When incorporating as a private company limited by shares or guarantee, you will need to choose your official company name that must legally end with ‘Limited’ or ‘Ltd’ (‘Cyfyngedig’ or ‘Cyf’ if you’re based in Wales). This will then be on the official register with Companies House.
Your business name could be different to your company name however. The following guide, by leading UK incorporation company Wisteria Formations, will clarify for those new to the legal ins and outs exactly what a business name is and how it works.
Business Names Explained
In addition to your official registered limited company or limited liability partnership name, you can also have a business name under which you undertake business other than your own and which does not include the partners’ names.
Bear in mind however that while you are not legally required to display your business name at your work premises, if you’re not using your registered trading name, you must clearly display all the limited company partners’ names in a prominent position at all your business premises.
Unlike company names, business names do not need to be registered. However, under the legalities of the Companies Act 2006, certain rules, though not as stringent as when registering a company name, still apply.
Restrictions to Business Names
As an overview, the following restrictions apply to business names:
- You cannot use words that could imply a connection with a Government department or public body.
- You cannot choose inappropriate and/or misleading words at the end of the name, such as ‘limited’. Anything considered misleading to the public are not permitted.
- Your business name cannot infringe on an existing trade mark.
Additionally, there are rules governing the displaying of your business name on stationary as well as signs on your business premises.
Stationery and Signage Regulations for Business Names
If you use a business name rather than a company name as your customer facing brand, you are legally required to include your name or the names of your limited company partners. This must be clearly visible on the following business correspondence:
- emails and letters
- invoices and receipts
- written demands for payment of debts to suppliers
- written orders for goods or services from suppliers
Furthermore, you must also include a UK address so that business documents can be served to the partner(s) shown on business stationery.
Tackling Approval for ‘Sensitive Words’ in Your Business Name
Just as with choosing a company name, there are a number of restrictions outlined on the Companies House website which relate to ‘sensitive words’ in a business name. If your business name contains any of the sensitive words listed, the way to deal with this is to get the written views of a relevant body outlining why the word is not problematic, and send this to Companies House long with a letter from you asking permission to use the name.
Note that if you do not get permission to use a word considered sensitive in your business name, it is considered an offence and you could be given a penalty fine.
If you’re in any doubt or confusion about your business name, Wisteria Formations advises you to seek out the expert guidance of a respected incorporation company, since you do not want to end up wasting money on paying for stationary and signage that needs to be thrown away because it is not within the legal framework, let alone incur a fine.