The very first step in making your business venture official is buying your company name. You needn’t have done all the planning before you buy your company name, and it’s better to do it sooner rather than later. Before you set your heart on a name, ensure that it is actually available first!
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.
How do I buy 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 (limited, LLP, ltd etc.)
- 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.
How much is it to purchase a company name
If you go directly through Companies House, your company registration only costs £12! An agency may charge you as much as £300 for providing this service, but they also usually offer the purchasing of a domain name.
Can you reserve a company name
What happens if you have a really great name for your business in mind but aren’t ready to start it quite yet” Can you reserve a company so that the name doesn’t get taken” While you are able to reserve a name that you like for your company, you’ll need to submit a confirmation statement stating that the company is dormant. This is usually done within two weeks from the 12 month anniversary of buying the company name. This confirmation statement will be done annually and costs £13 each year. It will also confirm that various details about your company and its shareholders have remained the same. In this way, you’re able to keep ownership of your company’s name until you’re ready to start officially operating.
Even though your company is dormant, you’ll still be required to submit your annual accounts balance sheet 22 months after you bought your company name and then nine months after the ‘year end’ every year following that. Even if it is just £1 in the bank, ensure that you submit your balance sheet or else you could be facing fees of £150 upwards.
When a new limited company is registered, Companies House is meant to inform the HMRC, but this doesn’t always happen. Once you’ve bought your company name, look out for CT41(G) form that will be sent to the address you used when registering. There will be options on this form to indicate that your company is dormant for the time being. The same form will be sent to you every three to four years. However, if your company does begin trading, you’ll need to notify the HMRC within 3 months of trading.
How do I choose a good company name
A company name is very important to get right. While you could always change your name down the line, it would be a time-consuming and costly process, especially if there is a significant amount of rebranding involved.
For this reason, it’s best to ‘futureproof’ your company name by choosing a name that will be able to grow with your company should you begin to offer additional services, start trading internationally etc.
If there is a name for a company that already exists, you won’t be able to use it. The same goes for similar names, which are names that are only slightly different because of spelling, punctuation marks etc.
When purchasing your company name, you will have the choice between having ‘ltd’ or ‘limited’ sit at the end of your company name. When you choose ‘limited’, you’ll always be able to shorten it to ‘ltd’, but if you choose ‘ltd’, you want to use the word ‘limited’. Limited companies are often viewed with more respect, so it is often the better choice when deciding between the two.
You may not be able to register names that are of an offensive, aggressive or sensitive nature. In these cases, your application may be rejected and you’d have to come up with a new name.
Can more than one company run under a limited company name
Limited company names and trading names are two completely different things, and it is quite common for more than one business to trade under a company name. Trading names needn’t be related to the company name, but it should be made clear that all businesses trading under the official company name are doing so.
Trading names are not allowed to use the words ‘limited’, ‘ltd’, ‘plc’ or ‘llp’. If your trading name is too similar to competitors or other businesses, you may come under some heat and be accused of ‘passing off’.