13 FAQs about choosing a business name.
- What sorts of business names are there?
- What are the main considerations when choosing a business name?
- How can I find out if someone else is already using the business name I want?
- I searched and didn't find anything. Presumably that means I am OK?
- I found a similar name to the one I want, but I'm still keen to use it - is there any way around it?
- If I go ahead anyway, what can happen?
- Do I need to register my name as a trade mark?
- Can I register any name as a trade mark?
- Should I choose a business name that I can register as a domain name?
- Do I need a name I can register at Companies House?
- Are there any words I can't use in my business name?
- The business is going to trade abroad - are there any special considerations?
- What if someone copies the name I choose?
1. What sorts of business names are there?
The owner of a business will often use their own name as its business name - the name it trades with, eg John Smith for a sole trader, or London Washing Services Limited for a limited company.
However, many businesses trade under a separate business name instead. Larger partnerships invariably do this, because a business name made up of all the owners' names would be too long; but sole trader John Smith could also choose to trade as, eg Internet Solutions, and limited company London Washing Services Limited could trade as City Laundries.
Different trading names can be used for different parts of the same business. For example, a building firm might trade using one business name for its building division and another for its building supplies service.
A brand name used for a product or service is a business name, too. For example, Microsoft uses the brand names Word, Excel, Access, Powerpoint, Outlook, etc for its software applications. When choosing a brand name the same considerations apply as when choosing any other business name.
2. What are the main considerations when choosing a business name?
Your business name should help you build up goodwill for your business among customers, suppliers and employees. If you succeed, it could become a valuable asset that you can include in your balance sheet, sell, mortgage to raise money or license others to use.
It should be memorable. Long names, or initials, are often hard to remember. Distinctive names are best, though quirky names like Coconut or Orange can confuse customers, unless you are prepared to promote them hard to establish the market position you want, or the name suits you because you are a creative business.
Another benefit of distinctive names is that they are easier to protect - for example, by:
- bringing a 'passing off' action in the courts (see 6) against anyone who copies it
- registering it as a trademark (see 7), which gives you significant rights against someone who tries to use your name, or a similar one, for their business
A name that is just a description of what you do (eg 'The Card Makers') means people know what you do immediately, and may remember you more easily, but if you decide to change what you do, or expand into a new area, you may have to change your business name, and start building goodwill in the new name all over again. It also makes it harder to register it as a trade mark, as it is just a description of what you do, and not distinctive enough to justify protection as a registered trade mark.
Many businesses with multiple business names use a distinctive word in all of them, with additional descriptive words for different parts of the business. Some brands are very 'elastic' and can be stretched over many different businesses (such as Virgin Airlines, Virgin Money, Virgin Trains, Virgin Mobile, etc). Others are less elastic (so Cadbury is only used for chocolate products such as Cadbury Creme Egg and Cadbury Dairy Milk). But if you get it right, you can develop a 'family' of names that provide reassurance to customers, whichever part of the business they are buying from, and whichever products they are buying.
Business names, especially brand names, can be made even more memorable and distinctive by combining them with, or incorporating them into, designs, graphics, logos or straplines.
Someone buying your business will usually want to carry on using the same business name. Choose a name you are happy to relinquish when the time comes. If your business name is your own name, or some other name you will want to carry on using yourself in the future, this can be a problem.
Finally, your name should not be the same as or similar to a name being used by another business, as you could end up in a costly row over who the name belongs to - especially if the other business is in the same industry sector or geographical area as you (see 6).
3. How can I find out if someone else is already using the business name I want?
Make as many enquiries as you can to check no-one is using an identical or similar name already (including phonetically similar names, eg if you want to use 'Photomagic', check for 'Fotomagic' and 'Fotomagik').
You can check various public registers to see if identical or similar names are already registered. Searching is free - but detailed checking for similar names is a skilled task. Seek help from your lawyers if in doubt. But if there is an obvious problem with another business, these checks can flag it up early, while you can still take control of the situation.
Search the Companies House register on the Companies House website to find out if a business has registered your name, or a similar name, as a UK limited company or LLP name. If it has, you can click on the company number for free access to basic details such as when it was registered, its official address, whether it's trading and when it last filed accounts or a confirmation statement.
You can also search the Intellectual Property Office (IPO) register on the IPO website to find out if a name is registered as a UK trade mark. For European Union trade marks (that can be enforced anywhere in Europe, including the UK), search the European trade mark registry on the Office for Harmonization in the Internal Market (Trade Marks and Designs) website.
You can check for names registered as domain names at the websites of official registries www.nominet.uk for UK domain names (use the 'whois' field in the top right hand corner) and www.internic.com/whois.html for .com domain names. You can find information for other country codes (such as .fr) at www.iana.org.
There may be business or brand names in use in your market that have not been registered - for example, unincorporated businesses. Search for identical or similar names on the web using search engines like Google. Check trade directories, trade associations and trade fairs. Make enquiries of suppliers and others who know your intended sector. If in doubt, take legal advice.
4. I searched and didn't find anything. Presumably that means I am OK?
A clear check does not mean your name is available. There may be business or brand names in use in your market that have not been registered - for example, an unincorporated business name - or are not on the web or in directories, etc. The risk of that depends on your industry sector and your knowledge of it. If in doubt, take legal advice before you go ahead.
5. I found a similar name to the one I want, but I'm still keen to use it - is there any way round it?
If you find a similar or identical name has already been registered, all is not lost.
If the name is registered as a limited company name, the company may be dormant, ie not trading. That means the name may not be in commercial use and you may be able to start using it, irrespective of the registration. If it is identical to the name you want, adding a suffix, such as XYZ (Stockport), or ABC (Exhausts), can differentiate your name from that of the other business - but it is essential to take legal advice before ignoring a registered name.
If the name is registered as a trade mark, but is not being used, you can apply to have it revoked. Take legal advice.
If a domain name is not being used for a website or email address, it has probably been registered as a protective measure. If you want to use that name as a domain name, the owner may be prepared to sell it to you. Or you may be able to register a similar name provided that it will not lead to confusion between your business, brand or product and those of the owner of the similar domain name.
Always take advice before approaching a name owner to negotiate. If you are a large or well-known business, that's an incentive to the other side to put the price up. Ask your professional advisers to act as your intermediary, and keep your identity secret, if that improves your negotiating position.
When negotiating, you'll invariably find that the other side has just spent large sums on advertising, stationery, repainting vans, etc, in relation to the name you want. Should you compensate them for these? Your advisers will know the tricks of the trade, to spot and challenge dubious claims successfully. Name disputes require judgment and experience - take legal advice to decide on the action to take.
If you think the owner of the domain name registered it deliberately so you would have to buy it, or to damage your business, you may be able to use one of the "domain name dispute resolution procedures" to have the registration cancelled or suspended. Which procedure you can use depends on the domain - for example, the procedure for .uk domains is run by Nominet. Take legal advice.
- you find that a limited company name has been registered at Companies House that is the same as or similar to a name you were already using when it was registered
- you think the registration was so you would have to buy the name, or to damage your business
you may be able to apply to a Company Names Adjudicator to have the company name changed. Your own name does not have to be registered as a limited company name before you can do this, but it must be a name that has goodwill attached to it in your marketplace.
6. If I go ahead anyway, what's the worst that can happen?
Business names are automatically protected under the law of 'passing off'. The court will order you to stop, and to compensate the owner of the same or a similar business name for any loss they have suffered, if
- they are already using the name that you want, or one like it
- the name has developed a reputation in the marketplace, so goodwill is attached to it
- consumers are misled (or might be misled) into thinking that you are the same business (ie you are 'passing off' your goods or services as being connected)
If you are both in the same industry sector, or trade in the same geographic area, you are at greater risk of a passing off action.
If the other business has registered the name you want, or one like it, as a trade mark, it is in an even stronger position if you are using the name in relation to similar goods and services. There is no need to prove anyone is likely to be misled.
If there is a design element in a name, like a logo or graphic, it may be a 'literary creation' and therefore automatically protected under copyright law, too. The other business can take you to court for infringing their copyright if you intentionally copy it, or a significant part of it. If you use it on your goods you can be forced to stop, hand them over, pay damages and account for profits you have made. Depending on the circumstances, it may also be a criminal offence.
7. Do I need to register my name as a trade mark?
You need to balance the costs of applying to register your name as a trade mark at the official registry - the Intellectual Property Office (IPO) - (and renew it every 10 years) against the advantages of registration. The advantages can be significant, and the costs low.
Registration gives you exclusive rights to use the name in the UK in relation to the classes of goods or services specified in your registration. (There are 45 classes to choose from and you can, of course, register under more than one class, although that will put your registration fees up.) If anyone tries to use it, or a name like it, in relation to goods and services in those classes, you can stop them and force them to deliver up any goods that have your mark on them. You can also recover damages and an account of any profits they have made.
Registration means the name is easier to sell ('assign'), and you can usually ask a higher price for it than an unregistered name. It is also easier to license someone else, such as an agent or distributor, to use a registered trade mark than an unregistered name. You can even insure it.
If you decide to register, UK registry fees are £200 to apply in one class, and another £50 for each further class (with a discount of £30 off the total cost if the application is made online). If you use the IPO 'Right Start' service you only pay £100 upfront (and £25 for each further class) to make an online application. The IPO will then examine your application and give you an indication of whether they think it will succeed. If not, you can withdraw without paying any more. If you proceed, you then pay the remaining £100 (and £25 per further class).
Professional fees are additional, depending on the work involved - legal advice is recommended.
8. Can I register any name as a trade mark?
No. You can apply to register "any sign or symbol that allows your customers to tell you apart from your competitors". It can be a name, logo, slogan, domain name, shape, colour or sound, or combination of those. But to be registered as a trade mark, your name must:
- be distinctive for the goods and services you apply for
- not be similar or identical to any earlier marks for the same or similar goods and services
- not be deceptive, or contrary to law or morality
Trade marks are territorial. A UK-registered trade mark only protects your name in the UK. For protection abroad, see 12.
You must continue to use your trade mark, or another business can apply to the Intellectual Property Office to have it revoked. A UK trade mark must be renewed every 10 years.
9. Should I choose a business name that I can register as a domain name?
Registering a domain name allows you to use it as your website address and in your email address, but does not give you definitive 'ownership' of the registered words. For example, if you register a .co.uk domain name, someone else can register a similar .co.uk name, or an identical .com domain name. Registering does flag up to the world that you have an interest in that name.
10. Do I need a name I can register at Companies House?
If you are going to form a limited company with your business name, and trade through it, it will appear on the register at Companies House in any event. If you do not want to trade through a limited company, you can still register a company name as a name protection measure, but keep the company dormant.
In either event, registration does three things:
- the register at Companies House is public, so registration alerts others to the fact someone else has an interest in the name, so they may make enquiries before using it themselves
- it stops anyone registering the identical company name at Companies House
- if someone registers a similar company name at Companies House, you can ask the Registrar of Companies to make it change its name, provided you do so within 12 months
Registration at Companies House does not, on its own, entitle you to the name generally.
11. Are there any words I can't use in my business name?
You cannot use a word that is offensive or use of which would constitute a criminal offence. You cannot use a name that would give "so misleading an indication of your activities" that it would mislead the public.
There are words that you cannot use unless you can justify them. They include British, International, English, Association and Group. There are other words that you cannot use unless you have written permission from a specified body. For example, you cannot use Royal, King, Queen or Prince unless you have a letter from the Department of Constitutional Affairs. You can't use offensive words, or words that imply a connection with central or local government or a public body unless you get permission from the Department for Business, Energy & Industrial Strategy (BEIS). Use of some words, such as 'Solicitor' or 'Patent Agent', is a criminal offence if you do not have the relevant permission. Lists of such words, and the bodies whose permission is needed in each case, is in the Companies House guidance 'Incorporation and Names' which you can download from the Companies House website.
Take advice before using a name that is identical or similar to an existing name (see 6).
If the name you are choosing is to be a limited company name, there are additional rules. A limited company name can only be registered if it is made up of permitted characters, signs, symbols and punctuation. One consequence of these rules is that characters in lower case, ligatures (where you make a new character by combining two or more letters), accents and other diacritical marks (such as umlauts or cedillas) are not permitted in a company name.
The permitted characters, signs or symbols include, for example:
- capital letters of the Roman alphabet
- the @ symbol, the £, € and $ signs, the & sign, etc.
- the numbers 0, 1, 2, 3, 4, 5, 6, 7, 8 or 9
- full stops, commas, colons, semi-colons or hyphens
- punctuation such as apostrophes, exclamation marks, etc (but only in certain forms)
A limited company name can include signs and symbols such as the + * and % signs, but not as one of the first three permitted characters of the name. Overall, a company may not have a name that exceeds 160 permitted characters (including blanks between characters).
The limited company name must not give an inappropriate indication of the type or legal form of the company. For example a company name must not include (except at the end) words like 'limited' and 'public limited company' and their Welsh or Scottish Gaelic equivalents, or any abbreviation of them. This prohibition extends to any expression or abbreviation which is 'similar' to such a word. An expression or abbreviation is similar if:
- one or more characters has been omitted
- one or more characters, signs, symbols or punctuation has been added
- each of one or more characters has been substituted by one or more other characters, signs, symbols or punctuation
in such a way as to be likely to mislead the public as to the legal form of a company or business.
12. The business is going to trade abroad - are there any special considerations?
Consider registering a trade mark in each territory. The protections you get are broadly similar to those you get in the UK if you register a UK trade mark (see 7). Or, if you are only going to trade within the European Union, registering an EU trade mark gives you EU-wide protection.
Alternatively, you may be able to register under an international treaty, like the Madrid Protocol. Your trade mark can then be enforced in all the countries that have signed the treaty.
Beware names that mean something rude, inappropriate or comic in another language, unless that is what you want.
If you are thinking of appointing an agent or distributor, you need advice on the terms of the agreement you will enter into, particularly which law will apply if there is a dispute. Also, the terms upon which your goods or services are sold may need to take local laws into account.
13. What if someone copies the name I choose?
Companies House and the Intellectual Property Office offer monitoring services that alert you if the same or a similar company name or trade mark is registered. Similar services are operated by some foreign registries. Private businesses offer a package of monitoring services, monitoring both official registries and also other sources, such as the web, regularly checking for same or similar names across various search engines. Your lawyer can advise on what's available and which is right for you.
You will need to take prompt action if a name is reported that you object to.
Negotiation is often the best solution but you can end up in a formal dispute. If you do, be careful. You'll often have multiple, overlapping remedies. For example:
- there is a procedure for objecting to the Registrar of Companies if a similar company name to your company name is registered (see 10)
- there is a procedure for applying to a company names adjudicator to have a limited company name removed from the Companies House register because either it is the same as a name (whether registered as a company name or not) in which the applicant has goodwill, or it is so like the applicant's name as to be likely to mislead by suggesting a connection between the company and the applicant (see 5)
- there is a quick, easy remedy in cases of flagrant domain name abuse ('cybersquatting'), eg where a name has been registered deliberately to sell to you
- you can bring an action in the Courts for trade mark infringement (see 7 and 8) or for 'passing off' where you have no registered trade mark (see 6)
Different criteria apply in each case. You need expert legal advice and a risk assessment to make sure you choose the right remedies to pursue, and that you co-ordinate them effectively. If you make the wrong choices, the dispute can be longer and nastier than it needs to be.