The very first step in formalizing your business is to purchase your business name. You don’t need to have done all the planning before purchasing your business name, and it’s best to do it as early as possible. Before jumping into a name, first make sure it’s actually available!
The process is actually a lot easier than most people think, so if you have a good business name in mind, you should buy it before someone else does.
How to buy a business name
There are two ways to buy your business name. You could go through an agency, which will take care of everything for you. Previously, going through an agency was the go-to option, but now that Companies House allows you to register your business name online, you can go directly through Companies House and buy your business name, all of the time. process taking less than an hour! Companies House is the official UK business register and is accessible to the public.
To create a public limited company, you will need at least one shareholder and one director. However, these roles can be fulfilled by the same person. You will also need an address, a brief description of your business activity, and any notable people who have significant control over the business.
If you are using your home address as your business address and do not want it listed in the public registry, you will need to submit Form SR01 to have your address removed so that it cannot be viewed by the public. .
The six basic steps for setting up a UK limited liability company include:
- Choose a business structure (limited, LLP, Ltd etc.)
- Check that the name you want is available
- Entering your business information with Companies House
- Allocate all company shares
- Complete the memorandum
- Submit everything to Companies House
You should know if your request was accepted within 24 hours.
At the same time, when buying your business name, you should be looking to secure your preferred domain name if you don’t have a website yet.
How much does it cost to buy a business name
If you go directly through Companies House, registering your business costs just £ 12! An agency may charge you up to £ 300 to provide this service, but they usually also offer the purchase of a domain name.
Can you reserve a business name
What if you have a great name for your business in mind but aren’t quite ready to start it yet? Can you reserve a business so that the name is not taken? As with your business, you will need to submit a confirmation statement that the business is dormant. This is usually done within two weeks of the 12th anniversary of the purchase of the company name. This confirmation statement will be made annually and costs £ 13 annually. It will also confirm that various details about your company and its shareholders have remained the same. This way, you are able to retain ownership of your business name until you are ready to officially start operations.
Even if your business is dormant, you will still be required to submit your annual balance sheet 22 months after purchasing your business name, and then nine months after the “end of the year” in each subsequent year. Even if it’s just £ 1 in the bank, be sure to submit your balance sheet, otherwise you might have to pay a £ 150 fee upwards.
When a new limited liability company is registered, Companies House is supposed to notify HMRC, but this does not always happen. Once you have purchased your business name, locate the CT41 (G) form which will be mailed to the address you used when registering. There will be options on this form to indicate that your business is dormant at the moment. The same form will be sent to you every three to four years. However, if your company starts trading, you will need to notify HMRC within 3 months of trading.
How to choose a good business name
A business name is very important to understand correctly. While you can always change your name down the line, it would be a long and expensive process, especially if there is a significant amount of rebranding involved.
For this reason, it is best to “perpetuate” your business name by choosing a name that can grow with your business if you start offering additional services, start doing international business, and so on.
If there is a name for a business that already exists, you will not be able to use it. The same goes for similar names, which are names that are only slightly different due to spelling, punctuation marks, etc.
When purchasing your business name, you will be given the choice of having “ltd” or “limited” at the end of your business name. When you choose “limited” you can always shorten it to “ltd”, but if you choose “ltd” you want to use the word “limited”. Limited companies are often viewed with more respect, so it is often the best choice to decide between the two.
You may not be able to register names that are offensive, aggressive, or sensitive in nature. In these cases, your application may be rejected and you will need to come up with a new name.
Can multiple companies operate under one limited liability company name
Limited liability company names and trade names are two completely different things, and it is quite common for more than one business to trade under a company name. Trade names do not need to be linked to the company name, but it should be clear that all companies that trade under the official company name do.
Trade names are not permitted to use the words ‘limited’, ‘ltd’, ‘plc’ or ‘llp’. If your business name is too similar to that of your competitors or other companies, you risk being in the spotlight and being accused of “getting the word out”.