Company Law Reform Bill [HL]

House of Lords

Session 2005 - 06
Internet Publications
Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 3 — Similarity to other names
27


Sections 80 and 81 apply as regards the registration and effect of the change.
(5)
If the company fails to comply with a direction under this section an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
5
(6)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 5 on the standard scale and, for
continued contravention, to a daily default fine not exceeding one-tenth of
level 5 on the standard scale.
(7)
A company that has been directed to change its name under this section may
10
not, without the approval of the Secretary of State, subsequently change its
name so that it does not include “limited” or one of the permitted alternatives.

This does not apply to a change of name on re-registration or on conversion to
a community interest company.
Inappropriate use of indications of company type or legal form
15
66
Inappropriate use of indications of company type or legal form
(1)
The Secretary of State may make provision by regulations prohibiting the use
in a company name of specified words, expressions or other indications —
(a)
that are associated with a particular type of company or form of
organisation, or
20
(b)
that are similar to words, expressions or other indications associated
with a particular type of company or form of organisation.
(2)
The regulations may prohibit the use of words, expressions or other
indications—
(a)
in a specified part, or otherwise than in a specified part, of a company’s
25
name;
(b)
in conjunction with, or otherwise than in conjunction with, such other
words, expressions or indications as may be specified.
(3)
A company must not be registered under the Companies Acts by a name that
consists of or includes anything prohibited by regulations under this section.
30
(4)
In this section “specified” means specified in the regulations.
(5)
Regulations under this section are subject to negative resolution procedure.
Chapter 3
Similarity to other names
Similarity to other name on registrar’s index
35
67
Name not to be the same as another in the index
(1)
A company must not be registered under this Act by a name that is the same as
another name appearing in the registrar’s index of company names.

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 3 — Similarity to other names
28

(2)
The Secretary of State may make provision by regulations supplementing this
section.
(3)
The regulations may make provision—
(a)
as to matters that are to be disregarded, and
(b)
as to words, expressions, signs or symbols that are, or are not, to be
5
regarded as the same,

for the purposes of this section.
(4)
The regulations may provide—
(a)
that registration by a name that would otherwise be prohibited under
this section is permitted—
10
(i)
in specified circumstances, or
(ii)
with specified consent, and
(b)
that if those circumstances obtain or that consent is given at the time a
company is registered by a name, a subsequent change of
circumstances or withdrawal of consent does not affect the registration.
15
(5)
Regulations under this section are subject to negative resolution procedure.
68
Power to direct change of name in case of similarity to existing name
(1)
The Secretary of State may direct a company to change its name if it has been
registered in a name that is the same as or, in the opinion of the Secretary of
State, too like—
20
(a)
a name appearing at the time of the registration in the registrar’s index
of company names, or
(b)
a name that should have appeared in that index at that time.
(2)
The Secretary of State may make provision by regulations supplementing this
section.
25
(3)
The regulations may make provision—
(a)
as to matters that are to be disregarded, and
(b)
as to words, expressions, signs or symbols that are, or are not, to be
regarded as the same,

for the purposes of this section.
30
(4)
The regulations may provide—
(a)
that no direction is to be given under this section in respect of a name—
(i)
in specified circumstances, or
(ii)
if specified consent is given, and
(b)
that a subsequent change of circumstances or withdrawal of consent
35
does not give rise to grounds for a direction under this section.
(5)
Regulations under this section are subject to negative resolution procedure.
69
Direction to change name: supplementary provisions
(1)
The following provisions have effect in relation to a direction under section 68
(power to direct change of name in case of similarity to existing name).
40
(2)
Any such direction—
(a)
must be given within twelve months of the company’s registration by
the name in question, and

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 3 — Similarity to other names
29

(b)
must specify the period within which the company is to change its
name.
(3)
The Secretary of State may by a further direction extend that period.

Any such direction must be given before the end of the period for the time
being specified.
5
(4)
If a company fails to comply with the direction, an offence is committed by—
(a)
the company, and
(b)
every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.
(5)
A person guilty of an offence under this section is liable on summary
10
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
3 on the standard scale.
Similarity to other name in which person has goodwill
70
Objection to company’s registered name
15
(1)
A person (“the applicant”) may object to a company’s registered name on the
ground—
(a)
that it is the same as a name associated with the applicant in which he
has goodwill, or
(b)
that it is sufficiently similar to such a name that its use in the United
20
Kingdom would be likely to mislead by suggesting a connection
between the company and the applicant.
(2)
The objection must be made by application to a company names adjudicator
(see section 71).
(3)
The company concerned shall be the primary respondent to the application.
25

Any of its members or directors may be joined as respondents.
(4)
If the ground specified in subsection (1)(a) or (b) is established, it is for the
respondents to show—
(a)
that the name was registered before the commencement of the activities
on which the applicant relies to show goodwill; or
30
(b)
that the company—
(i)
is operating under the name, or
(ii)
is proposing to do so and has incurred substantial start-up costs
in preparation, or
(iii)
was formerly operating under the name and is now dormant;
35

or
(c)
that the name was registered in the ordinary course of a company
formation business and the company is available for sale to the
applicant on the standard terms of that business; or
(d)
that the name was adopted in good faith; or
40
(e)
that the interests of the applicant are not adversely affected to any
significant extent.

If none of those is shown, the objection shall be upheld.

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 3 — Similarity to other names
30

(5)
If the facts mentioned in subsection (4)(a), (b) or (c) are established, the
objection shall nevertheless be upheld if the applicant shows that the main
purpose of the respondents (or any of them) in registering the name was to
obtain money (or other consideration) from the applicant or prevent him from
registering the name.
5
(6)
If the objection is not upheld under subsection (4) or (5), it shall be dismissed.
(7)
In this section “goodwill” includes reputation of any description.
71
Company names adjudicators
(1)
The Secretary of State shall appoint persons to be company names
adjudicators.
10
(2)
The persons appointed must have such legal or other experience as, in the
Secretary of State’s opinion, makes them suitable for appointment.
(3)
An adjudicator—
(a)
holds office in accordance with the terms of his appointment,
(b)
is eligible for re-appointment when his term of office ends,
15
(c)
may resign at any time by notice in writing given to the Secretary of
State, and
(d)
may be dismissed by the Secretary of State on the ground of incapacity
or misconduct.
(4)
One of the adjudicators shall be appointed Chief Adjudicator.
20

He shall perform such functions as the Secretary of State may assign to him.
(5)
The other adjudicators shall undertake such duties as the Chief Adjudicator
may determine.
(6)
The Secretary of State may—
(a)
appoint staff for the adjudicators;
25
(b)
pay remuneration and expenses to the adjudicators and their staff;
(c)
defray other costs arising in relation to the performance by the
adjudicators of their functions;
(d)
compensate persons for ceasing to be adjudicators.
72
Procedural rules
30
(1)
The Secretary of State may make rules about proceedings before a company
names adjudicator.
(2)
The rules may, in particular, make provision—
(a)
as to how an application is to be made and the form and content of an
application or other documents;
35
(b)
for fees to be charged;
(c)
about the service of documents and the consequences of failure to serve
them;
(d)
as to the form and manner in which evidence is to be given;
(e)
for circumstances in which hearings are required and those in which
40
they are not;
(f)
for cases to be heard by more than one adjudicator;

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 3 — Similarity to other names
31

(g)
setting time limits for anything required to be done in connection with
the proceedings (and allowing for such limits to be extended, even if
they have expired);
(h)
enabling the adjudicator to strike out an application, or any defence, in
whole or in part—
5
(i)
on the ground that it is vexatious, has no reasonable prospect of
success or is otherwise misconceived, or
(ii)
for failure to comply with the requirements of the rules;
(i)
conferring power to order security for costs (in Scotland, caution for
expenses);
10
(j)
as to how far proceedings are to be held in public;
(k)
requiring one party to bear the costs (in Scotland, expenses) of another
and as to the taxing (or settling) the amount of such costs (or expenses).
(3)
The rules may confer on the Chief Adjudicator power to determine any matter
that could be the subject of provision in the rules.
15
(4)
Rules under this section shall be made by statutory instrument which shall be
subject to annulment in pursuance of a resolution of either House of
Parliament.
73
Order requiring name to be changed
(1)
If an application under section 70 is upheld, the adjudicator shall make an
20
order—
(a)
requiring the respondent company to change its name to one that is not
an offending name, and
(b)
requiring all the respondents—
(i)
to take all such steps as are within their power to make, or
25
facilitate the making, of that change, and
(ii)
not to cause or permit any steps to be taken calculated to result
in another company being registered with a name that is an
offending name.
(2)
An “offending name” means a name that, by reason of its similarity to the name
30
associated with the applicant in which he claims goodwill, would be likely—
(a)
to be the subject of a direction under section 68 (power of registrar to
direct change of name), or
(b)
to give rise to a further application under section 70.
(3)
The order must specify a date by which the respondent company’s name is to
35
be changed and may be enforced—
(a)
in England and Wales or Northern Ireland, in the same way as an order
of the High Court;
(b)
in Scotland, in the same way as a decree of the Court of Session.
(4)
If the respondent company’s name is not changed in accordance with the order
40
by the specified date, the adjudicator may determine a new name for the
company.
(5)
If the adjudicator determines a new name for the respondent company he must
give notice of his determination—
(a)
to the applicant,
45
(b)
to the respondents, and

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 4 — Other powers of the Secretary of State
32

(c)
to the registrar.
(6)
For the purposes of this section a company’s name is changed when the change
takes effect in accordance with section 81(1) (on the issue of the new
certification of incorporation).
74
Appeal from adjudicator’s decision
5
(1)
An appeal lies to the court from any decision of a company names adjudicator
to uphold or dismiss an application under section 70.
(2)
Notice of appeal against a decision upholding an application must be given
before the date specified in the adjudicator’s order by which the respondent
company’s name is to be changed.
10
(3)
If notice of appeal is given against a decision upholding an application, the
effect of the adjudicator’s order is suspended.
(4)
If on appeal the court—
(a)
affirms the decision of the adjudicator to uphold the application, or
(b)
reverses the decision of the adjudicator to dismiss the application,
15

the court may (as the case may require) specify the date by which the
adjudicator’s order is to be complied with, remit the matter to the adjudicator
or make any order that the adjudicator might have made.
Chapter 4
Other powers of the Secretary of State
20
75
Provision of misleading information etc
(1)
If it appears to the Secretary of State—
(a)
that misleading information has been given for the purposes of a
company’s registration by a particular name, or
(b)
that an undertaking or assurance has been given for that purpose and
25
has not been fulfilled,

the Secretary of State may direct the company to change its name.
(2)
Any direction under this section—
(a)
must be given within five years of the company’s registration by that
name, and
30
(b)
must specify the period within which the company is to change its
name.
(3)
The Secretary of State may by a further direction extend the period within
which the company is to change its name.

Any such direction must be given before the end of the period for the time
35
being specified.
(4)
A direction under this section must be in writing.
(5)
If a company fails to comply with a direction under this section, an offence is
committed by—
(a)
the company, and
40
(b)
every officer of the company who is in default.

Company Law Reform Bill [HL]
Part 5 — A company’s name
Chapter 5 — Change of name
33


For this purpose a shadow director is treated as an officer of the company.
(6)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
3 on the standard scale.
5
76
Misleading indication of activities
(1)
If in the opinion of the Secretary of State the name by which a company is
registered gives so misleading an indication of the nature of its activities as to
be likely to cause harm to the public, the Secretary of State may direct the
company to change its name.
10
(2)
The direction must be complied with within a period of six weeks from the date
of the direction or such longer period as the Secretary of State may think fit to
allow.

This does not apply if an application is duly made to the court under the
following provisions.
15
(3)
The company may apply to the court to set the direction aside.

The application must be made within the period of three weeks from the date
of the direction.
(4)
The court may set the direction aside or confirm it.

If the direction is confirmed, the court shall specify the period within which the
20
direction is to be complied with.
(5)
If a company fails to comply with a direction under this section, an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
25

For this purpose a shadow director is treated as an officer of the company.
(6)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
3 on the standard scale.
30
Chapter 5
Change of name
77
Change of name
(1)
A company may change its name—
(a)
by special resolution (see section 78), or
35
(b)
by other means provided for by the company’s articles (see section 79).
(2)
The name of a company may also be changed—
(a)
by resolution of the directors acting under section 65 (change of name
to comply with direction of Secretary of State under that section); or
(b)
by order under section 73 (order of adjudicator following objection to
40
company name).