Choosing a limited company name in the UK

Introduction

When you start a business and register a company you will need to consider choosing a limited company name. Therefore, when you have a business idea, besides undertaking tasks like setting up a company bank account and finding an accountant, one of the key tasks is to choose a name for your company. Importantly, a good idea would be to choose a catchy business name and one way that you could do this is use a business name generator. Once you have chosen your name, this will hopefully work well for you in the future. As a result, it should help to provide some good business opportunities and reach out to lots of new potential customers.

When you are contractor or consultant you may decide to use the word consulting or consultancy in your company. The result of this will be that it will let potential clients know that you are in the consulting arena.

Alternatively, if you set up an LLP, you will need to choose a limited liability partnership name.

Formal processes

There are different formal processes when setting up different types of new businesses in the UK. To summarise, these are:

Register Register
through/with with
Type of business Companies House HMRC
Limited company Yes Done as part of
Companies House process
Limited liability partnership Yes Done as part of
Companies House process
Sole trader No Yes -for personal tax
(Self-Assessment)
Partnership No Yes -for partnership tax
(Self-Assessment)

When you set up a new company, a Trade Mark is another option. This is important if you would like to protect the name. In addition, this is a sign which can distinguish your goods and services from your fellow competitors. Notably, registering a limited company does not protect the name. However, it prevents other businesses from setting up a company with exactly the same or very, or similar name to yours. Trademarks are registered at the Intellectual Property Office and the application will start at £170 and (if accepted). In addition, the trademark will last for 10 years and is renewable indefinitely.

Registering a UK limited company with Companies House costs £12. Notably, this is suitable for most small businesses, including contractors.

Official rules to bear in mind

There are various rules to bear in mind when you consider how to choose a company name. To summarise, these are:

  • The name cannot be the same as or too similar to an existing company. Therefore, when you choose a company name, you can search the Companies House database to see if your name is already taken. Furthermore, the name cannot infringe on any trademarks.
  • It should not imply that your business has a connection with the Government. Furthermore, this includes local authorities.
  • The name cannot be rude or offensive.
  • It must have the required permission to be able to include sensitive words and expressions. To clarify, these include words such as ‘international’ or ‘bank’ or `certified.’
  • You cannot use certain punctuation symbols.

We have a separate guide on how to change the name of your limited company. Please note, this sets out the process to follow when a business owner would like to do this.

Initial thoughts

If you are planning to start contracting via your own company, please have a read of our first timer contracting guide. Important to note, you will need to bear in mind that there are certain things you should look out for when you consider how to choose a business name.

As a starting point, you should take some time to research potential names. Please note, this is because you may trade under this for many years to come. As a further thought, it is also wise and sensible to present a professional image to clients and recruitment agencies.

It could be the case that you may look to do some non-contracting business, through your company in the future. Therefore, when you are choosing a limited company name, if you picked `ABC IT Services Limited’, this may not be suitable for you at that time.

Please note, you can change your company’s name in the future, if you so choose. To do this, you will need to submit a form NM01 to Companies House. In addition, there is also a nominal fee to pay if you do this.

Choosing a business name -avoid using similar names that are already in use

As mentioned, your choice of name should not be too similar to an existing name.

You must also avoid including trademarked words into your company’s name. For example, ‘Microsoft IT Services Limited.’

In June 2016, a company called Casio Services Ltd (CSL) set up as a new company. In turn, Companies House let the name go through.

However, the famous Casio brand felt that the new entity had breached its intellectual property rights. Consequently, they took legal action to force CSL to change its name. As a result, CSL then did. Importantly, this shows that you must take care to research your choice of name. Acceptance of a name by the authorities does not necessarily mean that a business with a similar name could challenge it at a later stage.

Including the word “Limited” or “Ltd” in your company name

It is a legal requirement for private limited companies to include the words “Limited” or “Ltd” at the end of their company name. Furthermore, companies that are registered in Wales can use “Cyfyngedig” or “CFY”.

Please note, there is no legal difference between the complete word “Limited” and the abbreviated “Ltd”. In addition, either of these can be registered -both are interchangeable after incorporation.

Choosing a company name -internet domains

When you choose a limited company name, you should also try and secure the related internet domain names at the same time. When you do this, it will protect your future web presence. In addition, if you have the same company and domain names, it can add to your credibility. As part of this, you can also have your business name within your professional email address. Consequently, this will add to the reputation of your new business.

What’s more, we would advise you to try and secure the .com and .co.uk domains. Furthermore, you can add as many other variants as you wish.

IR35 rules and things to think about

It is also worth noting, when you consider how to choose a business name, that with IR35 so closely attached to the contracting profession, having the words `contractor’ or `contracting’ or `freelancer’ may catch the eye of the taxman.

Important to note, given that IR35 has been challenging to apply in practice, HMRC could seek easy targets for their IR35 enquiries.

Let us assume that you set up a company with the name of `London IT Contracting Limited’. Once your company is set up, you could then draw a modest salary for yourself and take the rest of your income as dividends. In this scenario, it could potentially have an `IR35 status enquiry’ written all over it.

You may, of course, fall outside IR35. However, you do not want to stand out from the crowd, when you can easily avoid doing so.

Company formation

There are several ways of forming a limited company. Besides choosing the business name, you will also need to choose a registered office. In addition, you will need to choose who the directors and shareholders are, along with other various details. When you set your new company up, you have three options:

  • You can do this directly via Companies House. If you do this yourself, please review the name to ensure that you have spelt it correctly, before you submit your new company application to Companies House.
  • Use a company formations agent. As a result, they will normally provide more support than going direct.
  • Ask your contractor accountant to do this for you. When you do this, your accountant will handle the process and send you the official registration documents, once your company is set up.

Final thoughts

You may be thinking about setting up a company but are not quite ready to start contracting or working through it yet. If this is the case, you can set it up and keep it dormant until you start contracting or providing your services. By doing this, you will safeguard the company name. In addition, you will also have minimal administration duties to adhere to each year, until you begin trading.

Link to Contractor Advice UK group on

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: March 28th, 2021 / Categories: Starting Up Your Own Company /

Share This Story, Choose Your Platform!

Leave A Comment