How to use a trading style with a company name?
Operating a trading style whilst running a limited company is common practice amongst many businesses. You may find that your preferred company name is already on the register. Your business may move in a direction that is different to your registered company name. The use of a trading style is one solution adopted by many companies.
A regular discussion we have with customers forming companies is that their preferred company name is not available as a similar name is already on the register or it contains a word or phrase that Companies House do not permit. We suggest to many company directors/owners that they register a company in an alternative name and adopt a ‘trading style’.
A trading style or trading name is a name a business chooses to use in addition to their official registered name.
Company Formation
- Full company documents
How does this work?
A good example of this in practice is our company. We are known by many of our customers as SFS or Simple Formations. We provide many services including company formation, mailing addresses, legal documents and advisory services. As the company grew so did the number of services we offered. So how do we manage all of these services with only one legal name? We simply adopt different trading styles for each service.
Our actual company name is Small Firms Services Ltd. All of our business services are provided by one company but we sell them on different websites with different logos and trading styles. This is perfectly normal and common practice. As long as you clearly show your company name, number and place of registration on your contacts page or similar then you are fulfilling the Companies Act 2006 requirements.
Important points to consider!
When using a trading style you must always be transparent about the real company identity using the trading style. It should not be used to mislead so all official paperwork and communication should include a simple way for the recipient to identify the underlying registered company.
Using a trading style allows you to operate in multiple business areas without having a separate company for each one. This is considerably more efficient both administratively and from a cost saving point of view. Operating all transactions through one company is much simpler than try to manage several separate companies.
If your trading style is available as a company name for registration at Companies House it is worth considering registering the name as a limited company and keeping this additional company dormant. This will prevent someone else registering the trading name as a limited company and using it themselves. You should not trade through the dormant company unless you are sure you want to run to separate legal entities. A dormant company is registered in the same way as any other limited company but will file dormant accounts each year. You can register the company using our system and we can assist with Dormant Accounts Filing each year.
We provide more information on dormant companies here – dormant company guide