New regulations which liberalise (to some extent) the rules governing what companies and LLPs can call themselves, and the trading disclosures they have to make, will come into force on 31 January 2015.
Although the Companies Act 2006 was intended to simplify company law, the rules governing company and LLP names and trading disclosures that emerged from that Act are confusingly contained in at least six different sets of regulations. Recognising this, the Government has decided to consolidate the rules into two new sets of regulations and to revoke the existing regulations.
At the same time, the Government has taken the opportunity to liberalise some aspects of the company names and trading disclosures regime. However, most of the existing rules will remain in place, and so for many companies and LLPs the biggest change may be that there are now only two sets of regulations to deal with, rather than the previous six – although there are some useful relaxations around the rules on names.
What has changed?
The majority of the rules on company and LLP names will, from 31 January 2015, be contained and consolidated in a new set of regulations: The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015 (the “New Regulations”). A list of the regulations that have been revoked is set out at the end of this article.
The principal changes from the regime existing until 31 January 2015 are:
- An increase in the list of characters that can be used in a company name: Accents, diacritical marks (for example, Õ) and ligatures (for example, Æ) will now be allowed, as set out in the New Regulations. At the moment, only Roman alphabet letters and a small number of additional marks are allowed. (However, as a result of this change the rules relating to “same as” names have changed. So a proposed company name cannot be registered if the only difference between the names is the inclusion of, for example, a diacritical mark. So “THÕDY LIMITED” would be considered the same name as “THODY LIMITED” and so could not be registered.)
- Names to be ignored when considering whether a name is the “same as” another: This list of names has been reduced by the removal of “EXPORT”, “GROUP”, “HOLDINGS”, “IMPORTS”, “INTERNATIONAL” and “SERVICES”. So, for example, “HARVEY GROUP LIMITED” will now be considered as a different name from “HARVEY HOLDINGS LIMITED”.
- Trading disclosures: Where more than five companies share the same office, place or location, it will no longer be a requirement for the names of all those companies to be on constant display. Instead, they can be shown in rotation (i.e. digitally), or be available for inspection.
There is a second new set of regulations coming into force on 31 January 2015 (slightly taking the edge off the Government’s aim of consolidating the company names rules).
The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014 set out a revised list of names that the Secretary of State must approve for use in a company or LLP name. The Secretary of State exercises that power under sections 55 and 1194 of the Companies Act 2006 and under regulations relating to LLPs.
Twenty-six words have been removed from the list. These include “National”, “European”, “International” and “United Kingdom” – so those words can now be used without first getting permission from the State.
Conclusion: some helpful measures
There are some other minor changes and closures of loopholes in these new regulations. In the Government’s words, the “aim of all the changes being made…are [sic] to simplify the process and reduce the times that a company might have a proposed name rejected by the register”.
The reality for most companies is that there are some helpful measures, such as the removal of particular words from the “same as” list (see the second bullet point above), but few changes of great importance. So, despite the consolidation of the rules into two new regulations, the company and LLP names and trading disclosures regime remains substantively the same.
List of repealed legislation
The Company and Business Names (Miscellaneous Provisions) Regulations 2009.
The Company, Limited Liability Partnership and Business names (Miscellaneous Provisions) (Amendment) Regulations 2009.
The Company, Limited Liability Partnership and Business Names (Public Authorities) Regulations 2009.
The Companies (Trading Disclosures) Regulations 2008.
The Companies (Trading Disclosures) (Amendment) Regulations.
The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2009.