Once you have decided it’s time to start out on your own, one of the first things on your to-do list will be picking a name for your new business. When forming a company, it’s important to choose something which will represent you, your business and what it does, as well as make it stand out from the crowd. But business names in the UK are strictly regulated by Company and Intellectual Property law. This isn’t as scary as it sounds because as long as you know the rules, picking a good name for your business is easy.
The type of business you create will affect what you can call it and what rights you have to use that name. Different formations have different rules for what their names can be. The majority of businesses in the UK (over 60%) are sole traders. Being a sole trader is perfect if you’re going to be working on your own and you’re just getting started. It is the easiest way to start doing business, and it’s free to set-up.
However, it is yourself you are registering, not your business, and therefore you cannot use this method to register a business name or brand name. As sole traders do not register their name on any formal list, the only way to enforce their right to use a sole trader business name is to try to take competitors to court. It is therefore not a particularly effective way of building and protecting your new brand.
Secure the name
The most common way for start-ups to protect their business name is to form a limited company. Limited companies are ideal if you want to start a business with a friend or a group of friends as the company structure will clearly set out who owns what and who does what, up front. That way, when your idea turns out to be worth millions of pounds, you know who’s going to benefit. It also limits your personal liability if things go wrong.
A major benefit of a limited company is that once the name is lodged at Companies House, nobody else can register it. Similarly, if someone else has already registered a name, you can’t have it. You will, therefore, need to check the name you hasn’t already been taken and isn’t too similar to any other company name. Just because a name isn’t being used, doesn’t mean you can register it.
Know the rules
You cannot use:
- Any sensitive words unless you have permission (there are over 200 of these);
- A name which suggests connection with the government or local authorities;
- A name that includes words that would be considered an offence (breaking the law);
- Any words or phrases which are offensive (may upset someone).
So for example, you couldn’t call your business ‘Kings International Group’ without receiving permission from Constitutional Policy Team to use king. You’d also have to be able to prove that a significant part of the company’s business takes place overseas to use international and that it is in a parent/subsidiary relationship with two or more companies to use group.
There have been proposals recently that the rules around company names might be relaxed or even scrapped in the future, but for the moment, you still have to comply with them.
Successfully selecting a name which complies with Companies House rules is easy enough to do if you know how, but simply registering your business name does not completely protect it. If someone already owns the trademark they can force you to change the name of your company as trademarks supersede any other registration. If this happens, you’ll have to completely rebrand your business. This may include purchasing new domain names and rebuilding your website or app. In short, if you register a name which infringes a trademark, everything from business cards to your company t-shirts will need to be replaced which will be expensive and a significant disruption.
For example, I could register ‘Google Search Limited’ and Companies House wouldn’t stop me, but Google would be very upset, and I’d likely get a strongly worded letter from their lawyers. This might sound like a silly example, but our company deals with 20,000 start-ups a year, and we regularly get people trying to register companies that include words like Twitter, Cisco and Virgin. All of these may be available at Companies House but would breach trademarks.
Do your research
Clearly, you aren’t going to register a company with any of these potential pitfalls, but you do need to check that there isn’t a business you’ve never heard of that has already registered trademarks with the name you want to use. To check if a name might be trademarked, you can start with some internet searching, do a search on the IPO website, and if in doubt pay an intellectual property specialist to do comprehensive a search for you.
Protect your brand
As soon as you’ve found a name which is available at Companies House and does not infringe on any existing trademarks, you should find out if you can register it with the Intellectual Property Office before someone else does. Likewise, you may want to think of unique names for the products or services you sell and then register those.
Fools rush in
As you can see, there is quite a lot to think about before you register your business. We often encounter enthusiastic entrepreneurs who jump in before they’ve done any research and end up getting into trouble and wasting money before they feel like they’ve even started. This need not be the case. There is lots of help available, and even a little research online can go a long way.
As well as the guidance you can find online there are lots of professionals who can assistant you in choosing a good business name that you will be able to establish as a great brand. You could turn to your accountant or solicitor for help, or seek the expert skills of Intellectual Property specialists or a company formation agent. Formation agents are often a good first port of call as they spend all day every day setting up companies and will know all the rules inside out.