Simplifying business names legislation

Simplifying business names legislation

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Author: Sian Sadler

New regulations coming into force on 31 January will simplify requirements relating to company and limited liability partnership (LLP) names.

Part of the government's Red Tape Challenge, the new legislation reduces the regulatory burden surrounding company names and provides more flexibility on the types of names which can be registered.

During the consultation process, there was wide support for containing the rules relating to names in as few statutory instruments as possible. The new legislation therefore replaces several existing sets of regulations, consolidating the requirements into the following:

  • The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015 - which introduces the use of new characters, makes changes to the 'same as' rules and amends the trading disclosure requirements
  • The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014 - which reduces the list of words and expressions for which companies and LLPs need approval to use in their name 

More characters

Under the current legislation, company and LLP names are limited to the use of letters from the Roman alphabet and a small number of additional characters. In some cases this has meant that preferred business names were unable to be registered, resulting in the use of separate, but confusing, business and registered names.

Companies House has confirmed that it is able to process a wider range of characters on its systems and the list of permitted characters is therefore being extended to include accents, diacritical marks and ligatures.

'Same as' names

Groups of companies (and LLPs) will welcome the news that the 'same as' rules have been amended to reduce the list of words and expressions which must be disregarded when considering whether a name is the 'same as' a name already on the register.

Previously, the 'same as' rules caused difficulties when attempting to register names within a group structure. For example, 'Jumpers International Holdings Limited' would have been regarded as the same as 'Jumpers International Limited' and would not have been permitted. The removal of 'group', and 'holdings' from the list will make it easier for groups of companies to register names which reflect their structure.

Other words which have been removed from the list include 'export', 'imports', 'international' and 'services'. In addition, and in order to correct minor loopholes, new words have been added. For example, 'Stone Company Limited' will now be regarded as the same as 'Stone and Company Limited'.

Sensitive words

The list of words which require approval before use has also been reduced. Words such as 'European', 'international' and 'national' no longer require consent from relevant government departments.

Display of business names

Where at least six companies (or LLPs) operate from, or are registered at, one location, it will no longer be necessary to display details of all companies at that location. The new regulations will no longer require the information to be displayed at all times and will permit the information to be held on a register and made available for inspection on request.

Comment

Relaxation of these rules may well prompt a rush to secure new names. If you require advice in relation to registration of new, or changes to existing, company names, please get in touch with Siân Sadler.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the author

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Sian Sadler

Director, Company Secretarial

03700 86 8440

Siân is a director in the corporate team in Milton Keynes, and is head of the national company secretarial team. She provides advice to a wide range of clients, both small and large, and to international clients who have companies in the UK.

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