When selecting a name for your business, careful consideration must be given. According to studies of mergers and acquisitions, trade or brand names account for up to half of the value of the businesses involved.
Consider the newly launched businesses Digital Trends Express, Techno AI, and Quasar!
True, it's just Quasar!
I must admit that I made up these names. As far as I am aware, they are not genuine company names. I am confident, however, that you will concur that they sound quite authentic. (If your company's name is on the list above, I apologize. The coincidence occurred by accident).
Everyone has encountered businesses with similar names. You don't know what kind of business they're in, and you ponder how many potential clients pass them by without realizing that Quasar! is a highly effective digital service provider, or whatever! IBM and Apple are effective as brand identities that tell us nothing about their products and services, but both companies were originally known as International Business Machines and Apple Computer.
There are numerous motives behind the naming of every business. Occasionally, using a high-tech name is an attempt to convey a progressive identity. When this is solely hyperbole, the company's name is of little assistance. The name may even harm the business by fostering mistrust among customers; misled by the new name, customers may lack trust in the business.
Therefore, here are three straightforward recommendations:
Be explicit - Do not make it difficult for potential customers to determine what your business offers. They should be able to determine what you offer solely by reading your name. This may involve including descriptors of your product. If you produce cakes, why not include the word "bake" in your name?
Use descriptors in your name - Adjectives are an excellent way to convey meaning, so use one in your name. Include words such as 'custom' or 'best' in your name if you manufacture bespoke goods. If you are launching a podcast about politics, use a distinguishing adjective in the title, such as "Independent," "Teenage," or "Positive."
Don't be too narrow - Some significant brands have made the error of choosing a name that implies they sell only one product. To emphasize its new beverages and breakfast items, Dunkin' Donuts dropped the 'Donuts' element of its name. Make sure your business's name does not hinder its expansion.
Selecting and Registering a Company Name
When establishing a business, you must give careful consideration to its name. There are severe rules and regulations governing both the form and the use of certain words and phrases in business names, so you cannot simply choose any name you like.
Depending on the business structure you select, you may be required to register your selected business name with a government agency.
How should a business be named?
It is crucial to select the best name for your business because it is frequently the first point of contact between you and your consumers. Some consumers may choose a business based solely on its name, so it is crucial that your business name reflects the quality and 'personality' of your enterprise. However, there are also legal requirements for selecting and registering the name, and you must take care not to violate these regulations.
A successful business name should:
Be simple to recall.
Be exclusive to your business (at least in the region in which you operate).
Reflect the nature of your business.
Be easily discoverable by customers in directories and listings.
Include any pertinent legal information (for example, limited liability companies must include the word 'Limited' at the conclusion of the business name).
Company names should not:
Be intricate.
Be ambiguous.
Use slang or jargon that will soon become obsolete.
Be enigmatic.
Employ illicit or offensive language.
Utilize restricted or prohibited terms (unless express permission has been granted).
It is not a coincidence that many cities and communities have taxi companies named AAA Taxis, AB Cabs, or something similar. These names are ideal because they are simple to remember, convey the precise nature of the service, and appear at the top of directory listings.
Your business name should not:
Incompatible with an existing trademark.
Be insulting.
Constitute a felony (such as the use of restricted terms).
Be currently in use. You should ensure that your proposed business name does not conflict with other local businesses, trademarks, or national organizations.
Which names are prohibited by law?
In addition to prohibiting objectionable words in business names, the local Business Names Act will include a list of restricted words and phrases, either because their use may mislead the public or because their use by unauthorised individuals or organizations may constitute a criminal offense.
The use of restricted terms and phrases (also known as "sensitive names") in a business name requires approval, regardless of whether the business is a sole proprietorship, limited liability company, or partnership. The unauthorized use of restricted words in a name is a criminal offense.
The following restrictions prevent the public from being misled:
The word Limited (which cannot be used unless the business is incorporated and registered).
Words that imply national or international pre-eminence, such as American or British.
Words that imply a business has a particular status, such as Society or Group.
Words implying pre-eminence or authority in a business context (for example, Institute or Board).
Words that imply a particular objective or function, such as Registered or Cooperative.
Words alluding to particular organizations (such as Olympic).
Words implying a charitable organization (such as Red Cross).
Words implying a relationship with the government or a local authority (such as Police, Health, Royal, School, or Council).
Before you can use any of these restricted names, you must obtain sanction from the relevant governing bodies.
Deception of the public or "passing off"
Passing off is the civil law term for deceiving the public, even unintentionally, into believing that one business is another. For instance, selling automobiles under the name Roles Roice could be considered "passing off," and you could be sued in civil court by an injured party.
Remember that registering your business is no guarantee against passing-off allegations.
In addition, if you are a limited liability company, any aggrieved party may object to your use of a name by filing a complaint, and if it is determined that your business name is deceptive or inappropriate, you will be required to forsake it in favor of another. Similarly, if you discover that someone is using a business name similar to yours, you should file an objection as soon as feasible.
Similar complaints against sole proprietors and partnerships are handled by the civil courts, so you should consult with a lawyer.
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