You’ve got a great business idea, some startup funds and dreams of world domination. Now you only need to choose a business name that sticks. A name that is unique, embodies your brand values and perhaps shows a bit of personality. But also something that’s clear, memorable and makes people take your business seriously.Sounds like a tall order, right? But that’s not all. You'll need to contend with the sordid HMRC rules on business naming.Luckily, we’ve got some tips and tricks to help make the process go smoother.
Choosing a business name: What’s the difference between a legal name and a trading name?
First things first, we need to make a serious distinction. One between a legal name and a trading name.Your business’ legal name is its official name. You must always use it on official documents such as contracts, invoices and tax returns.Also, your business’ legal name will depend on what kind of business structure you use. In some cases, it must be your name and surname. But even where you can choose a different legal name, HMRC has rules you need to follow.In contrast, a trading name is a name familiar to your customers. The trading name could be the same as your business’ legal name or completely different. You won’t be surprised to hear that HMRC has rules on trading names, too.
How do I choose a business name as a sole trader?
If you plan to register as a sole trader, your business’ legal name must be your name and surname.That said, you can trade under a different name, as long as you display your legal name and surname on official documents. Typically, you’d do this by writing [Your name] T/a [Your trade name].So, if you’re John Fitzpatrick, but you trade as Magic Bookshop, you’d write John Fitzpatrick T/a Magic Bookshop. T/a means ‘trading as’.What you choose as your trading name is up to you. However, HMRC does have some rules. In particular, your trading name can’t:
- Include the words ‘limited’, ‘ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’.
- Use ‘sensitive’ words or expressions without permission or suggest a connection to the government. HMRC has a list of these ‘sensitive’ words.
- Be offensive.
- Be the same as a registered trademark. ‘Same as’ names include branding where the only difference is added punctuation or special characters such as a + sign. You can check this on HMRC’s website or via the Intellectual Property Office’s online journal.
How do I choose a business name as a partnership?
If you decide to register a partnership, you have two choices. You can either use the partners’ names as your legal name or choose a different name. However, you must include all the partners’ names on official paperwork.As is the case with sole traders, the choice of a business name is up to you. However, it can’t:
- Include the words ‘limited’, ‘ltd’, ‘limited liability partnership’ or ‘llp’ (unless it’s a limited liability partnership), ‘public limited company’ or ‘plc’.
- Use ‘sensitive’ words or expressions without permission or suggest a connection to the government. Again, check out HMRC’s list for this.
- Be offensive.
- Be the same as a registered trademark.
How do I choose a business name as a limited liability company?
Decided to incorporate and do business as a limited liability company? Then you’ll need to choose a legal name.Your company’s legal name:
- Can’t be too similar to another company’s name.
- Must include the word ‘limited’ or ‘ltd’.
- Can’t be offensive or use ‘sensitive’ words without permission.
- Can’t be the same as a registered trademark.
You can also choose a trading name if you’d like (more naming pressure!). This name must follow the same rules as a sole trader and partnership trading names.
Tips on creating a great business name
Coming up with a business name can seem like a tall order. However, here are some basic tips to help you get started:
- Think about your business and what you’d like to convey about it. What do you do? And what are your values?
- Spend some time brainstorming different words. There are no right or wrong answers. The point is to come up with as many different names as you can. A thesaurus can help with this.
- Pick one or two names you like best and spend a few days living with them to see if they stick. Avoid names that are too ‘clever.’ It’s better to be clear so that customers will get you immediately.
- Once you’ve decided on a name, run a Google search to find out if anyone’s using it. It’s also worth checking the National Business Register and HMRC’s company name availability checker.
How to protect your business name
Choosing a business name is hard work. So, once you have one you like, you may want to make sure no one else can use it. You can do this by registering your business name as a trademark.To register your name as a trademark:
- Find out if you qualify.
- Make an application online. You’ll need to pay a £100 fee, plus an extra £25 for each ‘class’ you want to register your trademark under.
- If someone objects to your registration, you’ll need to respond.
- That’s it. Once your trademark is approved, no one else will be able to use your business name in the UK without your permission.
