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This guide will look at things to consider when coming up with names for your business, as well as the right trading status for you.
Deciding on a name is one of the first decisions you’ll need to make when starting a business. The right name can make an important contribution to building your business’s profile and helping it succeed.
Your ‘business name’ is the name you choose to trade under.
There’s no need to register your business name, but it must comply with Business Names legislation. In contrast, you must register your company name (i.e. registered name) at Companies House and comply with the Companies Act legislation. For more guidance on names visit Companies House.
You can check no one else is already using the name you want to use by consulting the following:
There’s a danger in selecting a name that’s easily confused with an existing business in the same area or same line of business. It can be confusing for you, the other business and your customers. If conflicts arise, the other party could take you to court to force you to select another name.
A business name informs people and adds life to your business profile and image.
Try asking these questions when thinking about your name:
Certain names will position your business as small, for example ‘Dartmoor Data Services’. This might work if you want to be seen as a local business that delivers a personal service. It may not be helpful though if you want to expand your business across a wider geographical area.
Using a word like ‘International’ in your name can imply size and make your business look more important. However, if you don't trade internationally, you could mislead people and attract customers you can’t help.
If you register your name as a trademark, it is easier to protect your rights. Although you should note a mark is protected for a set period of time and needs regular renewing. Find out more from the UK Intellectual Property Office.
Once you’ve started trading under your business name, do occasional checks to protect it. Make sure no one else is starting up, nearby or in the same line of business, using a similar name.
When you set up, you need to choose between being a sole trader, a partnership or a limited company:
A partnership agreement is a legal document that dictates that a business will operate under two or more people.
If you are planning to run your business with another person, it is sensible to have a written partnership agreement (even with a spouse) and then have a solicitor check it.
These are a cross between a partnership and a limited company. They allow you to operate like a normal partnership but your liability is limited to how much you have invested in the LLP. If you choose to be an LLP, you must register it with Companies House.
This means forming a company. There are different sorts of companies, defined by their investors (for example a private company, a public limited company, etc.), but the main advantage to incorporating a business is that your liability is limited. As a sole trader, you take on all the liability of the business. However, when you are incorporated, each of the individual shareholders has their liability limited to the amount they have invested in the business.
A limited company can stay in business even after the resignation, death or personal bankruptcy of either its management or shareholders. It’s also an effective structure if you’re planning to expand, since it is easier to raise capital from outside investors by selling shares. However, remember company directors have certain duties and if you fail to fulfil these it can result in fines, personal liability, disqualification and even imprisonment.
For more information on becoming a director, you can look at this helpful guide.
Practical guides to support you in developing your business - from starting-up and managing it day to day, to growing and trading internationally.
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