Understanding how to buy a company name is often one of the first steps for your new business and it’s the first key step in company formation or incorporation. It is something that can be an important early step in making your business venture official and ensuring no one comes to grab your name from under you. This is especially important if your name is witty or memorable, it’s important to protect it. Whilst there are businesses that will do this for you, it is quite straightforward and something you may prefer to do yourself to mark the occasion. In this article, we will advise you on how to check if it is available and then make it officially yours.
The process is actually far simpler than most people think, so if you have a great company name in mind, you should purchase it before somebody else does – if it belongs to an existing company on Companies House, then unfortunately you’ll need to think again.
Remember, if your company is a private limited company or a limited liability partnership, you are legally required to register it at Companies House.
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Buying A Company Name
There are two ways to go about buying your company’s name. You could go through an agency, which will take care of everything for you. Going through an agency used to be the go-to option, but now that Companies House allows you to register your company name online, you can go directly through Companies House and purchase your company name, with the entire process taking under an hour! Companies House is the official UK register of companies and is available for public viewing.
In order to set up a limited company, you’ll need at least one shareholder and one director. However, these roles can be fulfilled by the same person. You’ll also need an address, a brief description of your business activity, and to mention any noteworthy people who have significant control in the business.
If you are using your personal address as your company address and don’t want it listed on the public register, you’ll need to submit form SR01 to have your address removed so that it cannot be viewed by the public.
The six basic steps to setting up a limited company in the UK include:
- Choosing a company structure
- Checking that the name you want is available
- Entering your company information with Companies House
- Allocate all company shares
- Complete the memorandum
- Submit everything to Companies House
You should hear whether your application was accepted within 24 hours.
Simultaneously, as you purchase your company name, you should look into securing your preferred domain name if you do not yet have a website.
Note that this is not the same as Trademarking and this is covered in a different article. A trade mark is a separate legal entity that provides protection from others stealing your products, intellectual property, or business name and using it as their own.
How Much Is It To Purchase A Company Name
Registering with Companies House costs just £50 to do it yourself directly. Going through an agency is likely to cost you much more – usually a couple of hundred £s, but they usually add other services such as helping you set up a business bank account, website domain, etc.
Can You Reserve A Company Name
Essentially, yes, you can, but we’d always recommend seeking legal advice and support before doing so. You’re not likely to face any repercussions as you would simply need to register your UK company name with Companies House and they tell them you had a dormant company to protect your chosen company name from being taken. Make sure you tell them your company is dormant, however, or else you might be chased for income tax, VAT, and corporation tax, for example.
It’s also worth noting that you’ll need to pay a yearly fee of £34 (digital) or £62 (paper) to file your confirmation statement to confirm your company is still active, but dormant. Failure to do so will result in your business names returning to the open market for others to take.
Once you’re ready to actually start trading as a company, just let Companies House know about your change in status.
Whilst your company is dormant you’ll still need to submit annual accounts, even if those accounts only have £1 in. You’ll need to do this every year. Failing to submit your annual accounts can result in fines, regardless if whether your company is dormant or not.
When you eventually start trading as a company you’ll have to let HMRC and Companies House know within 3 months.
How Do I Choose A Good Company Name
Getting the right name is almost as important as putting together the right business plan when you’re first starting out. A registered name with Companies House means you’ll need to trade under that name, unless you want to pay a fee to change it, so getting it right is key.
One of the best things you can do when picking your name is ensuring it’s future-proof. Choose a name that can grow with your company, a name that covers what you’re about now, but what you’ll be about in the future too. Imagine if you started trading internationally – would the same name you choose today have the same effect?
Remember, you won’t be able to register a name for your business that others might find offensive or if it contains sensitive information, so choose wisely, regardless of the impact the name might make.
What Happens If My Name Is Taken?
If there is a company already operating with the same name as you wanted, then unfortunately you’ll need to think again. Once it has been claimed in the public domain at Companies House, you can’t take it. Even with slight variations in spelling or punctuation.
Return to the drawing board and you’ll surely find an appropriate alternative.
Why Can’t More Than One Company Run Under A Limited Company Name?
First, it’s important to remember that limited company names and trading names are different things. More than one business can trade under a company name, and trading names don’t need to be related to the official company name, but it should be made clear that they’re related with a note in the footer of a website, for example.
You can’t, however, have the same trading name as another company either. It’s vital that company names be unique as it is the company that is responsible for paying taxes etc, which could make ensuring all obligations are met difficult for HMRC.
How To Buy A Company Name Summary
If you want to buy a company name, then it’s simple enough to do yourself at Companies House. Make sure it isn’t already taken, ensure you’ll be happy with the name in 5, 10, 15 years+ time, and you’ll be ready to register your new limited company name.
Picking the right name for your business is always exciting, so enjoy this first milestone on your business journey!
