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When starting a business as a sole trader in the UK, you will need to consider your business name. Choosing a business name can be a fun and creative process and allows you to put your stamp on your new venture. There are, however, several considerations you should bear in mind when deciding your business name to avoid future problems. This article discusses the best methods to choose an effective business name and easy mistakes to avoid.
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What are Sole Traders?
Sole traders are individuals who run a business as an individual in a self-employed capacity. As a sole trader, you will have to register with HMRC and complete a self-assessment tax return every year. You will benefit from any profits accrued from your business after paying taxes, but you will also be responsible for losses. Sole traders are fully responsible for the running of the business, including day-to-day operations and record-keeping.
Initial Steps When Choosing Your Business Name
Generally, you have a lot of flexibility when choosing a business name, though there are a few restrictions to note. For one, you want to avoid naming your business the same as (or similar to) a competitor. Choosing a unique name not only allows your business to stand out in your marketplace but saves you from potential trade mark infringement.
You can use the Companies House register to search business names that are limited companies, which can be useful when trying to avoid duplication. You can also use the trademark register through the Intellectual Property Office to search for existing registered trademarks.
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Using Your Own Name as a Sole Trader
A sole trader business can trade using their own name, such as Paul’s Plumbing, Bill’s Bakery, or Georgina’s Gym. Using your own name as your trading name is fairly common for sole traders.
Whatever you choose to name your business, you will need to include this name and your business address on all official paperwork. Notably, ensure your new business name:
- is not offensive in any way;
- does not include the words ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘PLC’;
- is not the same as any existing trade mark;
- does not contain words associated with the government unless consent is granted; or
- does not contain sensitive words.
Protecting Your Business Name
Unlike registered companies, there is no requirement to formally register your sole trader name. Without legal protections in place, it can be challenging to protect other businesses from using your name.
One method of protecting your business name is registering it as a trade mark with the Intellectual Property Office. You will have to meet the legal requirements of the trade mark application system. Once you register your business name as a trade mark, you can control how people use your business name. Likewise, you can take legal action against people who use your business name without your permission.
Key Takeaways
When deciding upon a business name for your sole trader business, you have a great degree of flexibility. You can trade using your own name or come up with a branded name that fits your business. Companies House and the trade mark register are useful for checking any names you have in mind to avoid duplication.
You will also need to take care that you avoid anything offensive within your business name. As a sole trader, you will be obliged to submit a self-assessment tax return and must include your business name on any official paperwork.
If you need help or advice regarding your sole trader business, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
A sole trader is an individual who runs a business on their own in a self-employed capacity. They are responsible for all aspects of the business, including profits, losses, and administrative tasks.
You will need to submit an annual self-assessment tax return and pay taxes. Therefore, you must register as a sole trader as soon as you set up your business and complete the initial registration with HMRC.
Consider what type of business you have and any branding strategy you have in mind. Further, you should search existing businesses to ensure you do not name your business after someone else.
Registering your business name as a trademark with the Intellectual Property Office can help protect it. This gives you legal rights to control its use and take action against unauthorised use.
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