Choosing a business name
If you trade in a name other than your own personal one, you must comply with the requirements of the Business Names Act 1985. The purpose of the Act is to make it reasonably easy for people with whom you deal to identify who you really are.
You do not have to register a business name.
Legal disclosure requirements
The owners of a business must display the company name and address (or the name and contact addresses of each of the partners if the business is not incorporated) in a place where customers will see them. In addition, this information must be shown on all business stationery.
Individual owners and partners must be specifically named.
The business address can be the one used for postal correspondence. It is not necessary to display the home addresses of the owners if there is an alternative business address.
Business stationery includes letters, orders, invoices, receipts, and demands for payment. It does not include advertising materials.
You must give a business address where documents can be served. That does not mean you have to specify that documents can be served at the address on your business stationery, unless the business address for service of documents is different from your trading address.
All information can be hand written.
A limited company must display its full company business name outside every office or place of business. This must be conspicuous and legible.
A company must show its full business name on all stationery and financial instruments.
A company must show its place of registration, company number, and address of registered office on all business letters and order forms.
You can read more on disclosure requirements.
There are no provisions for policing individual businesses. As a result the regulatory authorities take action against a delinquent trader only when the fault is brought to their attention - i.e. you complain, they act. The law provides for penalties for failure to comply with the Act, but in practice these are invoked very rarely – usually only in cases involving fraud. A very large number of smaller businesses fail to comply with the detailed rules where it concerns stationery of secondary importance, such as a receipt.
It matters in a dispute
The arena where compliance becomes most important is in the event of a dispute that results in a legal hearing. The dispute may not be about a business name. If however one party can point out that his opponent has failed to comply with any basic legal requirement, then a judge is likely to take this into account in his consideration of the merits of the case generally. Since compliance is, in most cases, simple and inexpensive, all businesses are advised to comply fully.
If a customer or supplier asks for a business name or address that has not been supplied in accordance with the Act, then it must be provided immediately and in writing.
What business name can I use?
Any individual or company can use its own name as the business name. Angela Yvonne Brown can trade as Angela Yvonne Brown, Angela Brown, A Y Brown, and so on.
There is a list of prohibited business names published by Companies House. The make-up of the list is unsurprising. It is designed essentially to prevent a business from giving the impression that it is connected with royalty, government, a profession or otherwise to mislead anyone who may consider dealing with the business.
What about domain names?
Internet domain names were not in general use in 1985, so the legislation makes no mention of them. Be assured however that a domain name is a trade name, and the Business Names Act therefore applies fully. Net Lawman knows of no legal case defining the extent to which the Act applies, but it seems likely that it applies in full to any e-commerce enabled site (because that could be said to be a "place of business").
However, if a business merely has a web site, which constitutes, say, a showroom or advertisement for its products or services, then it is Net Lawman's opinion that the Act is applicable to the same extent as it would be applicable to any other advertising medium. Specifically, the web site should provide all of the information required by the Business Names Act, in a place and form that visitors to the site can find! However, it is unlikely that there is a legal requirement to mention an advertising web site in any place other than on the web site itself.
Before you fix your chosen name
Search at any domain name registrar to check for similar names and to make sure you can register an appropriate domain name for your business based on its trading name.
Look up same or similar company names registered at Companies House.
Check that you have not chosen a prohibited name.
Check that your name does not conflict with a registered trade mark.
Once you have chosen a name, you will want to choose a business structure. If you are not working for yourself as a sole trader, you'll most likely choose between a company and a partnership. This article will help you decide which one is more appropriate.
You also might be interested in reading about which legal documents a new business needs.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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