Hi there. Nicholas Campion here from 1st Formations, and welcome to another edition of Whiteboard Thursday.
In today's bite-size video, we're going to find out if you need to use the word
Limited or Ltd in your company name. Before we start, if you find this video useful, make
sure you share it on your social media networks, and let people know about this resource.
This would certainly help me and our channel! But for now, let's get started.
Now, Limited companies can either trade under their official registered name or another
business name. However, almost all private companies are required to include the word
Limited or Ltd at the end of their registered company name during the incorporation process,
unless they qualify for exemption.
So, using the word Limited or Ltd is just one of the many company name rules that you
must adhere to when choosing a company name. Some of these rules relate to the uniqueness
of a company name, whilst other rules prohibit the use of offensive or sensitive words and
expressions. OK, so now that we have cleared that up, let's throw in a curve ball - Limited
or Ltd should not be used in a trading name. Confused? Don't be! Most companies trade
under their official registered name, which will usually end in Limited or Ltd. If you
trade under your registered company name, you must show the name in full (including
Limited or Ltd) on certain signs and stationery.
However, it is also possible to trade under an alternative business name. Business names
(also known as trading names) can be any name that does not infringe another company's trademark
and does not contain any offensive or sensitive words. Furthermore, a trading name must not
include any of the following words or abbreviations: Limited, Ltd, Limited Liability Partnership,
LLP, Public Limited Company, PLC, or any Welsh equivalents of these English words. Right.
Let's discuss for just a moment where you must display your company name in full. While business
names can be used for general trading purposes, registered company names must also be displayed
in full on physical signs. Companies are required to display their full company
name on a sign at their registered office address, as well as any other address where the business
operates from. And this sign should be visible 24/7
although this rule does not apply to private residential addresses.
The next place is Websites, emails, and stationery. Your registered company name must be displayed
on business websites, emails, letters, promotional material, and company stationery.
Why you may ask? This is to ensure that the public is aware that your business
is a limited company. So the rule is you must always use Limited or Ltd in your company
name, right? Well, almost right. You see, there are instances when a company can be
granted exemption from including Limited or Ltd in a company name.
In accordance with section 60 of the Companies Act 2006, there are certain circumstances
in which limited companies are permitted to omit the word Limited or Ltd (or the Welsh
equivalents), namely if the company is a registered charity or it is a limited by guarantee company
(as opposed to limited by shares); and its articles of association state that the company:
promotes or regulates commerce, art, science, education, religion, charity or any other profession;
that it is prohibited from paying its members (such as through dividends); and
requires that in the event of the company being wound up, the firm's assets will
be transferred to another body with similar charitable objects.
The company formation application form includes a section for claiming exemption from using
the word Limited in a company name. To claim exemption after incorporation, limited by
guarantee companies must complete Companies House form NE01.
And that's everything. So in this short video, we've discussed why you need to use Limited
or Ltd in your registered company name, and not use it in your trading name. We have also
covered where you need to display your company name, and the exemptions to the use of Limited
or Ltd. If you are in the process of choosing a company name, why not visit the 1st Formations
homepage and check if the names you like are available to use as a registered company name?
If you have any questions, please do leave a comment and make sure you subscribe to receive
more videos just like it. We'll see you next time. Cheerio!