© 2011 itsa Ltd on behalf of the Trading Standards Institute.
Understand the law regarding your business trading name; there are particular rules that only apply to 'companies'
This guidance is for England, Scotland & Wales
Requirements for the use, display and disclosure of company, business and trading names are detailed in the Companies Act 2006, the Company, Limited Liability Partnership and the Business (Names and Trading Disclosures) Regulations 2015.
There are requirements relating to the name a business chooses to trade under and rules to prevent the use of names that could mislead the public.
In the guide
Who do the business names provisions apply to?
This legislation gives detailed requirements regarding names that businesses can choose to trade under and how particular details about businesses have to be disclosed to their customers. The provisions apply to:
- individuals who trade under a name that is not their own
- partnerships that do not operate under the names of the individual partners
- companies / limited liability partnerships
PART 1: Sole traders & partnerships
Sole traders and partnerships that are not registered companies are required to display and disclose detailed information about their businesses when they use a business name that is not their own or one that uses all the names of the partners. For example, if John Smith has a shop called Happy Family Bakers the requirements would apply to him; were he to call his business Mr Smith the Baker the legislation would not apply. The same would apply to a partnership. If John Smith and David Jones had a business partnership called Happy Bakers the requirements would apply; were they to call their business J Smith and D Jones Bakery the legislation would not apply.
Business names display
Where a sole trader or partnership carries on business under a name that is not that of the proprietor or partners their details must be fully disclosed to customers and suppliers in order to inform them who they are doing business with.
The information that is required to be disclosed is:
- the full name of the proprietor or of all of the partners
- an address at which the business can be contacted and have legal documents formally served on it
The required information must be:
- displayed in a prominent position in all business premises where customers and suppliers have access
- included legibly on all business documents:
- written orders for goods or services
- invoices and receipts
- written demands for payment
- business websites (a requirement under the Electronic Commerce (EC Directive) Regulations 2002)
- given immediately in writing to any customer or supplier who requests business details information
Partnerships of more than 20 persons are not required to disclose details all of the partners in business documents if:
- a list of the names of all the partners is maintained at the principal place of business
- none of the partner's names appears in documents except in the text or as a signatory
- documents state legibly the address of the partnership's principal place of business and that the list of the partners' names is open to inspection there
- the list of the partners' names is available for inspection during office hours
Below is an example of a notice that could be displayed to comply with the business premises requirements for a sole trader. Partnerships need to include the full names of all of the partners in such a notice.
PARTICULARS OF OWNERSHIP OF
Happy Family Bakery
as required by section 1204 of the Companies Act 2006
Full name of owner: John Smith
Address at which documents relating to the business may effectively be served:
The Cottage Bakery
10 Cobb Street
PART 2: Companies
The following requirements apply only to companies that are registered with Companies House.
Rules on names
There are specific rules in the legislation concerning incorporation and names that can be used and registered with Companies House, full guidance on which can be found on the GOV.UK website.
Briefly, the rules concerning company names include:
- having a maximum of 160 characters
- not being the same as a current registered company
- not infringing registered trade marks
- containing only permitted characters, punctuation, abbreviations, signs and symbols
- not using words or expressions that are banned or need approval from the Secretary of State such as:
Displaying company information
Active companies must display their full registered company name at:
- their registered office
- all other locations at which they carry on business except those used primarily for living accommodation
- an inspection place at which required company records are kept available for inspection
This requirement does not apply to companies where every individual director is required to refrain from disclosing protected information to a credit reference agency.
MANNER OF DISPLAY
Where business premises are shared by up to five companies the registered name must be:
- easily seen by visitors
- continuously displayed
Where business premises are shared by six or more companies each company must ensure that its registered name is either:
- displayed for at least fifteen continuous seconds at least once every three minutes
- available for inspection by visitors
REGISTERED NAME TO APPEAR IN COMMUNICATIONS
Companies must disclose their registered name on:
- business letters
- official publications
- bills of exchange
- promissory notes
- order forms
- cheques signed by or on behalf of the company
- orders for money, goods or services signed by or on behalf of the company
- bills of parcels
- demands for payment
- letters of credit
- applications for licences to carry on a trade or activity
- all other forms of its business correspondence and documentation
FURTHER PARTICULARS TO BE DISCLOSED
Companies must disclose the following particulars on their business letters, order forms and websites:
- the part of the United Kingdom in which the company is registered
- the company's registered number
- the address of the company's registered office
- that it is a limited company for companies exempt from the obligation to use the word limited
- that it is a limited company for community interest companies which are not public companies
- that it is an investment company where appropriate
If companies disclose the amount of share capital in those places the disclosure must be as to paid up share capital.
DISCLOSURE OF NAMES OF DIRECTORS
Where a company's business letters includes the names of any individual or corporate director of the company, other than in the text or as a signatory, the letter must disclose the names of every director of the company.
REQUESTS FOR COMPANY INFORMATION
Within five working days of receiving a written request for company information from anyone it deals with in the course of business companies must send a written reply disclosing:
- its registered office address
- the location of any inspection place
- the type of company records that are kept at that those places
LEGIBILITY OF DISPLAYS & DISCLOSURES
All information that is required to be displayed or disclosed must be clearly legible.
It is an offence for a business or company to fail to comply with these requirements. The maximum penalty on conviction is a £1,000 fine plus, for continued contravention, a maximum daily default fine of £100.
Also applicable to any business that trades through advertisements or online are the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These Regulations require a supplier to provide a prospective buyer with details about themselves. Before a consumer concludes an online transaction or responds to an advert etc the supplier must provide details of the postal address of their business, so that a consumer may address complaints in a durable written format.
The Electronic Commerce (EC Directive) Regulations 2002 require a business selling or advertising online to provide certain information on its website, some of which overlaps with the above requirements, such as the company or business name, a UK geographic address and detailed information on pricing, delivery charges, etc.
See 'Consumer contracts - distance sales' for more information.
This information is intended for guidance; only the courts can give an authoritative interpretation of the law.
The guide's 'Key legislation' links may only show the original version of the legislation. Information on amendments to UK legislation can be found on each link's 'More Resources' tab; amendments to EU legislation are usually incorporated into the text. Amending legislation is linked to separately where it is directly related to the content of a guide. Please contact us for further information.
Last reviewed/updated: July 2015
© 2015 itsa Ltd.