Company name rules explained

When you set up a business, it’s important to choose a good company name. After all, it will be an integral part of the brand you want to build. But did you know that there are certain rules that restrict what you can call a company? And were you aware that Companies House now has new powers to challenge company names?

Powers to challenge a company name

In October 2023, the Economic Crime and Corporate Transparency Act 2023 came into force. This piece of legislation gave Companies House the power to reject an application to register a name when it has reason to believe the name:

• Is intended to facilitate fraud
• Comprises or contains a computer code
• Is likely to give the false impression that the company is connected to a foreign government or an international organisation whose members include two or more countries or territories (or their governments)

Companies House can also tell companies to change their names in certain circumstances. For example, it can do this if a name is being used to facilitate fraudulent activity. If Companies House directs you to change a name, you have to do so within 28 days. If you don’t, you will commit an offence. Furthermore, Companies House can then change the name itself. It might do this by changing the company name to its registered company number.

More company name rules

While Companies House now has stronger powers over company names, there have long been rules about naming companies. The principal rules include the following:

• ‘Same’ names. A company name can’t be the same as another registered company.
• ‘Same as’ names. A name can’t be the same as another company’s, with a minor difference such as certain punctuation, certain symbols such as the + sign, or words or characters that are similar in appearance or meaning to another in the existing name.
• ‘Too like’ names. Names mustn’t be too similar to existing ones. Companies House gives the example of ‘Easy Electrics For You Ltd’ as being too like ‘EZ Electrics 4U Ltd’.
• Offensive names. A name cannot include offensive words or phrases.

There are also quite complex rules governing the use of sensitive names. Let’s look at these in more detail.

‘Sensitive’ names

You can’t register a company name with ‘sensitive’ words or expressions. These include names that:

• Suggest business pre-eminence, a particular status, or a specific function – e.g. names that include words like ‘British’, ‘Tribunal’ or ‘Institute’.
• Imply a connection with the UK government, devolved administrations or local / public authorties.
• Include word(s) that represent a regulated activity
• Include word(s) whose use could be an offense.

There are also many sensitive words that you need prior approval to use in a business name. These include things like ‘Fund’, ‘Health Centre’, ‘Police’ and ‘Royal’. You can find a full list of these sensitive words here.

Limited / Ltd

It’s also useful to note that, in most circumstances, a private company will need to use Limited or Ltd in its name. (In Wales, you can use ‘Cyfyngedig’ or ‘Cyf’ instead).

There are some exemptions. You can apply for an exemption if your articles of association:

• Make clear that the objects of the company are the promotion or regulation of commerce, art, science, religion, education, charity or any profession that is incidental or conducive to those objects.
• Require the company’s income to be applied to promoting its objects.
• Prohibit the payment of dividends or any return of capital to its members.
• Require assets to be transferred on winding up, either to another body with similar objects or one with charitable objects.

Need help registering a name?

As you can see, it can be a bit of minefield choosing a compliant company name. However, if you use our company formation service, we’ll not only help make sure that your name will be accepted, but we’ll also advise you on the best structure for your business. Get in touch today to learn more.