How to register a company name UK according to Companies Act?

25 Oct

At the time of register a new company UK certain documents have to be submitted to the registrar. These documents include relevant information regarding the company that has to be registered. Such as the status of that company, details of the initial subscribers of the company and the share capital if the type of company requires it. The name of the company is also one of the important part in company registration. It is not a simple task to select the name of the company. As this task may be subjected to different rulings. Hence, the selected name has to abide by certain requirements. These requirements have been specified in different versions of Companies Act. This article discusses the former rulings of Companies Act 1985 and the rulings that are provided by the latest version of Companies Act i.e. 2006 version.

Company Names in accordance with the 1985 Act

To know how to register a company name UK, the best way is to go through the regulations given by the Companies Acts. Companies Act 1985 contains a detailed set of rules for company names.

Name in the Memorandum

When one is to register company in London or in any other city in UK, the name should be decided and submitted to the registrar. The name may be mentioned in the memorandum of the company. Section 25 states about the names of different forms of companies. The rulings are as follows:

  • In case of public companies, the name should have the part “public limited company” in it at the end or for a company registered in Wales, the name should include Welsh equivalent “public limited company” in it at the end.

If the company is not public, but is limited by either share or guarantee, the name should end with “limited”. However, the following conditions are an exception:

  • The name is subjected to the rulings mentioned in section 30, stated later in the article. Hence, for ltd UK registration, the company’s name may or may not include limited or ltd as the last word.
  • The company is registered in Wales so the name will end with the Welsh equivalent of limited.

Restricted Registration of Certain Names

Section 26 states different circumstances when a company name will not get registered under this Act. The following names will not get registered by the registrar:

  • The name that ends with words other than limited, unlimited, public limited company, or their replacements in Welsh.
  • The name that ends with any abbreviation apart from the abbreviations of previously mentioned terms.
  • The name that includes “investment company with variable capital” or the same is stated but in Welsh.
  • The name is already registered in the record of the registrar.
  • Any name that seems to create criminal offence or is offensive in any other manner under the views of Secretary of State.

The same Section informs that certain names cannot get registered unless they are ratified by the Secretary of State:

  • If the name is considered by Secretary of State as giving an impact that the company has some kind of link with Her Majesty’s Government. Or it gives an impression that any domestic power as defined by the Local Government Act, is associated with that company, the Secretary of State will have to approve the name.
  • If the name includes any word that is mentioned in Section 29, the Secretary of State will again have to give its approval.

Alternative Ways of Naming the Companies

Section 27 discusses the alternatives ways in which the name of the company can be arranged. For instance, instead of using full words such as limited, unlimited etc. their abbreviations can be used. Further the Section provides the possible abbreviations of each type of company, both in English and in Welsh. Moreover, it states that if under provision it is a necessity to exclude the status of the company, the abbreviation of the status will also not be included in the name.

Alteration of the Name

The regulations for changing the name of the company are outlined by the 28th Section of this act. According to this section, the following rules hold:

  • The change of name of the company can be done by passing a special resolution.
  • The Secretary of State will give a written order to alter the name of the company in a given period of time, if the name seems to the Secretary of State too alike to any registered name or is exactly same to either any registered name or any name that should have occurred in the index of registrar at that time.
  • When the Secretary of State feels that the registered name is giving any information that is not related to the company or is a source of misguidance or misassumption about the company’s objectives, it may order the company, within the 5 years after the registration of that company to change its name before a specified deadline.
  • The company can get an extension in the deadline for altering its name from the Secretary of State.
  • If the company fails to obey the orders given under this section, it will be liable to fine.
  • After the company passes the resolution to change its name, the registrar has to change the name in the documents and submit a certificate of incorporation with the changed name. The name will become effective since the date of issuance of the certificate.
  • Altering the name of the company as per this section does not alter any rights or regulations that are to be observed by that company. If there is a lawsuit against the company before the alteration of the name, it will continue in the same manner after the name is altered. However, the company will be addressed with an altered name.

Name of a Company and its Rulings

According to Section 29 of this act,

  • The Secretary of State can specify words that when used in the name of company may require the approval by the Secretary of State. Secretary of State may also specify any department of government as relevant to the name of the company.
  • If any company intends to have a name related to the department specified by the Secretary of State, any objections regarding the name should be mentioned in a written form and should include any reasons for the objection on incorporation of such a word in its name.
  • The person who requests the government department for the proposal of the name, should submit a written statement to the registrar which mentions that the request has been made and a copy of the response of the government department should also be submitted to the registrar if any response is received.

Situations where incorporation of limited in the name does not remain a necessity

In case of ltd UK registration, there are certain exemptions that may be given to the company if it is found eligible for them. As mentioned in Companies Act 1985 section 30, the name of any limited company may or may not have limited as an ending word. This exemption is given to some of the companies to exclude limited from their names.

  • A company that is limited by guarantee and is private as well can have the option of not placing the word “limited” in its name.
  • Similarly, a company that had the status of a private company having limited shares on 25th of February 1982, and was registered with a name excluding “limited” and was licensed under the 1948 version of Companies Act will also get this exemption.

However, in both the above mentioned cases, the companies have to fulfil certain obligations to become eligible for this exemption. These obligations are as follows:

  • The company has goals that are related to promoting either of these topics:
  • Commerce
  • Art
  • Education
  • Science
  • Religion
  • Charity
  • Any other profession
  • The company is eligible for not including limited in its name when its memorandum or constitution:
  • Demands that any profit gained by the company must be used for the purpose of promoting the company’s objectives.
  • Does not allow the company to distribute its dividends amongst the members.
  • Orders the company to transfer its assets at the time of liquidation to any other body that works for the same purpose as the company or works for the purpose of charity or anything related to the promotion of charity. Moreover, it is not necessary for that body to be a member of the company.
  • The above mentioned requirements must be fulfilled and a statement that declares the fulfilment of those requirements should be sent to the registrar. He will then register the company without the name including “limited”. If the statement is not provided to the registrar, he is at liberty to reject the request of registration of that company.
  • Further this section mentions about the form of statement that has to be submitted to the registrar.
  • It should also be noted that any company that has been entitled to exclude the word “limited” from its name and makes use of this exemption as well, is also allowed to get exemption from the requirements mentioned in this Act regarding the publication as well as exempted from submitting the members’ list to the registrar.

Section 31 further adds to the provisions of exemption from the use of “limited” in the name of the company. It states that:

  • If any company does not use “limited” in its name and is also exempted from doing so, it will not be allowed to alter its memorandum or constitution to prevent from bringing itself into conformity with the requirements of eligibility for the exemption.
  • If any company pays it dividends to any of its member, or spends its profits on any reason other than the objective’s promotion or works for any other objective other than those specified in Section 30, the Secretary of State will prescribe a specific duration to the company within which it will have to change its name.

Ruling in Companies Act 2006 for Company Names

This version of Companies Act, brought changes in the provisions that deal with similarity of names. A process of adjudication of company name was presented in this act. The process starts with an application that has to be submitted to the person who is entitled for performing the task of adjudication of company name. The objection must be stated in the application. Section 69 of Companies Act 2006 provides two possibilities that may lead to the application:

  • If the name is exactly same as that linked with the goodwill of one who applies for the application.
  • If the name is not exactly same but similar to an extent that it may create a confusion if used in UK. And it may wrongfully promote the concept that the company and the applicant are connected in some way.

If any of these reasons are fulfilled the application will get accepted as long as the alleged company fails in arranging any defence from the list given in Section 69(4).

Other than the mentioned regulations, Companies Act 2006 also provides varied powers to the registrar regarding the names of the companies.

Hence, one has to be careful regarding the names of the company at the time of register a new company UK. Any controversial name may lead to the rejection of registration of the company, or if the company has been registered it will have to change its name within a given time.

* The email will not be published on the website.