Sole Trader Business Names
The only two ways to register a business name in the UK are to form a limited company or get a trade mark. However the majority of businesses in the UK (62.7%) operate as Sole Traders. There is no register of Sole Trader business names in the UK. This makes it difficult, but not impossible, to avoid conflicts between businesses over the use of names.
Sole Traders and Trading As Names
When you register as a Sole Trader you register your own name with HMRC and this is the name that you should be trading under (e.g. John Smith). However, you can use a ‘trading as’ name. So you could be “John Smith trading as Slapdash Decorators”.
You have to show the first part of this (John Smith trading as) on any signs, adverts or websites but it does not have to be the same size as your ‘trading as’ name. So, for instance, your website could be slapdashdecorators.com and could have Slapdash Decorators across the top of every page as long as you have a clear statement at the bottom of the page that your are John Smith trading as. This allows you to put across a brand image in a way that using your own name might not.
The big problem with this is that your ‘trading as’ name will not be registered or recorded anywhere. Therefore there is nothing to stop anyone else from using it and potentially taking advantage of your brand image. There is also no way to check if another sole trader is using your trading as name, leaving yourself open to claims of passing off.
Avoiding Passing Off and other Conflicts
Because there is no central register of names used by Sole Traders it is very hard to tell if the fantastic idea you have just had for your new business name is already in use. If you do accidently start using a name which an established business has a claim to you could be open to claims of passing off.
While passing off is often hard to prove trade mark infringement is not. In fact trade mark infringement is the strongest form of protection for business names in the UK. If you use a business name which someone has a trade mark on then they can force you to change your name or to stop trading.
The best way to avoid both passing off and trade mark problems is to do some research on the name you want to use. A couple of hours spent checking the local phone book or doing some internet searches can save you a lot of trouble down the line. Alternatively you can pay someone to do a professional trade mark search for you.
Protecting Sole Trader Names
Being a sole trader does not register or protect your business name but there are some steps you can take.
It is quite common for people who want to be a sole trader to register a limited company with their preferred business name. This makes sure that the name is reserved on the Companies House register and that no-one else can register the same name. It also gives you a fixed point to show you have asserted your rights on the name which can be useful if you ever get involved in a trade mark or passing off case.
Unfortunately ‘reserving’ a company name is a little misleading. What you are actually doing is forming a limited company. However this company can then he held ‘dormant’ (non-trading) while you conduct your business as a sole trader. An advantage of this approach is that as your business grows, and trading as a limited company becomes more attractive you have the company already formed and can simply turn it from dormant to active and start using it.
Most modern businesses will want to have a website. To have a website you will need a domain name and ideally this should match your business name. Registering as many variants of your domain name as you can stops anyone else from getting them (or alerts you that somebody already has them) this will reduce the chances of someone impersonating your company online and stealing your traffic.
As we said above trade marks are the most powerful form of protection for business names in the UK. However getting a trade mark is expensive and time consuming. It is likely to cost hundreds of pounds and take a couple of months to get your name trade marked but it if you are serious about protecting your business name a trade mark registration is the best thing you can do.
Online Sole Trader Business Registration
If you think that being a sole trader is the right way to start up your business we have three packages for you to choose from:
Alternatively you can view our limited company formation packages.
If you have any further questions, take a look at our Business Registration FAQ page or give one of our business consultants a call on 01245 492777.