Choosing a limited company name in the UK

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Introduction

When you start a business and register a company, you must start by choosing a limited company name. Therefore, when you have a business idea, besides setting up a company bank account and finding an accountant, one of the key tasks is to choose a name for your company.

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 a 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 must choose a limited liability partnership name.

In summary, when you pick a unique, clear, concise, but catchy name, this will help you stand out on social media and search engines in the future.

Choosing a company name (UK) -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)

A Trade Mark is another option when you set up a new company. This option is crucial 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, the company registration prevents other businesses from setting up a company with the same, very, or similar name to yours. A business owner will register their trademarks at the Intellectual Property Office, and the application starts at £170 (if accepted). In addition, the trademark will last for ten years and is renewable indefinitely.

When you register a UK limited company with Companies House, it costs £12. Please note that this is suitable for most small businesses, including contractors.

Choose a company name (UK)) -official rules to consider

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

Besides this guide on choosing a limited company name, we have a separate guide which covers how to change your limited company’s name. Please note that this sets out the process to follow when a business owner would like to do this.

Initial thoughts

Please read our first-timer contracting guide if you plan to start contracting via your own company. It is important to note that you must consider certain things when you choose a business name.

As a starting point, you should take some time to research potential names. Please note that 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 choose a limited company name, if you pick ABC IT Services Limited, this may not be suitable for you in the future.

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

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

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

Please note you must also avoid including trademarked words in your business name. For example, ‘Microsoft IT Services Limited.’

In June 2016, a company called Casio Services Ltd (CSL) was 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 word or words 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 name

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

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

Some good ideas

Some initial ideas to consider when choosing a business name could include:

• Your choice will be a unique business name, as two companies cannot have the same name.

• Choose a catchy business name. One way that you could find some limited company name examples is by using a business name generator.

• You could choose a name that represents the quality of your products or services which set you apart from your competitors.

• Make sure that it is easy to spell. Doing this will aid your customers, clients and contacts in the future.

• Make sure it is easy to pronounce, and it will help in the future.

Business name and internet domains

When you are choosing 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, having the same company and domain names 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

When you consider how to choose a business name, it is also worth noting 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.

It is important to note that IR35 has been challenging to apply in practice. Therefore, HMRC could seek easy targets for their IR35 enquiries.

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

The word `consulting’ covers a wide range of areas, and this word along with other variations such as `consultants’ and `consult’ are a common choice. Other alternatives include `Solutions’, `Systems’, `Engineering’ and `Developments’ and having such words in your business name can help to attract your target customer.

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 select a registered office. In addition, you will need to decide who the directors and shareholders are, along with other 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 spell it correctly before you submit your new company application to Companies House.
  • Use a company formations agent. As a result, they will generally 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 yet ready to start contracting or working through it. 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 business 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: August 1st, 2022 / Categories: Starting Up Your Own Company /

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