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You have decided to incorporate a company and have been considering what to name it. First impressions count and potential customers will infer a lot from your company name. You may decide to choose a name that reflects the activities your business undertakes or something more abstract.

The Rules

Make sure that a chosen name:

• is not offensive;
• does not constitute a criminal offence (section 53(a) of the Companies Act 2006);
• does not include any sensitive words or expressions;
• is not the same as or similar to another company's name;
• ends with ‘Limited' or ‘Ltd' unless the company is a public company (in which case the name should end with ‘Public Limited Company' or ‘Plc') or a charity (see below).

Exemptions can be obtained from using the word ‘limited' at the end of a private company name if a private company is a charity or a company limited by guarantee which meets certain conditions.

Sensitive words are words that you cannot use in a company name unless you have official permission as they may give a false impression about your company. There are 5 main groups of sensitive expressions.

Sensitive words can be used if the relevant consent is obtained. Certain words require the Secretary of State's approval and some words also require approval of a relevant regulatory body.

You should also check that your proposed name is not too similar to a word or expression which someone else has registered as a trade mark. Find out if your selected name has already been registered as a trade mark on the Intellectual Property Office website: www.ipo.gov.uk/tm/t-find/t-find-text/

Displaying a Company Name

You must show your company name outside every place of business in most circumstances and include your company name on all business letters, electronic business communications, orders, payments, invoices, receipts and other business documents. Also you must include your registered address, company number and place of registration on any business letters, emails and order forms.

Your company's website must show:

• the full name of the company;
• the registered office address of the company;
• the company's registered number;
• the place of registration of the company;
• if the company is being wound up.

Challenges to a company name

The Secretary of State can within 12 months of registration direct a company to change its name if it is the same or too like another registered company name, or if a company name does not include the word ‘limited' and no longer benefits from the exemptions that allow a company name not to contain the word ‘limited'. The Secretary of State may direct a change of name within 5 years of incorporation if misleading information was supplied when the company was incorporated or an undertaking has not been fulfilled within 5 years. The Secretary of State may also direct a change of name if the registered name gives such a misleading indication of activities as to be likely to cause harm to the public.

A company's name can be changed on the order of the Company names adjudicator. A person can apply to the Company Names Adjudicator if a Company's name is the same as a name associated with the person objecting in which he has goodwill or where the name is sufficiently similar to such a name that it would be likely to mislead. Company names adjudicators can only deal with cases where there is a suspected ‘opportunism' behind the registration. In December 2008, the Company names adjudicator made an order against Coke Cola Limited in response to an application by the Coca-Cola Company Limited. Coca-Cola Company Limited asserted that the name ‘Coke Cola Limited' was sufficiently similar that its use in the UK would be likely to mislead by suggesting a link between the two companies.

A challenge relating to a company name being too similar or too like another company name with no suspected opportunism behind the registration, are dealt with by Companies House.

A company may be liable under the tort of passing off if a third party can prove that it has goodwill in its name, that the company is misrepresenting itself as that third party and that damage is caused as a result.

If a company uses a name which is the same or similar to a registered trade mark, the proprietor of the mark may be able to bring an action for trade mark infringement against the company.

The Companies House requirements for changing a company's name have been amended by the Companies Act 2006 and are now more complex - there are 6 new forms and the correct form must be selected.

If you are planning to change your company's name or incorporate a new company and would like to discuss the above in more detail then please contact Catherine Doggett (c.doggett@stephens-scown.co.uk).