The two words; ‘company’ and ‘business’ are used interchangeably. To most people, a company name and a business name refer to the same information, but in fact there are fundamental differences which we will now consider.
In Ireland, a company name is a complete legal name of an entity. When a company is incorporated, it is a separate legal entity and therefore, is separate and distinct from those who run it.
The registration requirements of a company are set down by the Companies Registration Office (“CRO”). To be approved as an acceptable name, the suggested name must be distinct from other company names and should not be misleading, offensive, or otherwise illegal. Corporate legislation requires that a company name includes appropriate suffixes, such as limited, private limited or public limited. This is to ensure that the entities dealing with the company know its legal status.
Section 114 of Companies Act 1963 states that every company is required to display its name on the outside of every office or place in which its business is carried on. The company name is to be shown on all corporate documents related to the company, such as agreements, resolutions. The company name must be displayed clearly at the entity’s registered office.
Registration of a business name is obligatory if any individual or partnership or any body corporate carries on business under a name other than their own true names. Its purpose is to make public the identities of those being the legal entity behind the business name. This name can be owned by a sole trader, a partnership or a company. Whoever owns the business name is still responsible for the obligations which are taken on under that name. No legal entity is formed and there is no limitation on liability. A business name has no shareholders, directors or secretary and many of the legal responsibilities which apply to companies do not apply to business names.
Business Name Registration
Businesses are required to register their business names under the Registration of Business Act, 1963. The registration requirements of a business name are set down by the CRO. To register a business name, a form is submitted to the CRO. There are different forms for each type of business, be it an individual, a partnership or a body corporate.
Business owners are not afforded business name protection under current legislation. There are no restrictions in terms of duplication or similarity when it comes to business names. An example being; while the company name ‘Molly Malone Limited’ in Ireland is unavailable, there is an abundance of businesses which are currently run under the popular business name ‘Molly Malone’s Bar’.
- The name of the owner of a business must be shown on all business letters, circulars etc. on which the business name appears; and
- If the owner of the business name is a body corporate, the following additional information must be shown on business letters: the full name of the company (note that the only permitted abbreviation is Ltd for Limited, PLC for Public Limited Company, etc.), the registered number and the address of the registered office.
Contrary to popular belief, there are fundamental differences between business names & company names and they provide very different levels of protection. In summary, a company name is selected upon incorporation and creates a separate legal entity, distinct form its owners. Whereas a business name is selected when carrying on a business under a name other than the true owners name, no legal entity is created and there is no limitation on liability.