News Item

Company Names - New Provisions on Company Name Disputes

The provisions of the Companies Act 2006 that create a new procedure for objections to company names comes into effect on 1 October 2008. The new provisions are in addition to the old procedure under the Companies Act 1995.

The Old Provisions

Under the old provisions, if a company registers a name that is the same as or "too like" a name already on the register then the Registrar of Companies will not allow that name.

Objections can still be raised to names that are the same or "too like" other registered company names and Companies House will continue to deal with these objections.

The old provisions are often found to be ineffective as "too like" has been interpreted very narrowly.

The New Provisions

The new provisions introduce a new right for any person (the applicant) to object, by application to a company names adjudicator, if a company's name is:

• the same as a name associated with the applicant in which he has goodwill (goodwill includes reputation of any kind); or
• sufficiently similar to such a name that its use, in the UK, would be likely to mislead by suggesting a connection between the company and the applicant.

If either of the grounds set out above is established, the objection will be upheld unless the respondent can show that:

• the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or
• the company is operating under the name, or proposing to do so and has incurred substantial start-up costs in preparation, or was formerly operating under the name and is now dormant; or
• the name was registered in the ordinary course of a company-formation business and the company is available for sale to the applicant on the standard terms of that business; or
• the name was adopted in good faith; or
• the interests of the objector are not adversely affected to any significant extent.

Even if any of the first three sets of circumstances apply, the objection will still be upheld if the objector shows that the main purpose of the respondent in registering the name was to obtain money (or other consideration) from him or to prevent him registering the name.

If any objection is upheld, the adjudicator can direct the company to change its name to one that does not raise objection and set a deadline for such change. If the name is not changed by the deadline, the adjudicator may determine a new name for the company.

The new provisions provide another important avenue, in addition to existing passing off and trade mark infringement procedures, for anyone with goodwill in a name to object to that name, or a misleadingly similar name, being registered as a company name where the registration can be shown to be an opportunistic rather than genuine one.