Nothing brings home the feeling that your business is really happening more than deciding on and then registering your company name. However, you’ll need to practice due diligence and adhere to the rules and guidelines to ensure you settle on a positive and representative name.
How to set up your business
If you’re setting up your business as a sole trader then there is no legal obligation to register a business name—although you will need to register for self-assessment to pay tax within three months of when you began trading. If you set up as a sole trader then only your profits are taxed as income, but you are also liable for the company’s debts, and responsible if it fails.
Alternatively, you may choose to set up as a limited company. If so, you will need to register with Companies House, and you will be required to have a business name.
There are pros and cons to setting up as a sole trader or as a limited company, but taking the time to research which would best suit your business and your circumstances will pay you dividends down the line, as your business’s legal status has implications for tax and operations.
How to choose a company name
Deciding on the name under which to operate your business is not as simple as you might think. There are rules to follow, but ensuring you stick to them will save you time and hassle in the future.
And remember, your registered company name does not need to be the name under which you trade. The latter is known as a business name or trading name.
There must be no other company registered with Companies House operating under your chosen name. A quick search using their company name availability checker will enlighten you as to whether your preferred name (or any close permutation) is already in use in the UK.
Your application for a company name will be rejected if Companies House decide it is confusingly similar with another existing company.
Avoid complexity or provocation
Be cautious when it comes to special characters, punctuation and words with sensitive connotations. And think about spelling and pronunciation—remember, you are going to be saying this name multiple times a day over the phone, and having to continually repeat it to prospective clients won’t create a great first impression.
You should also steer clear of any implicit suggestion that your company is affiliated with the government or local authorities, unless you have specific prior permission to do so.
Similarly part of your name is determined by the legal status of your company and you cannot include words or abbreviations that apply a different status to the one the company has; this includes Limited, Public Limited, Ltd, PLC, etc.
You are also inhibited from including:
- the words Limited, British, Accredited and Authority
- the initialisms LLP and PLC
- the phrases limited liability partnership and public limited company, unless they are precisely true and representative of the nature of your business
Give the right impression
Your company name is the very first encounter a new customer has with your business and brand, so you need to make sure it accurately conveys what you do, or is at least memorable if you’ve chosen a name that cannot describe your business (such as if you’ve opted to operate under your own name or an unrelated word).
When the time is right, it can also help give your business that professional look by opening a business bank account to manage your accounts. Rather than managing them through your personal current account. Read our business bank accounts guide to find out more.
Think about the future
If you’re in this for the long haul, consider whether your business is likely to expand. Might you be offering additional services down the line? If so, will they contradict or confuse the company name you have chosen? And what about overseas trading? Is there any chance your name could be misinterpreted or misconstrued in another language—or even translated directly into something undesirable?
Make sure to decide on a name that won’t narrow your growth—and don’t include words or phrases that could easily seep out of common usage. And finally, you may wish to retain the legal rights to your business name so that it can be used only in explicit association with your company. If so, you will need to register your business name as a trademark.
One step closer to making your business goals a reality
Choosing and registering your company name breathes life into your long-awaited dreams of starting your own business. Take time to really consider every aspect of what your company name means, how it sounds, how it looks and how it may be perceived by a wide audience—both at home and abroad.