I am the bookkeeper for a sole trader who is considering incorporation. My problem concerns Business Name and Ltd Name. At the moment the sole trader is operating under the business name XYZ. The company XYZ Ltd is not available for use. I understand that the Ltd name can be quite different from the Business Name. I have seen on forums that if this is the case then there needs to be a statement on invoices and other official documents with the format XYZ is a trading name of ABC Ltd. But Ive also read that the format needs to be ABC Ltd trading as XYZ. I have also seen invoices from companies bearing only their business name with no reference to their Ltd name.
So I am confused.
I have read Incorporation and Names published by Companies House but cannot find where this covers the format of how the name should be displayed.
When you incorporate it is a new business. You need to guide the client away from thinking that it is a continuation of the same.
The business run on a self employed basis sells its assets to the new limited company.
Regardless as the trading as name, All documents and websites (but not business cards) must show on them the incorporated name, incorporation reference number and where incorporated (i.e. England & wales).
One thing to be careful of in the scenario you describe is being a limited company trading as the name of another limited company as you are opening yourself up to a passing off claim where the other company make both stop the company from using the trading name and seek damages.
Sitations for the required information requirements would be the Companies Act (2006) and the Companies (trading disclosures) act (2008)
Additionally if the business is selling online also refer to Electronic Commerce Regulations (2002) and Consumer Contracts Regulations (2013)
kind regards,
Shaun.
p.s. companies that do not nclude their incorporated name on invoices are in infringement of the law.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks for your reply.
I think I may have been less than accurate with my example resulting in your comments about using another limited company's name - this is not the case.
So to restate, imagine the business name is "Browns Widgets" and the incorporated name is (say) ABC Ltd.
The business name is required to be retained because it is well recognised.
I understand about displaying the registered name (ABC Ltd) at the Registered office etc.
But what needs to be displayed on e.g. Invoices which currently are headed "Browns Widgets"?
Is it "Browns Widgets is a trading name of ABC Ltd"
Or "ABC Ltd trading as Browns Widgets"
or something else entirely ?
Because I can't see in the documentation you listed anything covering this aspect.
Sorry to be a pedant...
Regards
Bazza
Generally you would see Browns Widgets as the header and then in the footer where you have the detail you would state that Browns Widgets is a trading name of ABC ltd a company registered in England & Wales, registration number 12345678.
Section 6, the companies (trading disclosures) act (2008)
Registered name to appear in communications
6.(1) Every company shall disclose its registered name on
(a)its business letters, notices and other official publications;
(b)its bills of exchange, promissory notes, endorsements and order forms;
(c)cheques purporting to be signed by or on behalf of the company;
(d)orders for money, goods or services purporting to be signed by or on behalf of the company;
(e)its bills of parcels, invoices and other demands for payment, receipts and letters of credit;
(f)its applications for licences to carry on a trade or activity; and
(g)all other forms of its business correspondence and documentation.
(2) Every company shall disclose its registered name on its websites
Now think about that, as with most things accountancy there is as much regulation written between the lines as on the paper.
If you are trading as Browns Widgets and your documents are headed browns Widgets that on its own is not meeting section 6 as you are not actually browns widgets. You are ABC ltd. and you need to let the end customer know who they are dealing with in all of the above forms. So, as I say, in the footer you need to state the real name rather than the trading name and also include the link between the trading name and the real name for reader clarity.
See, it was there. You just wouldn't find it with a straight search because you would be looking for stated rather than implied content.
Hope that helps,
Shaun.
p.s. if Browns Widgets doesn't exist then why not just change the company name to what you want it to be? That would also gaurd against someone else coming along and buying the company name that you are trading as.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.