Part 5: a Company’s Name

143.This Part applies to the name under which a company is registered, sometimes called the "corporate name". This Part regulates the choice of name. The rules are primarily intended to ensure that third parties are not misled. There are no property rights in companies’ registered names as such. While there is no requirement for a company to use its registered name in the course of business, this Part also requires a company to disclose its name in specified circumstances.

144.Sections 70 to 74 provide for the appointment of adjudicators in cases where there is dispute over the registering of a company name. Section 71 safeguards the independence of the adjudicators and section 74 provides a right of appeal to the court.

Chapter 1: General Requirements

Section 53: Prohibited names

145.This section replaces section 26(1)(d) and (e) of the 1985 Act. It retains the existing prohibition of companies registering names that cannot be used without commission of an offence and of those that are offensive.

Section 54: Names suggesting connection with government or public authority

146.This section replaces section 26(2)(a) of the 1985 Act. It prevents a name being registered without the Secretary of State’s approval if it suggests a connection with Her Majesty’s Government, a local authority or – which represents a change from the 1985 Act – any part of the Scottish administration, or Her Majesty’s Government in Northern Ireland. A new power allows similar protection to be extended to other public authorities.

Section 55: Other sensitive words or expressions

147.This section replaces sections 26(2)(b), 29(1)(a) and 29(6) of the 1985 Act.

148.Subsection (1) requires prior approval for the adoption of a name that includes words or expressions specified in regulations. Subsection (2) provides for the procedure to be used for making the regulations. The words and expressions protected by the current Regulations (the Company and Business Names Regulations 1981, SI 1981/1685) include British, English, Scottish and Welsh; chamber of commerce, charity, Her Majesty, midwife, police, and university.

Section 56: Duty to seek comment of government department or other specified body

149.This section replaces section 29(1)(b) and (2) and (3) of the 1985 Act. It provides power for the Secretary of State to specify whose view must be sought when seeking approval for a name. For example, under the present Regulations, the approval of the General Dental Council is required for the use of either «dental» or «dentistry». Regulations under the new power would be able to replicate this. They could also require the approval of, say, the House Authorities for names suggesting a connection with Parliament.

150.When a request is made under section 56 in connection with the registration or the change of name of a company, the registrar must be sent a statement that a request has been made, and a copy of the response (see subsections (3) and (4)). But the registrar must no make the response available for public inspections (see section 1087(1)(a)).

Section 57: Permitted characters etc

151.This section is a new provision. It provides power for regulations to specify what letters, symbols, etc may be used in a company’s registered name; the regulations may also specify a permitted format for a name (for example, to prevent the use of superscript or subscript).

Chapter 2: Indications of Company Type Or Legal Form

Section 58: Public limited companies

152.This section replaces section 25(1) of the 1985 Act (and also section 27(4)(b) and (d) in its application to public limited companies). It brings together in a single provision all the alternative statutory indicators of legal status that must be used by a public company as part of its registered name, i.e. «public limited company» or the Welsh equivalent or the specified abbreviations. This section does not apply to community interest companies.

Section 59: Private limited companies

153.This section replaces section 25(2) of the 1985 Act (and also section 27(4)(a) and (c) in its application to private limited companies). It brings together in a single provision all the alternative statutory indicators of legal status that must be used by a private company as part of its registered name, i.e. «limited» or the Welsh equivalent or the specified abbreviations. Certain companies are exempt (see section 61). This section does not apply to community interest companies.

Sections 60 to 62: Exemption from requirement as to use of «limited»

154.These sections replace section 30 of the 1985 Act. Section 30 exempts certain companies from the requirement for their names to conclude with «limited». Exempt companies are also exempt under the 1985 Act from some of the requirements regarding publication of their name but they still have to disclose their limited status in correspondence. Those currently exempt are those with a licence granted under section 19 of the Companies Act 1948 which have delivered a statutory declaration to the Registrar that the company complies with the requirements for the exemption. These requirements are, in effect, that the company is non-profit-making and its objects are the promotion of commerce, art, science, education, religion, charity or any profession.

155.Section 60 continues the exemption for companies already exempt so long as they continue to meet the conditions and until they change their registered name. It also provides an exemption for charities and allows the Secretary of State to make regulations exempting other companies. Only private companies may be exempt

156.Sections 61 and 62, which replace section 30(2) and (3), specify the conditions that must be met for a company currently exempt to continue to qualify for the exemption: its objects must continue to satisfy the criteria for their exemption and its articles must both preclude distributions of dividends to its members and also, in the event of it being wound up, require its assets to be passed to a body with similar objects. For companies limited by shares benefiting from an exemption under the 1948 Act (or its Northern Irish equivalent), there is a new requirement that the articles prevent a distribution of capital. This is linked to the change in section 63(4) (see below).

Section 63: Exempt company: restriction on alteration of articles

157.This section replaces section 31(1) and (5). It prohibits a company benefiting from an exemption under the 1985 Act or the 1948 Act (or their Northern Irish equivalents) from changing its articles in such a way that it no longer meets the requirements for the exemption. It is an offence to change the company’s articles in such a way. Many companies with an exemption under the 1948 Act (or its Northern Irish equivalent) were made to include a provision in their memoranda preventing an amendment to their memoranda or articles without the consent of the Board of Trade (there were a number of variations on this theme). Subsections (4) and (5) make provision to remove this administrative burden.

Section 64: Power to direct change of name in case of company ceasing to be entitled to exemption

158.This section replaces section 31(2) to (6). It gives the Secretary of State power to withdraw a private company’s exemption from the requirement for its name to conclude with «limited» and to direct it to change its name if it no longer meets the criteria that applied when it was granted the exemption.

Section 65: Inappropriate use of indications of company type or legal form

159.This section replaces section 26(1)(a), (b), (bb) and (bbb) of the 1985 Act. These paragraphs restrict the use of various words, expressions and abbreviations that are indicators of legal status for various types of commercial entity, e.g. p.l.c., community interest company, open-ended investment company, etc. Some of the restrictions apply to the use of the particular indicator at the end of a company’s name; some anywhere other than the end of the name; and some anywhere in a company’s name.

160.This section provides power to make regulations prohibiting the inclusion in a company’s name of specified words, expressions and abbreviations. The only words etc that can be specified in the regulations are those associated with a particular type of company or form or organisation or those confusingly similar to such words and expressions. This section also provides power to require or prohibit the statutory indicators of legal status being used in conjunction with specified other words.

Chapter 3: Similarity to Other Names

Section 66: Name not to be the same as another in the index

161.This section replaces section 26(1)(c) and (3) of the 1985 Act.

162.Subsection (1) retains the present prohibition, in section 26(1)(c), on a company adopting a name that is already on the registrar’s index of company names – which includes not only the names of Companies Act companies but various other business entities (see section 1099). Subsections (2) and (3) provide power for the Secretary of State to make regulations to replace the detailed rules presently contained in section 26(3) of the 1985 Act as to:

what is to be disregarded; and

what words, letters and symbols are to be taken as the same, or as not the same,

when comparing a proposed and an existing name. At present only «and» and «&» are taken as the same.

163.The section provides power also to treat as the same:

currency symbols (e.g. £, $) and their respective English word equivalents;

% and «per cent»;

«1», «2», «3» etc and «one», «two» «three».

164.The prohibition of names that, under these rules, are the same as an existing name will not be discretionary. But in future, it will be possible for there to be exceptions: subsection (4) provides that the regulations may provide that names which would otherwise be prohibited as being the same may be permitted in specified circumstances, or with specified consent, and that a subsequent change of circumstances or withdrawal of consent will not affect the company’s registration.

Section 67: Power to direct change of name in case of similarity to existing name

165.This section replaces section 28(2) of the 1985 Act which provides power for the Secretary of State to direct a company to change its name if the name is the same as or too like a name already on the registrar’s index of company names (or one which should have been there). The objective is to prevent the public being confused by the simultaneous appearance on the register of two very similar names when the similarity is such that the later name was not caught by the non-discretionary prohibition of adopting a name effectively the «same as» an existing name (see section 66).

166.The section is intended to cover two circumstances. First, any delay in the entry on the index of company names of new names of entities that are not UK companies. Companies House enter all names immediately but there may be delays outside their control. If the name had already been taken by the other entity before the company adopted it, then the Secretary of State will direct the company to change its name. Second, the visual difference between the new name and an existing name being so small that third parties are likely to be confused by the simultaneous appearance of both names on the index of company names.

167.Subsections (2) and (3) provide power to make regulations, corresponding to that provided by section 66, to replace the detailed rules presently contained in section 26(3) of the 1985 Act as to:

what is to be disregarded; and

what words, letters and symbols are to be taken as the same

when comparing a proposed and an existing name. As in section 67, subsection (4) provides for a power to make regulations permitting names that would otherwise be regarded as «too like» in certain circumstances or where consent is given.

Section 68: Direction to change name: supplementary provisions

168.This section replaces section 28(4) and (5) of the 1985 Act as they apply to section 28(2). It provides a deadline of 12 months for the Secretary of State to direct a change of name under section 67, and for the Secretary of State to specify a period for the company’s compliance. It makes failure by the company to comply an offence.

Similarity to other name in which person has goodwill

169.Sections 69 to 74 are new provisions. They respond to the CLR recommendation (Final Report, paragraph 11.50) that there be provision so that a person can apply for a company to be directed to change its name if the applicant can show that the name was chosen with the principal intention of seeking money from him or preventing him registering the name where it is one in which he has previously acquired reputation or goodwill.

Section 69: Objection to company’s registered name

170.This section provides for any person, not just a company, to object to a company names adjudicator if a company’s name is similar to a name in which the objector has goodwill. There is list of circumstances raising a presumption that a name was adopted legitimately. The respondent must show that one of these applies, or otherwise that he acted in good faith or that the interests of the applicant are not significantly affected (for example, where the applicant has hardly used the name at all). The objection will be upheld if the respondent cannot do so, or if the objector can show that the name was registered either to obtain money from him or to prevent him using the name.

Section 70: Company names adjudicators

171.This section provides power for the Secretary of State to appoint company names adjudicators and their staff and to finance their activities. One of the adjudicators is to be appointed Chief Adjudicator.

Section 71: Procedural rules

172.This section provides the Secretary of State with power to make rules for the proceedings before a company names adjudicator. The list of matters which the rules may cover is not exhaustive. It also enables the rule to confer on the Chief Adjudicator power to determine any matter that could be the subject of the rules made under this power.

Section 72: Decision of adjudicator to be made available to public

173.This section requires the adjudicator to publish his decision and his reasons for it, possibly through a website. The publication must be within 90 days of the decision.

Section 73: Order requiring name to be changed

174.This section is a new provision. If an objection made under section 69 is upheld, then the adjudicator is to direct the company with the offending name to change its name to one that does not similarly offend. A deadline must be set for the change. If the offending name is not changed, then the adjudicator will determine a new name for the company.

Section 74: Appeal from adjudicator’s decision

175.This section enables appeal to a court against the decision of the company names adjudicator. The court will either uphold or reverse the adjudicator’s decision, and may make any order that the adjudicator might have made.

Chapter 4: Other Powers of the Secretary of State

Section 75: Provision of misleading information etc

176.This section replaces section 28(3) of the 1985 Act and, insofar as they support that subsection, section 28(4) and (5). It provides power for the Secretary of State to direct a company to change its name within a specified period in two circumstances. First, if misleading information was given to enable the adoption of the name. Second, if an undertaking or assurance given to enable the adoption of the name has not been fulfilled. The direction can only be made up to five years after the adoption of the name. It is an offence not to comply with the direction.

Section 76: Misleading indication of activities

177.This section replaces section 32 of the 1985 Act. It provides power for the Secretary of State to direct a company to change its name, regardless of how long the company has had the name, in the specified circumstances. The circumstances are that, in his opinion, not only does the name give a misleading indication of the nature of the company’s activities but also that the public are likely to suffer harm as a result. The company may appeal to the court, who may either confirm the direction or set it aside. It is an offence not to comply with the direction.

178.The section also sets time limits for compliance with the direction (6 weeks) and the application to the court (3 weeks). If the court confirms the direction, it specifies the deadline for compliance.

Chapter 5: Change of Name

Section 77: Change of name

179.This section replaces section 28(1) of the 1985 Act. Under the existing provision, companies can only change their names:

by special resolution; or

following a direction by the Secretary of State in the restricted circumstances provided by section 31 of the 1985 Act, which apply only to companies exempt from their name concluding in «limited.»

180.This section also provides for the following means:

whatever means are provided in the company’s articles (this means that the company will be able to determine the procedures for changing its own name);

by an order of the company names adjudicator if an objection under section 73 is upheld, or by a court following an appeal against the adjudicator’s decision under section 74; and

under section 1033 on the company’s restoration to the register.

Section 78: Change of name by special resolution

181.This section is a new provision. It requires the company to notify the registrar of a change of name when it has been agreed by special resolution. This requirement is in addition to the obligation under Chapter 3 of Part 3 to forward a copy of the special resolution to the registrar. Subsections (2) and (3) address the particular situation where a company has passed a special resolution to change its name but the change is not to take place until some other event has occurred (e.g. a merger). The notice of change of name must say that the change is conditional and whether the event has occurred. If the event has not yet occurred, the registrar will not act on the notice to change the name until she has received a second notice stating that the specified event has occurred. The registrar may rely on that statement without further evidence.

Section 79: Change of name by means provided for in company’s articles

182.This section is a new provision, supplementing the new provision (section 77(1)(b)) whereby a company may change its name by any means provided for in its articles. Subsection (1) requires the company to provide the registrar with both a notice of the name change and a statement that the change has been made in accordance with the company’s articles. Subsection (2) ensures the registrar may rely on that statement without further evidence.

Section 80: Change of name: registration and issue of new certificate of incorporation

183.This section, which partly replaces sections 28(6) and 32(5) of the 1985 Act, provides for the procedures that the registrar must perform before a company’s proposed new name is effective. Subsection (2) provides for the checks both that the name meets all the requirements for a company’s name in this Part of the Act and that the necessary documents have been provided. Subsection (3) provides for the company to be issued with a certificate of incorporation with the new name.

Section 81: Change of name: effect

184.This section, which replaces sections 28(6) and 32(5) in part and, in total, section 28(7) of the 1985 Act, provides that the new name is effective as soon as the altered certificate of incorporation is issued. It also provides that the change of name does not affect the company’s rights or obligations or legal proceedings by or against it in its previous name.

Chapter 6: Trading Disclosures

Section 82: Requirement to disclose company name etc

185.This section replaces sections 348(1), 349(1), and 351(1) and (2) of the 1985 Act and, insofar as it applies to companies, section 4(1) of the Business Names Act 1985. It provides power for the Secretary of State to make regulations requiring every company:

to display a sign with its name and specified other information at specified locations;

to include its name and specified other information in specified documents and communications;

to provide its name and specified other information to those who request it in the course of business (this is a new provision insofar as it applies to companies doing business under their registered names).

Section 83: Civil consequences of failure to make required disclosure

186.This section replaces section 5 of the Business Names Act 1985, so far as it applies to companies. As recommended by the CLR (Final Report, paragraph 11.57), it follows the precedent of the Business Names Act as regards the civil consequences of failure to comply with the information requirements made in regulations under section 82: the provision for personal civil liability of officers in default in section 349(4) of the Companies Act 1985 is not included.

Section 84: Criminal consequences of failure to make required disclosures

187.This section replaces sections 348(2), 349(2) and (3) and 351(5) of the 1985 Act and, insofar as it applies to companies, part of section 7 of the Business Names Act 1985. It makes it an offence not to comply with the requirements, to be specified in regulations under section 82, for every company to disclose its name and specified other information.

Section 85: Minor variations in form of name to be left out of account

188.This section is a new provision. It means that the company’s name as used to comply with the disclosure requirements need not be exactly the same as the registered name. The permitted differences are the case of the letters, the use of punctuation, accents, etc and formatting. However the differences must not result in there being a risk of confusion.