What is a Company Name?
When you decide to incorporate a company with Companies House, one of the first things you’ll need to think about is the company name. The company name is the name you register your business with and is visible on the Companies House website.
Choosing this name can be tricky, it will need to be unique with no other businesses already using it and follow the terms set out by the Companies Act 2006.
For example:
- The company name must not contain any sensitive words or expressions
- Certain characters, symbols or punctuation should not be used
- Appropriate endings such as LLP or Limited must be used
Customers and possible investors will see that you are a legitimate business by having a registered company name.
Take a look at one of our articles that explains the process of choosing your company’s name in more detail. (Choosing a company name for incorporation | Easy Digital Company)
What is a Trading Name?
Companies registered in the UK have the option to trade under a completely different name to the one they originally registered with at Companies House. Trading names are different to a company name because they do not represent your company’s legal identity. A company can have one or many trading names that can be used for commercial purposes or to distinguish one section of a company from another.
The trading name does not have the same protection as the company name. Registering your company name at Companies House means that no other company can operate under that same name, where as the trading name does not have this defence unless a trademark is registered.
The next question then is ‘What is a trademark?’. In the UK a trademark is a way for one company to set their brand apart from another. Once a trademark has been registered you can take legal action against anyone who uses your brand without your permission. You can also sell and license your brand to others.
Your trademark can include any of the following:
- Words
- Sounds
- Logos
- Colours
- A combination of any of the above
Registering a trade mark in the UK only protects your brand in the UK and Isle of Man and involves fees, starting from £170 in the UK depending on circumstances.
Limitations to Trading Names
Trading names do come with their own risks.
Some of the main limitations you should consider are:
- If a company chooses a trading name that is too similar to another’s that has already been trademarked, they may have to pay significant legal costs as a result of infringement. Infringement is where someone uses all or part of your work without your permission. It is important to carry out a search before using your trading name to make sure that it is not already used as a registered trademark or company name.
- As your trading name is not registered as a legal identity, another company could register this name as a limited company and prevent you from using it. Some companies incorporate a company under their trading name and keep that company dormant to prevent this issue from occurring.
- You are legally required to put the company’s registered company name on any business documentation like purchase orders or invoices. The trading name would only go on the letterhead.
Things to Remember
A company name is the name you registered your company with at Companies House.
A trading name, or names, is one used by a company for commercial purposes and is different from the registered name at Companies House.
A trademark is a way for a company to set their products and services apart from another and usually incurs fees starting from £170 in the UK.
If a company decides to use a trading name, they should do a UK trademark and company name search before using it to limit the risks of infringement and fines.
