New regulations introduced by Companies House
- TBA
- May 29, 2024
- 3 min read
Companies House can now utilise their new powers to inspect and supervise company registration names. If misuse or non-compliance is detected, Companies House now has the authority to reject applications.
Additionally, Companies House can also issue requests for a company to change its name – failure to comply can constitute a crime!
So, what are the new rules?
1. New rules on company names
Identical names
Your company name cannot be identical to existing names already registered with Companies House.
‘Identical’ does not only mean the exact same name, but also if it is substantially similar. For example, even if your company name differs by just one word, symbol or character (e.g. ‘+’), it will still be considered ‘identical’.
Similarly, if one word, symbol or character in your company name resembles another name, it may also be deemed identical. For example: ‘Hands UK Ltd’, ‘Hand’s Ltd’ and ‘Hands Ltd’ would all be considered identical.
If you want to register an identical name, it’s only possible in specific circumstances:
Your company and the existing name belong to the same group
You have written confirmation that the company does not object to your new name
Cannot be too similar to existing company names registered with the Companies House (see below for the similarity restriction)
Similar names
Certain names may be considered too similar.
For example, Easy Electrics For You Ltd and EZ Electrix 4U Ltd would be considered too similar.
Companies House will contact you if they believe your chosen name is too similar to another.
Offensive names
Company names cannot be offensive and should not contain any words that may constitute a crime.
Accreditations
Company names cannot refer to government or administrative bodies without obtaining prior permission.
For example, if you want to use ‘Accredited’ in the name, you must obtain permission from the appropriate governing/regulatory body.
Other regulations:
Other prohibitions also apply:
Sensitive words/expressions
Certain characters, punctuation and symbols
Naming rules also apply depending on your company type:
Limited companies can end with ‘Limited’ or ‘LTD’ (in Wales this can be ‘Cyfyngedig’ or ‘CYF’)
Public limited companies can end with ‘Public Limited Company’ or ‘PLC’ (in Wales this can be ‘Cwmni Cyfyngedig Cyhoeddus’ or ‘CCC’)
Different rules apply to charities – the company name may not need to include ‘Limited’. This applies if your company is a registered charity and the company’s articles require that it:
Promotes and/or regulates business, arts, science, education, religion, charity or other professions
Cannot pay dividends to shareholders
Requires shareholders to contribute to the company’s assets during membership/within one year of ceasing to be a shareholder
2. What are the new powers of Companies House?
According to the Economic Crime and Corporate Transparency Act, all companies must comply with existing legal rules when naming their companies.
Additionally, the new regulations expand the legal content and strengthen the management of company name verification processes.
In addition to the legal requirements mentioned earlier, if the Companies House discovers the following situations when a company is naming itself, the application can be refused:
The name is intended to promote fraud
The name consists of or contains computer code
The name may give the impression that the company has connections with foreign governments or members, including two or more countries or regions (or their governments), international organisations
If an existing company name falls into any of the restricted categories, Companies House will issue a notice and allow 28 days for a change to be made. Companies House also reserves the right to automatically assign a new name to the company if a change is not made within 28 days. This can be, for example, a generic company number.
3. A word from TB Accountants
In recent years, the UK has been continuously updating laws to enhance corporate transparency and combat crime. We fully expect that more reforms will be implemented in the future.
If you inadvertently overlook these rules or fail to comply with them, the consequences can be severe!
To prevent legal risks for your business, before submitting a company formation application to the Companies House, you can check if your chosen company name can be registered. Most importantly, we highly recommend that you consult with a qualified accountant as soon as possible to handle and address these issues for you.
