What are the restrictions on choosing a name for my sole trader business?
How to ensure your chosen business name is both engaging and original
I'm looking to start an independent stationery shop as a sole trader but don't want to use a business name that already exists. Are there any restrictions on business names and how can I make sure I am not copying an existing one?
Corin Elliot writes:
When starting a business, inevitably one of the first decisions you will need to make is choosing your business name. You will need to decide on your business name before you set up a business bank account, design and order stationery, register with HM Revenue and Customs and plan your advertising amongst other responsibilities.
A business name can make or break your business so it's imperative you get it right first time. Firstly you need to make sure the name you choose does not include any terms that are restricted in use. Many terms such as English, Association, Royal, Federation and National to name but a few, require permission from various organisations and institutions including the Department for Constitutional Affairs or the Secretary of State. It is possible to obtain permission for use of most restricted terms, however, there are strict criteria to be met.
Once you're sure that your chosen name does not include any restricted terms, it's important to make sure it's not already in use by another business or company operating within your industry and geographical market area. Copying, or passing off as it is known in legal terms, can have a catastrophic effect on a new business and potentially destroy it before it can get off the ground. Therefore is vitally important that your business name is unique and unlikely to cause confusion with an existing trade name.
However, it's not just your business name that needs to be researched when launching your new enterprise. Trade marks and domain names are just as important in today's competitive market. There are approximately 2.5 million registered trade marks in the UK and each and every mark is protected nationally. Should you copy a registered trade mark, you would have to recall and destroy all business materials including stationery and advertising literature. You may even have to forfeit all profits made under the trading name.
Conducting detailed research into existing business names and trade marks is therefore essential before embarking on your new business. However, once you're sure you have chosen a business name that's available for use you should check the availability of the appropriate domain names. You can spend thousands of pounds on advertising and web design but if you don't own the right domain name you could be missing out on a very large market. Once you have chosen your business name, trade mark and domain names then registration is the best way of protecting these assets.
You can carry out free online searches against 10 million registered entities operating in the UK at www.start.biz. There are already two million businesses, 2.3 million companies, 2.5 million UK trade marks, 7 million European trade marks and 4.2 million UK domain names – and there are 25,000 changes each month.
Your business identity is your most important asset. Make sure it's yours, its legal and it's protected.
Corin Elliott is business development manager at National Business Register