Changes to rules for Company and Business Names
From: Paul Moulding
Outcome of the Red Tape Challenge consultation on company and business names.
The UK government response to the Company and Business Names: Red Tape Challenge consultation was published on 4 October 2013.
The consultation sought views on the future of names regulations in general and invited comments on the options for improving and simplifying them. It considered the need to maintain the current regulations which, primarily, set out rules regarding ‘same as’ names and ‘sensitive’ words and expressions.
When the changes apply
The regulations came into force on 31 January 2015.
The regulations concerned are:
- The Company, Limited Liability Partnership and Business (Sensitive Words and Expressions) Regulations 2014
- The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2014
Fewer words are now disregarded for the purposes of deciding whether one name is the ‘same as’ another on the register to allow more choice and make name swaps within groups of companies easier – the words (and their Welsh equivalents) to be removed include:
Updates to the list of permitted characters, signs, symbols and punctuation to include accents and other diacritical marks.
Amendments to the list of expressions to be disregarded for the purposes of ‘same as’ (including their Welsh equivalents) are:
- ‘& Co’
- ‘& Company’
- ‘and Co’
- ‘and Company’
The list of words and expressions now disregarded includes where they are used with brackets, meaning a name which was previously not the ‘same as’ because of the inclusion of brackets is now treated as ‘same as’.
Widening of the ‘same as’ consent provision now makes it easier for companies in the same group to grant permission to register a proposed name.
Amendments to trading disclosure requirements now means that any company located in an office or other location occupied by 6 or more companies may make its registered name available for inspection on a register.
There a fewer ‘sensitive’ words and expressions. The list (and where applicable Welsh and Gaelic equivalents) no longer includes:
- data protection
- human rights
- pregnancy termination
- rule committee
- United Kingdom
Radical changes to the company name rules come into force on 31 January 2015
There are quite radical changes in the two main areas that have, up till now, made it difficult to register certain names.
- Sensitive words
It has traditionally been held that the use of certain words in company names needs to be controlled to prevent a company effectively claiming itself to be something it’s not. Today’s list includes words such as “National”, “International, “European”, “Group”, “Holdings” and many more. To be successful with one of the listed words, you currently need to supply some sort of evidence. As at today if you want to form a company with ‘group’ in the title, you have to supply the details of two associated companies. For “holdings” you have to name at least one subsidiary company. For ‘national’ you need to prove pre-eminence in your field.
Whilst the general principal is being retained, certain words are being dropped. From next Monday, “Group”, “Holdings”, “National”, “International”, “European”, “United Kingdom”, amongst others, will be not subject to any test. “National” and “International” have always been quite difficult to get through but from next week it will be a lot easier.
Likewise there will be a lot more ‘holding’ and ‘group’ companies in the future.
- “Same as” names
The rules on “same as” names had a shake-up in 2009 when several extra phrases and words were thrown into the ‘disregarded’ mix and some things, whether by accident or design, were omitted. Under the new rules, we will revert to the pre-2009 system whereby “and Company” was ignored when considering name identicality. Similarly, you will no longer be able to put brackets around a word to circumvent the system. The good news however is that most of the controversial words are no longer being disregarded, ie Exports, Group, Holdings, Imports, International and Services.
From 31 January 2015 we can look forward to a little less paperwork during the incorporation process but there will soon be a lot more companies out there who may not be quite what you expect.
Although the rules are being simplified somewhat, there are still pitfalls that need to be avoided. Please contact us for help and advice.