BLP - Choosing a business name

A client needs to consider:

• Any regulatory regime (if any) that applies to the name chosen &
• Whether the name chosen be legally protected.

Regulatory regime

Different regimes for incorporated businesses (e.g. companies & LLP) and unincorporated business (partnerships and sole traders).

Incorporated businesses (Companies & LLP)

Neither limited companies nor LLP can be registered (i.e. cannot form) unless the name chosen by their founders is approved by Registrar of Companies. To get that approval the name must not be:

• An existing name on the index, maintained by the Registrar of Companies.
• A name whose use would be a criminal offence.
• A name which is offensive.
• A name which is misleading.
• A name which would suggest a link with HM Government.
• Nor contain any prescribed words without the consent of the relevant regulatory body (Company & business Names Regulations 1981 –SI 1981/1865).

See also CA 85 (ss25-29 & 348-351) & Limited Liability Partnership Act 2000.

Unincorporated businesses (Partnerships & Sole Traders)

As long as a sole trader or Partnership choose to trade under their own name(s) then no regulations apply. Because everyone transacting with such a business knows the identity of those who run the business (s1 Business Names Act 1985).

If however they wish to use a “business or trading name” would mean that ss2-11 of the Business Names Act 1985 would need to be complied with, i.e. so that the actual surnames of those running the business are disclosed on all correspondences (invoices) so that creditors and all third parties know who they are dealing with.

The use of any prescribed names in the business name requires permission of the relevant specified body (see Company and Business Names Regulations 1981 for a full list of words and the appropriate body).

A corporate body wishing to trade under a business name would be required to comply with Business Names Act s1(1)(c). Which would mean the corporate body’s registered name would have to be disclosed on all stationary etc. Again so that the creditor knows who they are dealing with.

HOWEVER AFTER 1^ST OCTOBER 2008 CORPORATE NAMES WILL BE DEALT WITH UNDER PART 5 OF CA 06 WHILST BUSINESS NAMES WILL BE DEALT WITH UNDER PART 41.