According to Section 55(1) of the Companies Act 2006, some words intended for use in company names are classed as sensitive or prescribed and as such must be approved by the Secretary of State before they can be used for registration in a Company Name. Companies House is deemed to act as adjudicator on this matter on behalf of the Secretary.
The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2009 (SI 2009/2615) and The Companies Act 2006 came into full force in October 2009. A simple restriction is placed on the use of words that might give the company an authoritative appearance like board, council or watchdog and a national appearance such as Britain or British or national’.
Which Words Are Sensitive?
Sensitive words are split into 3 categories, listed under appendices in the regulations:
- Appendix A – Sensitive Words that require support of an official body.
In order to use a word in the list of sensitive words in Appendix A within a company name, a company must seek support of the relevant prescribed body. The list and the supporting bodies can be found on the Companies House website.
- Appendix B – Sensitive Words that require specific criteria or requirements to be fulfilled.
Words under this appendix require the fulfillment of criteria such as the drafting of certain clauses into the articles of the Company or certain assurances. An example of this is in order to use the word ‘Association’ in a Company name, the Company must be formed as limited by guarantee, with each member having one vote and the articles of association must include a non-profit clause. There is some over-lap within Appendix B, where some sensitive words require the approval of official bodies.
- Appendix C – Some sensitive words are restricted because their use might be a criminal offence.
This appendix applies to words that might be used in a criminal offence if used in a company name and are regulated by a number of acts of law. Once again, a relevant regulatory body must be contacted and permission sought from them before use of the word can be granted. An example here is the use of a word that denotes a professional body, such as “Dentist”; or “Solicitor”;, where a person might be purporting to be something they aren’t.
There are other reasons why words cannot be used in a company name. The regulations state that a word cannot be used in a company name if it is offensive or would otherwise constitute an offence.
Use of characters, symbols, signs and punctuation in a company name is also regulated. A list of these which can be used can be found in the company name regulations (‘The Company and Business Names (Miscellaneous Provisions) Regulations 2009’ (SI 2009/1085)
Other sensitive or prescribed words include those where, if used as part of the company name, they imply that the company is something other than it actually is. Therefore, for example, a limited company cannot use the words “limited liability partnership”; as part of its trading name.
When can sensitive words be used?
Relevant Undertakings – In some circumstances where a company wishes to use a sensitive word as part of its company name, it can make an undertaking or assurance in order to get the necessary permission. As an example, where a company wants to use the word “international”; in its trading name, it is required to give assurances that within the first 5 years of trading it will trade within the boundaries of two other Countries, this living up to its name. The idea is to stop the Company name from becoming misleading.