How to choose the right name for your company (and keep it safe!)

Before you grab a Sharpie and start drafting the universe’s biggest thought shower of business names, you need to make sure you know the fundamental technicalities of registering it. There’s a surprising amount of red tape when it comes to selecting one you like; some of it common sense and some quite intense.

What are the rules of registering a name?

First thing’s first – if you’re setting up a limited company, (i.e. a private business whose owners are legally responsible for its debts) the name must end with either the word ‘limited’, ‘ltd.’ or the Welsh equivalent. If it’s a public limited company (registered under the Companies Act with statutory minimum capital requirements) then you need that on the end, or the abbreviated ‘plc’ version.

Words and expressions that suggest your company is connected to the Government or specified public authority require prior approval from the Secretary of State, such as “Queen”, “Council”, “University” etc. The list of name regulations has recently been amended by the UK government in response to a Red Tape Challenge consultation in 2013, with “abortion”, “watchdog” and “human rights” removed from the sensitive terms, among many others.

What kind of names should I avoid?

You want your name to be memorable. Lengthy names, initials and random words can be difficult to remember. Be cautious of using names that don’t say what you actually do if you’re just starting out: quirky brand names are great for creative businesses, but beware of going too far outside the box (unless you’re prepared to promote the name hard to determine the market position you want, that is).

As obvious as it sounds, the company name must also not be abusive, offensive or constitute an illegal act to utilise the name. Account for possible double entendres, misreadings and potential cultural translations; or you could end up like Mammoth Erection scaffolding company, or Great Head hair salon. Hilarious? Absolutely. Businesses you’d want to give your money to? Nope.

What happens if the name I want is already taken?

Eureka! Oh, wait. It does happen and it will happen – you’ll come up with an unthinkably genius name, only to Google it and discover someone is already trading under it. What do you do?

Always check that the name you want to use is not registered already at Companies House register (or a similar name to the one you want), as a UK limited company or LLP name. If you find it has (grr!), check out the basic details of that company: when it registered, whether it’s still trading, or when it last filed accounts.

If a name is registered as a trademark (but not in use), you can apply to have it revoked. Always take legal advice before pushing forward with these kind of negotiations. In the same manner, if a business is not in commercial use, you may still be able to use the name, regardless of the registration.

You will, however, need to differentiate your own name. This can mean adding a suffix, such as Icon (Group) or John Smith (International). Deciding whether one name is the ‘same as’ another on the Companies House register can was previously a lot more complicated than it is now. Recent removal of expressions once regarded as ‘same as’ make life a little simpler for businesses, such as the inclusion of signs, symbols and accents.

What if I decided to go ahead and use the name anyway?

Don’t risk it. Company names are automatically protected under the law of ‘passing off’, and if a business with the same name have suffered any loss due to you using it, the court will order you to compensate them (and stop using the name).

If you both have the same name and are in the same sector or region, you’ve got a higher chance of a passing off action. Why? Customers can be misled into thinking you’re the same company – i.e. passing off your products or services as being connected.

If someone else has registered a name that’s become reputable in the marketplace, goodwill is attached to that brand. It’s sticky territory, so take legal advice if you land in any grey areas name-wise.

What happens if my company name gets damaged?

It’s every business’ worst nightmare: one social media slip-up from misinformed employee, or a highly damaging video leaked to YouTube and your company name can be hurt for life.

Look at Mcdonalds: their ‘pink slime’ scandal was possibly one of the biggest PR disaster of all time, as images emerged of the chain using ammonium hydroxide in its mean. How did they respond? The fast food company welcomes camera crews inside their factories to show consumers exactly what was going on.

It takes enormous courage, but it’s this kind of corporate transparency that, in the end, will minimise the damage to your brand reputation. Stay quiet, and others will take it upon themselves to spread (often false) information. Keep tabs on your social media and, in more serious cases, hire a reputation management professional. Don’t risk your precious company name by being unprepared.

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