A common question is “what do I have to do before I can start trading?”. The simple strict answer is nothing, you can just get on with it although there are a couple of obvious exceptions - (1) if you are wanting to operate as a limited company then of course a company will need to be incorporated beforehand and (2) if you are trading in a business which is regulated in any way (perhaps as a dentist or perhaps as an insurance broker) then the regulatory requirements will need to be met.

However, for all but the simplest of businesses it is common (and indeed wise) to seek professional advice before starting. Depending on your circumstances there are a number of areas on which advice could be beneficial. We’ll be extending this article to cover more on those aspects but in the meantime there is one important thing to remember - your business name. Let’s look at that in a little more detail:

Firstly, note that there is no register of business names (other than the requirement for a limited company to be registered with Companies House). Subject to the points we make in this discussion, you can just pick a name and go for it.

Unless you are trading using your own name, care should be taken when choosing a business name. It is a common misconception that the Companies Act 2006 applies to only limited companies but in fact some bits apply equally to sole traders and partnerships. One such bit is Part 41 (sections 1192 onwards). In terms of a business name, these sections broadly prohibit a business name being used which if offensive, which suggests any connection with the UK government or public authority, or which includes a prescribed “sensitive” word. As you might imagine, sensitive words include things like “Bank” but perhaps unlike you would imagine words such as “Accredit”, “Mutual” and “Standards”. This list is long and is worth checking before you go too far down the road including incurring costs on printing etc.

Apart from the restrictions imposed by law as above, you are likely to come unstuck if you use a name which is either the same as or similar to an existing business name (whether a limited company or not) in such a way as might cause confusion and, in particular may cause (deliberately or otherwise) people to believe they are dealing with another business. This is an offence known as “passing off” (you pass yourself off as being that other business). Take a very simple example - you decide to start trading as Heinz.  Take it from us, it won’t be very long before a letter drops on your doormat with the threat of court proceedings. That’s an obvious one but the principle applies more widely and you would be wise to check everywhere you can think of to see that your proposed trading name is not already in use. Try Companies House, Yell.com, try the local phone book, try Nominet (domain names registry)  and of course try Google. Don’t look only for your exact proposed name but look for anything too similar as well.

Now this can be viewed with a degree of common sense - if you are starting a national chain of stores called Henry’s then the existence of a small group of shops in Norfolk called Henry’s Groceries ought to make you think again. Even if they don’t care, you might after a while. On the other hand if you are a one off shop in Cornwall called Henry’s and the other group appears to be located only in an area of Norfolk then it is unlikely to cause problems but perhaps you might think again for safety. If the other business you find is not only small  AND in a distant part of the country but is also in a completely different line of business then this will not cause problems. Neither business is likely to be able to claim it is affected by the other.     

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Starting a business