A business wishing to trade as a UK company must be registered at Companies House. This process includes choosing and registering a company name. A company may only have one registered name, but can have multiple trading names, as required.
There are, or can be, a number of issues to consider when contemplating such a thing. First of all, The Business Names Act imposes certain legal requirements on companies adopting this business technique.
The most obvious point is the trading name cannot be the same as or similar to another company or business name in a way that might be confusing.
In the same way that you cannot register a company name with the same name as a company that is already registered, you cannot register one company name which is completely different then use a trading name which is the same as a already registered and trading company name.
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Thirdly, if using a trading name as part of carrying out business, a company is required to display the appropriate information in all places where the business is carried out and on all documentation, invoices and alike. The use of a trading name might seem appealing to most businesses as it is easier than registering a company under the new name.
However, there are several pitfalls.
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Because a trading name is not registered as a limited company, it is not properly protected. There is always the danger that at a later date someone else may register the trading name as a limited company and then stake their claim.
This could clearly cause complications for your business as they will have the right to the name and therefore can force you to stop using it.
So it is advisable to carry out a company formation and register the trading name as a limited company, then keep that company dormant. This might seem to defeat the point in using a trading name, but because a dormant non-trading company is just that, the registration is low cost and maintenance is straightforward.
The other obvious danger is that someone else has the trading name registered as a trade mark. This could lead to costly legal battles and a headache for the company. It is business trading as to carry out a trade mark search and a trade mark registration with regards to the business trading name, both in order to protect it from use from others and to ensure it has not already been registered.
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This article is not meant to be comprehensive legal advice, the law is subject to change and is complex in nature with regard to trading names. Please consult a legal professional for business trading as advice.