There’s a lot to consider when choosing your company name, from how to ensure your company name will attract your target audience, to laws surrounding company names. To simplify the process, we’ve put together everything you will need to know about choosing a company name.
Whether you’re a private limited company (Ltd), a limited liability partnership (LLP), a limited partnership (LP), an ‘ordinary’ business partnership or a sole trader, you should have a company name.
The Importance of a Company Name
The first question some people have when choosing a company name is ‘what is the point of a company name’; some see a company name as a bit pointless, believing that whatever their name is won’t actually make a difference to their business. However, it is really important to have one – a company name is one of the most essential ways that customers or clients will interact with you and your brand, and an effective company name can be your most powerful branding means.
Creating an Effective Company Name
To ensure your company name will be effective, think about what you want you want to represent. As a basis, your company name should convey the expertise, value and uniqueness of your business.
There are different types of company name. Some think informative names are the best way to go, as then customers or clients will instantly understand what your business is. Others prefer abstract names, which would give you a blank slate to create an image of how you want to be perceived upon. And others favour coined names (that come from made-up words), as they believe that coined names are more memorable than names using real words.
Informative, Memorable or Coined?
The advantage of choosing a name that informs the customer or client, is that the more the name communicates to customers about your business, then the less effort it is for you to explain your business. Meaningful names can have their issues, for example in the case of geographic or generic names. If your company name had a geographic location in, and then your company expanded beyond that location, then you could be faced with the issue of changing your name.
Coined names can be particularly advantageous, as nearly all real words seem to have been trademarked. Some think that coined names can actually be more meaningful than existing words, for instance ‘Acura’ does not have a dictionary definition, but the word suggests precision engineering as it uses acu, which means precise in numerous languages. By utilising meaningful word segments like ‘acu’, you can create new words that are meaningful and also unique. Coined names can have their issues, as some believe that people prefer real words as they can relate to these and will understand them. Also, new words are complex and could potentially result in the perception that what you are providing is also complex. If the new words are too obscure or too hard to spell and pronounce, then customers may potentially deem your company irrelevant.
If you’re struggling with creating an original company name, then you could use new forms or spellings of existing words. This was the case when Compaq was created – a new computer business came to NameLab with its portable computer, and they thought about the word ‘compact’ and so created the name Compaq, as they thought this would be less generic and more noticeable to people.
There is the option to use a metaphor in your name, and metaphors can be very good if they’ve not been overused, for instance numerous companies consider themselves as the best in their industry, and therefore names like ‘Summit’, ‘Pinnacle’ and ‘Peak’ are very common. A good idea is to look for combinations of positive words, e.g. there is a data storage company called ‘Iron Mountain’, which suggests strength and security with sounding trite.
When thinking about your company name, remember the customer or client. Do not choose a name that is long or confusing, or that contains ‘cute puns’ that only you understand. Choose a name that appeals to you, but ensure the name also appeals to the type of people and businesses you are aiming to attract. It is a good idea to choose a name that will be comforting or familiar and so will evoke pleasant memories, as this result in customers responding to your business on an emotional level. Remember to be enthusiastic about your company name – your company name is the first step towards building a strong company identity.
1. What does your company represent?
2. Is an informative, memorable or coined name more suited to your type of business? Think about the pros and cons discussed above. Researching your competitors may also help.
3. Who are your target clients and will they understand your company name? The name should appeal to the type of people and companies you want to do business with.
4. Is your name or a similar name already registered with Companies House or trademarked? Carry on reading for more information surrounding this and how to check.
Laws around Company Names
When choosing your company name, there a number of things you should be aware of with regards to laws around company names:
• Your company name cannot be exactly the same as another registered company’s name – you can search the Companies House register to see if the company name you want has already been acquired.
• Your company name cannot be similar to another registered company’s name i.e. they cannot be ‘too like’ or ‘same as’ – ‘same as’ names are names where the only variance from an existing name is punctuation or a special character e.g. ‘Hands UK Ltd’ and ‘Hand’s Ltd’ are the same as ‘Hands Ltd’
• Your company cannot include a ‘sensitive’ word or expression unless you have secured permission
• You company name cannot suggest a connection with the government or local authorities
• Your company name cannot be offensive
• When you’ve registered your company name, there are rules regarding how and where you must display your company name
Once your company name is registered, you may want it to be protected by a trademark, which you will have to register for separately. There are advantages to registering for a trademark – for instance, it provides you with the exclusive rights to use the name in the UK in relation to the classes of goods or services stated in your registration. If anybody attempts to use it, or a name like it, in relation to goods and services in those classes, then you can stop them from doing so, and force them to deliver up any goods which have your mark on them. You can also recover damages and an account of any profits they have generated. Another advantage of trademarking is that you only have to renew your trademark every ten years.
There are laws around registering for a trademark too – your trademark must:
• be distinctive for the goods and services you have applied for
• not be similar or identical to any earlier marks for the same/similar goods and services (you can check for a trademark here)
• not be deceptive, or contrary to law or morality
We hope this article helps you to create your perfect company name. We know that choosing a company name isn’t the only aspect that small businesses, contractors and freelancers struggle with; many often struggle with the accountancy side of things. ICS Accounting can take the stress of accounting, tax and paperwork away from you, allowing you to focus on your company. Contact us today by calling us on 0800 195 3750 or speak to us online.