How to choose a name for your small business

The basics

There are some legal restrictions on what you can call your new business (see below), but that aside - you need to select a name which is sensible, professional, and inoffensive.

Your business name doesn't necessarily have to spell out what the company does, but it can provide an opportunity for you to create a brand for your business from day one.

Quite often, famous business names and brands don't have anything to do with the products or services a company offers - there are thousands of examples, from Amazon (the online store) to Orange (the mobile brand). If you're planning to grow your business over time, perhaps offering new services in the future, you might want to choose a company name which isn't too specific to what you do right now.

For example, instead of 'John Smith Dishwasher Maintenance Services', you could go for 'John Smith Maintenance Services' in case your business expands to other areas.

You can change your business or company name at a later stage, but it's less costly to take time in advance and choose the right name first time.

Make sure it's legal

Whether you are setting up as a sole trader, partnership, or limited company, your choice of name is limited by several rules. In all cases, your proposed name mustn't be offensive, musn't contain any 'sensitive' words, and if you're a sole trader or partnership, you mustn't include limited company-related words such as 'ltd', or 'plc'.

For obvious reasons, you should avoid any trademarked terms in your business name.

For limited companies, you have to have a unique company name, and for sole traders you shouldn't choose a business name you know is being used by another trader (or a limited company). Clearly, as you cannot search a register of sole traders, you should scour the internet and phone directories for mentions of your proposed sole trader name before naming your company.

Also take a look at our guide to the limited company naming rules. You can access a list of 'sensitive' words to avoid on the Companies House site.

Have you got the domain name?

With more and more business owners going online, you would be wise to secure a website domain name for your business. Even if you don't want to set up a web address right away, this will stop anyone else buying your business domain name. Even if you just want to have email for your business, you will need to secure a domain name first if you want a professional email address.

If you are starting a web-based business, you might even want to choose your business name based on available domain names as this would make branding even more uniform. You can secure a domain name for under £10, which is a very small outlay even in 'recessionary' times, and you could soon enjoy the significant benefits of having an online presence.

Read our dedicated guide to choosing a small business domain name.