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Understanding Companies House’s New Powers on Company Names

Published by Rita Bista
Posted Date: July 11, 2024 , Modified Date: July 11, 2024
Categories: Companies House

On March 4, 2024, the initial provisions of the Economic Crime and Corporate Transparency Act took effect. Accordingly, the Companies House has introduced new protocols to maintain the integrity of its registry, combat economic crime and enhance transparency in the UK's business environment.

Companies House is now implementing stricter checks on company names that could mislead the public. This initiative seeks to improve the accuracy and quality of the registry's data while preventing the misuse of company names.

Criteria for Challenging Company Names

When setting up a private limited company, you must choose a name for your business. However, it will be challenged if it falls within the scope of the following conditions:

Same Name as Other Companies

Names are considered the same if the sole distinction from an existing name lies in:

  • punctuation marks;
  • specific special characters, such as the 'plus' sign;
  • words or characters that resemble or have similar meanings to another existing name;
  • terms or characters commonly used in UK company names.

However, exceptions to this rule include instances when:

  • the new company being registered is part of the same group as the existing company or limited liability partnership;
  • the new company has obtained written confirmation from the existing company or limited liability partnership indicating no objection to its proposed name.

Example 1

Johnson Brother Ltd and Johnson Brother’s Ltd are considered the same as Johnson Brothers Ltd.

Offensive Names

Your company name cannot contain a 'sensitive' word or expression, nor suggest a connection with government or local authorities unless prior permission is obtained. You can read more guidance on naming your company and which words you need permission to use if you are not sure what counts as ‘sensitive’ or offensive.

Example 2 

To use ‘Adjudicator’ in your company’s name, you need a letter or email of non-objection from a relevant body because incorporating this word in a company or business name suggests a quasi-judicial role similar to legal, administrative or governmental authorities.

Names That Are Too Similar

If Companies House finds your name too similar to the name of another organisation or if someone complains and Companies House agrees that your name is 'too similar' to another one registered before yours, you will be required to change it.

Example 3 

Quick Electrics For You Ltd is the same as Quick Electrix 4U Ltd.

New Powers Under the Economic Crime and Corporate Transparency Act

The Economic Crime and Corporate Transparency Act has now empowered the Companies House to reject name registration applications if they have grounds to believe:

  • the name is intended to facilitate fraud;
  • the name includes or incorporates a computer code;
  • the name is likely to create the false impression that the company is affiliated with a foreign government or an international organisation involving two or more countries or territories (or their governments).

Under the Act’s expanded directives, Companies House may direct companies to change their names in several situations. If the company fails to comply with this order within 28 days, Companies House possesses the authority to assign a new name, altering it to the registered company number.

Offences and Penalties

If a company does not respond to a direction to change its name within 28 days, it commits an offence.

Offences and Penalties - Companies house’s new powers

Furthermore, it is considered an offence to persist in using a company name that Companies House has directed to change.

Conclusion

The Economic Crime and Corporate Transparency Act grants Companies House new authority to challenge and change company names, aiming to combat fraud and enhance transparency in the UK business sector. These measures reinforce integrity and accountability, contributing to a fairer and more trustworthy business environment.

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Rita Bista
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