At the beginning of 2013, the UK Government (“Government”) launched a consultation seeking views on the future of The Company and Business Names (Miscellaneous Provisions) Regulations 2009 (“Regulations”). Its aim was to identify opportunities to improve and simplify the current system. The Government’s response to the consultation was published in December.
The overall aim of the Regulations is to ensure that every company has a name that is easily differentiated from others and does not misrepresent the company’s position in the eyes of the general public.
The consultation identified that while there is a need to protect the public, there is also scope for the “sensitive” words and expressions list to be simplified and for the number of entries on that list to be reduced by approximately one third. Currently, innocuous use of sensitive words is allowed but the regulations will no longer require automatic referral to specified bodies. Instead, Companies House will be given authority to apply appropriate approval criteria. The Government says that that this will reduce the number of registrants who have to seek permission to use a “sensitive” word in their business name and speed up their registration process. However, it will potentially make the process less certain.
In future compliance with the Regulations should be easier. Not only will their terms have been simplified, making them easier to understand, it will also be possible to find all the requirements in one place. At present, the Regulations and related regulations contain restrictions on the choice of company name, and The Companies (Trading Disclosures) Regulations 2008 contain provisions which aim to ensure that anyone who has dealings with a company knows its legal identity, status and where they can inspect the company records.
It has been decided that “national” words, such as England, Scottish, and Cymru should be retained and should continue to be afforded protection under company law. The Scottish Government, Welsh Government and Northern Ireland Executive are all in support in support of this move.
The number of words on the list of those to be disregarded when determining whether a proposed name is too similar to an existing name will be reduced. Those to be removed are Exports, Group, Holdings, Imports, International, Services (and their Welsh & Gaelic equivalents). With the exception of the word “company”, the implementation of this proposal will result in the list only containing abbreviations and current domain endings. These amendments should, therefore, significantly reduce the number of ‘same as’ instances and increase the number of approved names.
If this is something you would like to find out more about, please contact Stewart Pettigrew of the Corporate Team on 0141 333 6750.
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