Naming a Business

 
Let’s say that Thomas Atkins wants to run a business called Marvelbuy (we checked on the Companies House website that this is not a real business). He can simply be “Thomas Atkins trading as Marvelbuy”. However, if someone is injured using his product, and sues him, he could personally be liable for a large sum of money.

What Thomas can do instead is to set up a company to be called Marvelbuy Limited, which he does by registering it at Companies House. He is the sole shareholder and director, and let’s say he has just one £1 share. This is all legal. The name of the company is “Marvelbuy Limited” which is often abbreviated to “Marvelbuy Ltd”, and anyone who deals with this company can sue it, but the personal liability of Thomas is no more than £1.

Note that if Thomas started a trade as “Thomas Atkins trading as Marvelbuy” and ended up owing people money, he could not get out of this by switching to “Marvelbuy Ltd”. The creditors must have been dealing with Marvelbuy Ltd from the start for Thomas to benefit from limited liability.

The cost of limited liability is that accounts need to be filed with Companies House in Cardiff (for England and Wales) or in Edinburgh (for Scotland). These accounts need to be in a special format. Also, a corporation tax return needs to be submitted with accounts attached in iXBRL format which is best left to an accountant.

Small companies can just file a balance sheet or abbreviated accounts. However, they must produce full accounts for circulation among their shareholders, even if there is only one shareholder who is effectively reporting to himself or herself. The point of this requirement is that HM Revenue & Customs will expect to see a copy of these accounts.

Anyone can go on the Companies House website and look at the balance sheet of Marvelbuy Ltd. Thomas may not like the idea of this, but this is the price to pay for the legal privilege of limited liability.

What Thomas could do is to set up an unlimited company. This would drop the “Limited” part of the name but it would be registered at Companies House. It would not need to file accounts so it would have secrecy, but it still has to produce accounts to circulate among its shareholder(s), with the Revenue sitting in as a self-invited shareholder.

An unlimited company can be called anything. “Marvelbuy” is one possibility, but “www.marvelbuy.co.uk” is also possible. Here we would plead for a sensible name like “The Marvelbuy Company” to stop things getting silly.

Finally Thomas might set up a company, “Marvelbuy Ltd” and get a website like “www.marvelbuy.co.uk”. For a while he trades as “Thomas Atkins trading as Marvelbuy” and later he changes to “Marvelbuy Ltd”. This is one way to protect a name and a website like Marvelbuy, while keeping costs down.

“Marvelbuy” is a fictitious name. If you are looking for a name for your business, then you should search the Companies House register and the Internet to make sure that no one is using the name already. You are like to find that all the obvious good names have been taken. The name must also not be a trademark.