Naming your business is probably one of the toughest decisions you have to make at the start of your small business journey in the UK.
It’s also one of the most fun. Your business will be a living, hopefully growing entity and you should find a suitable, sellable, and unique name for it.
Before we go any further on the topic, we want to clarify a common misconception: Registering your company name and registering your trade mark(s) are not the same thing. Simply put: You can register a business name and your business can own several trade marks. Also, you can register a trade mark if you’re a sole trader in the UK but it’s not mandatory to register a business name.
You must register a company name if you’re setting up a limited company. A checklist will help you on how to choose and register your business name.
1. You Should Have Permission To Use Some Words And Phrases
UK’s Companies House has some rules and regulations on which words and phrases you should use in your company name. You can check the availability of your company’s name from a variety of sources, but one of the easiest and the most efficient -also official- ones is Companies House’s Company name availability checker, then you can scan the relevant document from “Incorporation and names” guide on gov.uk website. For example, you might want to use the word “agency” if you’re in advertising or another business that using “agency” in your company name is a higher probability. But, you should use the word in a way that won’t imply any connection with government agencies. You can also use the following tools on the UK Government website for more in-depth research.
2. You Need To Register An Official Company Address
You can use your home address as your company address but it’s good to keep in mind that your company address will be publicly available. So, it must be wise to keep your home and business addresses separately. As a solution, you can register your accountant’s office address as your company address, you can rent a virtual office space, or you can use a co-working space and use its address. You can create an account at the Companies House website to register your address.
3. Define Your ‘Business Activity’ With A SIC Code
You have to register your business address via Standard Industrial Classification (SIC) code which shows what type of trading activity you’re conducting. SIC codes are five-digit numbers of which the first two digits define the general trading activity and the last three defines a subcategory of that trading activity. For example, the codes for publishing activities start with 58, and your SIC code will be 58110 if you’re a book publisher. There’s a resource page on the Companies House website where you can search and find all the possible SIC codes.
4. Choose Your Company Director
Your director will be the person who is responsible for running your company. Remember, the steps we’re telling you are the steps to register a limited company which requires at least one director and one member. However, you can set a one-person limited company and be both the director and the member. You can also start as a sole trader but registering a company name is not necessary in that case, as we stated before in this article.
You should also give your directors home and correspondence addresses. There’s the option to use the same addresses, too. Last but not least, you should have the director’s consent.
5. Set Up Your Shareholders and Persons with Significant Control (PSC)
A shareholder is someone who owns the company as a whole or partially and can keep the profit depending on their share of the company. They have the right;
- of one vote per share on company decisions
- to receive a share of profits as dividend payments
- to receive a share of capital, for example, if it closes down
After you name your director, you will choose which type of share they have. The common type is GBP which is the ‘Ordinary’ type of share.
The person(s) who has the most shares (at least 25%) will be the PSC(s) of your company. They will have the right to remove/change the directors and make or influence decisions that affect the company.
6. Decide If You Want To Use Model Articles Of Association
Articles of association are sets of rules and regulations that explain how shareholders and directors run their company. Model articles are standardised version by the UK government and they suit almost all companies. You can write your own articles of association but they have to comply with the law, otherwise, your application may be rejected.
7. Create Electronic Signatures Of Shareholders, Check Your Application, And Send It
Companies House system will ask you to create an electronic signature for each shareholder. You will answer a few questions to create the signature then proceed to submit your application for registering your company. You can check your answer for each step and edit them if you see any mistakes.
8. Pay Your Registration Fee
You should have a company bank account to pay the fee for registering your company. Companies House charges from £10 to £100 for company registration, depending on your business.
You can apply by yourself or you can use an agent to help you with the process. You should remember that you also need to register for corporation tax within three months after your first trade activity.