Naming and setting up your business

Read time: 5 mins Date added: 21/11/2023

This guide will look at things to consider when coming up with names for your business, as well as the right trading status for you. 

On this page:​

Naming your business

Deciding on a name is one of the first decisions you’ll need to make when starting a business. The right name can make an important contribution to building your business’s profile and helping it succeed.
 

The legal considerations

Your ‘business name’ is the name you choose to trade under.
 

  • For a company or a limited liability partnership, it can be a name other than its registered name.
  • For a sole trader, it can be a name other than a surname with or without forenames or initials.
  • For a partnership, it can be a name other than the partners' names.
     

There’s no need to register your business name, but it must comply with Business Names legislation. In contrast, you must register your company name (i.e. registered name) at Companies House and comply with the Companies Act legislation. For more guidance on names visit Companies House.
 

Is someone already using your name?

You can check no one else is already using the name you want to use by consulting the following:
 

  • The internet, to check whether another business has already registered the name that you want to use as a domain name.
  • The Companies House register for names of all limited companies and Limited Liability Partnerships (LLPs).
  • The Trade Marks Journal which is published by UK Intellectual Property Office (UK-IPO).
  • Trade directories.
  • The membership directories for chambers of commerce or professional bodies.
     

The risk of having a name like another business

There’s a danger in selecting a name that’s easily confused with an existing business in the same area or same line of business. It can be confusing for you, the other business and your customers. If conflicts arise, the other party could take you to court to force you to select another name.
 

Names not permitted:

  • Any offensive words and phrases.
  • Names suggesting your business is connected with the government or a local authority.
  • Around 80 reserved words, including British, Royal and National – you need the agreement of the Secretary of State before you can use them.
  • Names that could mislead the public about your business status – for example a sole trader can’t choose a phrase including the word limited.
     

Names that work and names that don’t

A business name informs people and adds life to your business profile and image.

Try asking these questions when thinking about your name:
 

  • Do you want one that describes the type of business you’re in or your location?
  • How will it sound when you say it over the telephone?
  • Is it simple to pronounce and spell?
  • Will it be suitable as a website domain name (and is it available)?
  • Could it be shortened for use on social media?
  • Does it have any bad connotations or subtle meanings that could distract or offend prospective customers?
  • If you plan to do business internationally, is your name easy to translate and pronounce in other languages?
  • How will your selected market perceive your name?
  • Will it limit you? Will it date?
  • How does it contribute to your business image?
     

Things to avoid:
 

  • An overly long description, like ‘ABC Consultants, Copywriters, Counsellors and General Advisers’, lacks impact and can confuse your customers.
  • Using initials as a name, such as EFG Solutions, can sound bland. It’s also easy to forget.
  • Using your own name or geographical information, such as a street name, can result in a name that has little impact, is hard to say, or is too much like a competitor.
     

How big do you want to appear?

Certain names will position your business as small, for example ‘Dartmoor Data Services’. This might work if you want to be seen as a local business that delivers personal service. It may not be helpful though if you want to expand your business across a wider geographical area.

Using a word like ‘International’ in your name can imply size and make your business look more important. However, if you don't trade internationally, you could mislead people and attract customers you can’t help.
 

Remember to protect your name

If you register your name as a trademark, it is easier to protect your rights. Although you should note a mark is protected for a set period of time and needs regular renewing. Find out more from the UK Intellectual Property Office.

Once you’ve started trading under your business name, do occasional checks to protect it. Make sure no one else is starting up, nearby or in the same line of business, using a similar name.

Setting up your business

What will your trading status be?

When you set up, you need to choose between being a sole trader, a partnership or a limited company:
 

  • As a sole trader you are on your own as the owner operator of your business. To set up a business as a sole trader, you need to let HM Revenue and Customs (HMRC) know that you are self-employed. If trading under a name that’s different from your personal name, you must include your own name on your business stationery.
  •  If your business is a partnership, there will be two or more of you doing the work and investing capital.
  • As a limited company your business is owned by its shareholders, who invest money in it in return for a share of its profits. A limited company must be registered with Companies House.
     

Partnership agreements

A partnership agreement is a legal document that dictates that a business will operate under two or more people.

If you are planning to run your business with another person, it is sensible to have a written partnership agreement (even with a spouse) and then have a solicitor check it. 
 

Limited liability partnerships (LLP)

These are a cross between a partnership and a limited company. They allow you to operate like a normal partnership but your liability is limited to how much you have invested in the LLP. If you choose to be an LLP, you must register it with Companies House.
 

Incorporating a business

This means forming a company. There are different sorts of companies, defined by their investors (for example a private company, a public limited company, etc.), but the main advantage to incorporating a business is that your liability is limited. As a sole trader, you take on all the liability of the business. However, when you are incorporated, each of the individual shareholders has their liability limited to the amount they have invested in the business.

A limited company can stay in business even after the resignation, death or personal bankruptcy of either its management or shareholders. It’s also an effective structure if you’re planning to expand, since it is easier to raise capital from outside investors by selling shares. However, remember company directors have certain duties and if you fail to fulfil these it can result in fines, personal liability, disqualification and even imprisonment.

For more information on becoming a director, you can look at this helpful guide.

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