Choosing and registering a company name

Whether you are a small business owner or sole trader, you will need to have a name for your company. If you’re going to register as a limited company, this is a legal requirement - but even if you’re just going to operate as a sole trader, you still of course need to call your business something, so that you have an ‘identity’ which people will recognise. This could just be as simple as just your own name, or of course there are a million and one other options.

Even if you are starting out as a sole trader, it is worth thinking about a name in the context that you might one day want to go limited and hence have to register the name with Companies House, so that you are covered either way. In fact, it may even be worth actually officially registering the name, even if you don’t then immediately start operating as a business. As soon as you do start trading and building up a client base and a good reputation, all of a sudden that name, or ‘brand’ becomes worth something and it’s even more important that it’s protected – and also that it is as unique as possible.

Choosing the name
This sounds like it should be easy! In fact, if you’ve been thinking and dreaming about setting up your own business for years, you may already have a name in mind that you’ve always wanted to use. But in reality there are many factors to consider before making a final decision.

The first of these, of course, is whether the name is available – as no two businesses can have the same legal name. You should also ensure that it is not similar to a word or phrase which has already been registered as a trade mark, so there's no point in choosing Moca Cola or IBBM computing. You will need to search for existing company names that are the same or similar, and you can do this using the National Business Register. For an easy way to search, please visit our sister company’s website SJD Accountancy and use their free company name checker.

You will need to make sure that your chosen name ends with Limited, for companies - or if you are starting a Limited Liability Partnership, it will be LLP. If you decide to go down the partnership route, remember that one of you may choose to sell up and leave the business in the future, so whilst a company name that includes both your surnames might seem like a great idea now – if one partner leaves, this may affect your company name and hence the brand you have worked hard to establish.

Descriptive or abstract?
This is a really important decision that you have to make. Large organisations have spent literally millions of pounds when choosing or changing names, and the ‘brand development’ agencies which carry out these projects can spend weeks, if not months, deliberating on the right approach for an individual business. Your job should be far simpler, but this is still a vital one to decide upon.

A ‘descriptive’ name makes it immediately obvious what your company does. For example, ‘Freelance Marketing’ or ‘Smith’s Professional Wedding Photography’. But these names can be cumbersome and hard to remember, as well as being far more likely to be already registered – or at least similar to another company that is already registered. The alternative therefore, and something which has become far more popular in recent years, is to go for an abstract name which means nothing - and then to develop a ‘brand’ around it, so that people eventually associate your company, and what it does, with that name.

At the top end, organisations spend millions going through this process. Take telecoms giant Avaya for example. They changed their name from Lucent Technologies which, although not 100% obvious in itself, at least told people that it was a technology company. When it rebranded as Avaya, part of that decision was to spend an awful lot of money carrying out what is known as ‘brand awareness’ advertising, so that people eventually knew what it did just by seeing the name – a marketing programme which included sponsoring the 2006 World Cup!

Back in the real world however, no small business has that kind of budget, or expertise – and so a great alternative is to add a strap-line to your logo which tells everyone what you do. Even Avaya did this, adding the word ‘Communications’ under the name for the first few months. This gives you the opportunity to choose a nice abstract name which is also memorable (and even more importantly ‘dot' commable) and then just explain what you do underneath! For example ‘Zoomla – Professional Wedding Photography’.

The name you choose could be a totally made up word, or it could be an existing word but one which is not related to your business. For example, back in the late 90s, Scottish Telecom rebranded as ‘Thus’ – and name which is now pretty well known and associated with that business. Either option is fine, as long as you can find a name that you like and that, ideally, you can just add .com and .co.uk to, to form your catchy and memorable domain name.

Foreign and ‘PC’ sensitivities
When selecting a name, you also need to consider any other sensitivities which might cause a negative impact. Some people think that we live in a world where ‘Political Correctness’ has gone mad (who can forget ‘Baa Baa Rainbow Sheep?') – but even if you think it is all taken a bit too seriously, for the purposes of your company name, it’s best to err on the side of caution and to avoid any names which might offend someone.

The other thing to consider, especially when choosing an abstract name, is that it might mean something else in a foreign language. Granted, you may never plan on trading in that country, but there could still be negative implications if the name you choose means something derogatory, contentious or just downright embarrassing in another language. One of the most famous, although in this case partly due to a slight mis-translation, was the name Coca Cola – which, when translated into Chinese, read ‘Bite the Wax Tadpole’. More simply - and not even due to translation, but just to different terminology - is the now-global brand of Australian sports shoe shops ‘The Athlete’s Foot’, which has some rather unpleasant connotations here in the UK.

Making sure your name is web friendly
As outlined above, any name you choose must be able to be used as a domain name. Having a website domain name that is different to your company name just causes confusion, and unless you are a huge brand, is best avoided. B&Q might get away with www.diy.com but that’s the exception. This is made slightly easier by the fact that you can have hyphens in your domain name, but remember that you will be saying either the web address, or your email address, over the phone many times - so you need to make sure it’s easily understood. A name with lots of hyphens between words can be quite hard to say.

When thinking about your company name from a web perspective, it’s also worth thinking about how ‘SEO friendly’ the name is (Search Engine Optimisation - simply means how easy is it for Google/Bing/Yahoo to find it). If you do opt for a descriptive name, then you might find that people use that search phrase more generically when looking for the type of services that you provide – and that you might gain an advantage as they are in fact searching for your company name. Having said that, this should not be a deciding factor when choosing a name, as many other companies will probably use the same phrase as one of their ‘keywords’. This page offers a few hints and tips on SEO and keywords. 

One last thing to consider when choosing your name is that domain names are often written all as one word and, whilst you might know what it is meant to say, it could read quite differently to someone who’s never seen it before. One of the most well known examples of this is the well-known online technology forum for IT specialists Experts Exchange – whose web address is www.expertsexchange.com. Think about it . . .

For more information on choosing a domain name please have a look at our easy to read article on Setting up your Company Website.

Impressing investors
At some point in the future you might want to consider applying for external investment into your business, and at this point you’ll need to come across as being very professional and businesslike. So think carefully now before choosing an outrageous, contentious or even slightly risqué name. Investors might not take you seriously and might be less than thrilled about handing over a cheque with such a bizarre name on it.

If you are set on this approach then register a more ‘safe’ legal name and then operate using a more trendy one if you must. Many businesses go down the ‘trading as’ route, or simply use more memorable variation of their names as an outward facing brand. French Connection Limited’s FCUK brand is a classic example of this.

Registering your chosen name
Once you have chosen your company name and have determined that it is available, you can then register the name and set up your limited company. There are many organisations that can help you with this, including us of course. Have a look at our ‘Form a Limited Company’ page for more information. Costs for this service are just £125 VAT, which is one of the lowest fees in the marketplace, and it includes:

• Organising a company Bank Account.
• Registering the company for VAT & PAYE.
• Advising on the optimum share structure of the company.
• A complete company formation service with all legal requirements, so that you can start trading as a limited company.

If your chosen company name is available, we should be able to send out your certificate of incorporation within three hours of registration. Please note that it is not currently possible to form Companies in Northern Ireland.

Good luck in your search and we hope you've found this short guide helpful.

We'll be adding new guides, hints and tip weekly so be sure to check back regularly.

You may also find our other Free Business Guides useful:

• How to advertise your business
• How to market your company for (almost) free!
• Is freelancing for me?
• What will an accountant do for me? 
• How to be number one on Google
• Benefits of an Accountant 
• Do I need an accountant as a Freelancer?
• Top Tips to getting more Customers 
• Creating a website for your business
• Do I need a business plan?
• Choosing a small business accountant

You may also find our Frequently asked questions pages on VAT, Payroll, tax returns, limited companies and being self employed useful.

If you'd like to chat with Easy Accountancy about your small business you can Ask us a question, call us on 0500 234 111 / 01442 275 767.