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Sole Trader’s choice of Business Name – Are there any restrictions?

Are there any restrictions on a sole trader’s choice of business name?

As a sole trader you may trade under your own surname (it makes no difference whether your first names or initials are added) or under a business name. The former will not be classified as a business name, but if you trade under the latter, your business name must conform to Part 41, sections 1200-1208 of the Companies Act 2006. The rules also apply if the business name includes your surname together with other words, for example ‘John Sparks Electronics’. A business name must not be chosen if:

• its use would be a criminal offence;
• it includes words and abbreviations that denote a particular type of business if the business is not of that type. These words and abbreviations include 'limited', "unlimited", "public limited company", Community Interest Company", their Welsh equivalents and their abbreviations with or without full stops;
• the name suggests a connection with Her Majesty’s Government or any part of the Scottish administration;
• the name suggests a connection with any local authority or any specified public authority; and
• it includes a sensitive word or expression without the approval of the Secretary of State.

If you decide to adopt a business name you should check that it is not identical or similar to one already used by a business dealing in identical or similar goods and services to those you will provide. Not only should you avoid using an identical or similar name that is in use, you should not select a name that is obviously identified with another business even if the goods or services are not similar to those you will provide (such as using the name of a famous brand of fizzy caffeinated soft drink if you are providing coal and fuel services). This could cause accusations of "passing off" and lead to legal action.

There is no central register of business names and accordingly, no requirement to register a business name. However as with company names, when choosing a business name, checks should be made on the internet, domain name registries, local phone books, relevant trade journals or magazines and the trade marks registry to see if any other business is already using the name. Whilst limited companies' names can be easily checked at Companies House, it is much more difficult to check on other sole traders and partnerships trading under a business name, so these searches are essential.

If your selected/preferred name appears to be available, then you should lodge details with a solicitor to establish the date from which you commenced using that name for future referral if that name is subsequently challenged.

If you use a business name, you must display a sign with:

• your name (e.g. "John Sparks, t/a JS Electronics"); and
• a service address in the UK for sending documents relating to the business,

in any premises where your business is carried on and where customers and/or suppliers have business access.

The same information must be included in legible characters in all your:

• business letters;
• written orders for goods or services to be supplied to the business;
• business emails;
• invoices and receipts issued in the course of the business; and
• written demands for payment of debts arising in the course of the business.

It must also be supplied in writing at the request of any person with whom you are doing business.

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