Legal entities...?

JAYk_2

Why would a sole trader create a dormant limited company to 'protect' their buiness name; does a sole trader not have basic rights in regards to their business name? Am I missing something here, I hear alot of this...

Mistral001

The answer is No. The name does not exist in law and the sole trader trades under his/her own name despite what is put on top of the letter head or on the side of a van.

That is why if you are a sole trader you should put your name on invoices. Basically you are the one and not the firm/business who is responsible for all financial responsibilities.

Pennywise

No, there is no legal business name protection. To protect a name you have to register it as a trademark if that's possible. Your only other recourse is the "passing off" law which applies if someone else is trying to "pass themselves off" as you to gain benefit of your brand/image, which may include using your business name, or can extend to using your image. But if someone else, in a different location just happens to use your business name and isn't copying your image, then it's doubtful the passing off law would apply.

Registering a limited company isn't a particularly good answer either - as someone else could easily register a similar company name, i.e. if your company name was John Smith Limited - someone else could register John Smith (Northern) Limited or John Smith (Electricians) Limited, and again, your only right to object would be on the "passing off" grounds - Companies House aren't particularly bothered about similar names.

A lot of people do have this wrong belief that a business name is somehow protected - it isn't, and the multitude of so-called business names registers don't have legal standing either. If you have a brand/image, then get it trademarked and get your logo and other marketing images copyrighted.

At the end of the day, Companies House won't help you as their only concern is that company names must be different and must comply with Company Law. In cases of dispute with someone else using the same or similar name, your only option to challenge is to go legal via a commercial solicitor (at your cost!).

JAYk_2

Interesting. So, what in detail would be regarded as passing off though. If a sole trader or limited company sets up a business called John Lewis Boutique seling clothing,shoes and the like (similar to John Lewis) what implication mght there be if any?

texranger

JAYk wrote: »

Interesting. So, what in detail would be regarded as passing off though. If a sole trader or limited company sets up a business called John Lewis Boutique seling clothing,shoes and the like (similar to John Lewis) what implication mght there be if any?

well in this case John Lewis will have their name and brand trademarked, so they would send their legal team after you.

their was a case several years ago about a green grocer who had a similar name as harrods ( his own name) which he had above his shop 15 yrs in green, but hew was forced to remove this and change this due to it being similar to Harrods.

io have 3 dormant ltd companies to protect my business names from being used by competitors in the same field. this gives some protection ( yes i got advice from a commercial solicitor). this will only give protection from competitors who set up under the business name after you registered the company name.

Search_2

I just came across this thread and wondered about when you trade as, for instance, xname.co.uk? Does that give you any more 'protection' without being a limited company or not? I'm just thinking for a future little venture, maybe by using the full web address as the t/a name it could stop any problems with any potential competitors using similar names?

JAYk_2

Is it possible to be a sole trader and have a Ltd company, same industry/sector? If so, how will that work accounting wise etc.

Mistral001

No.

Sole trader is just a term to describe anybody who trades unless they set up an entity such as a Ltd company or a formal partnership. If you set up such an entity you are not a sole tarder.

It is a term which has come into vogue only quite recently and I think it is as a result of money matter shows on the radio and shows like Dragons Den, where the Dragon or presenter asks whether the person is "a sole trader". It is basically cuts to the chase. It basically is the default positing unless you decide to set up partnership or Ltd comapany or some sort of other legal entity.