Sensitive Company Names
What is a sensitive company name?
A sensitive name is one that suggests certain characteristics of a company. These names can imply many things, mostly to do with the status of a company or its function. That is why there are rules regarding who can use sensitive words in their company name, and these are enforced by company registries. Names must not mislead in anyway and applications for the use of sensitive words are taken seriously by registries.
Examples of sensitive words
Based on the UK, here are some ground rules for different types of sensitive names:
- You will need to provide evidence of association with two or more limited companies.
- If the name clearly shows that the company is to promote the interests of a group of individuals, then the name will normally be approved.
- You cannot use this word in your proposed name unless the company is a holding company as defined under section 1159 of the Companies Act 2006.
- You will need to provide evidence of holding 50% of the share capital of another company.
- If you wish to use this word as a prefix, you need to show that a significant part of the company's activities is in trading overseas.
- You must also state the country/countries you are trading overseas with.
- If you wish to use the word International elsewhere in the name, you will need to confirm that the company trades overseas in at least one country.
- For a company to use any of these words they would need to be limited by guarantee and the articles of association should include a non-profit distribution clause which provides that any profits should be used to further the objects of the company and not be paid to the members as dividends. The articles should also include a one member one vote clause.
- If the company is a residents or tenants association these requirements do not apply. In this case, each member should only have one vote in the company, and official company documents should contain a not for profit distribution clause.
- For a company to use any of these words they would need to be limited by guarantee with each member having one vote and include a non-profit distribution clause in the articles of association. The articles should also reflect the purpose of the company.
| Institute, Institution
- This would only be approved for existing organisations which are carrying out research at the highest level or to professional bodies of the highest standing. These organisations are established in the field but operate under a different name
- You will need to explain why there is a need for the proposed institute or institution and that it has appropriate regulations or examination standards
- Also, support from other independent or representative bodies would need to be shown to support your application.
| Benevolent, Foundation, Fund
- Companies will need to be limited by Guarantee and have a non-profit distribution clause to be approved.
- These words will not be allowed if they give the false impression of charitable status.
- There are various restrictions on the use for this word.
- Financial or Investment Trust - to use either of these terms, a written assurance needs to be provided that substantial paid-up share capital or other funds will be achieved within a reasonable period after incorporation.
- Pensions or Staff Trust - The name of the company must include the parents company name
- Unit Trust - subject to some criteria, seek advice from the local registry if this name id required
Names needing a non-profit clause in their Memorandum of Association, other criteria are detailed below:
- Charitable Trust - the objects of the company must also be charitable
- Educational or Artistic Trust - founders should be in high regard within their field
- Enterprise Trust - evidence of business enterprise from an official body such as local government, other businesses or banks
- Family Trust - name must identify the company as a family trust
| Assurance, Insurance
- If a company intends to act as an underwriter then the registry will seek independent advice. If they want to only provide insurance services then they must include a word such as 'agents', 'consultants' or 'services' in their company name.
- The same rules also apply to: Assure, Insurer, Re-assurance, Re-assurer, Re-insurance or Re-insurer
Similar names to another company are normally not allowed
A company cannot be incorporated with any name that is identical or very similar to an existing company name.
State official sanctions
There are restrictions for any name that requires approval of the government or the Royal Family. These names are as follows:
Assurance; Royal; Bank; Trust; Building Society; Trust Company; Chamber of Commerce; Trust Corporation; Chartered; Trustee Company; Cooperative; Trustee; Imperial; Savings; Insurance; Savings and Loan; Underwriting; Indemnity; Surety; Guarantee; Casualty; Municipal and any names suggesting connection with the Government departments, municipality or other local authority.
What are sensitive words and expressions?
These are words and expressions that, when used in a company name, may imply business pre-eminence, a particular status or a specific function. For this reason, they have been prescribed in regulations as requiring the approval of the Secretary of State. The aim is to ensure that use of the word is justified so that the public is not misled by the name.
Words which imply national or international pre-eminence:
Words which imply business pre-eminence or representative or authoritative status:
||HSC (Health and Social Care)
||HPSS (Health and Personal Social Services)
Words which imply specific objects or functions:
||Industrial & provident society
Words or expressions in the following list need the approval of the Secretary of State. If you want to use any of them in your company name we will need to write first to the relevant body to ask if they have any objection to its use.