is defined in section 251 of the Insolvency Act 1986. It means, in relation to a company, '...a person in accordance with whose directions or instructions the directors of the company are accustomed to act (but so that a person is not deemed a shadow director by reason only that the directors act on advice given by him in a professional capacity)'.
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| Criminal sanctions are provided for in the case of a breach of the above provisions - section 216(4) of the Insolvency Act 1986. |
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