Blog - company name

Responsibilities of Directors of a Limited Company

19 August 2014

You have probably already carried out research on setting up a limited company and have learnt that it takes only one person to set up a limited company. Such a company is called a sole director company. On blog.eformations.co.uk you can appoint yourself as a director and a shareholder and off you go – your company is incorporated.  But, have you wondered what responsibilities are attached with this prestigious title?

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First of all, what are directors?

Directors are essentially people responsible for running the company. They are employees of the company. They work for the benefit of shareholders (members). A director’s prime duty, which he holds together with his fellow directors is to promote the success of the company for the benefit of its members.

The Companies Act 2006 introduced four duties of directors on 1 October 2007 and a further three came into effect on 1 October 2008.These seven duties are:-

  1. To act within the powers (CA2006 s.171) conferred upon them by company law and the company’s Articles of Association.
  1. To promote the success of the company (CA2006 s.172) and in doing so have regard to some matters, for example:

– The likely consequences of any decision in the long term.

– The interests of the company’s employees.

– The need to act fairly between members of the company.

Hence, they must ensure that the company is able to pay its debts and may be held personally liable if it is unable to do so.

  1. To exercise independent judgment (CA2006 s.173).
  1. To exercise reasonable care, skill and diligence (CA2006 s.174).
  1. To avoid conflicts of interest (CA2006 s.175). Directors must avoid situations in which they have or might have a direct or indirect interest that might conflict with the interest of the company.
  1. Not to accept benefits from third parties (CA2006 s.176). They must not use their position to further their own interest.
  1. To declare interests in any proposed transaction or arrangement (CA2006 s.177). 

Directors’ Responsibilities to Companies House

In carrying out their day to day duties directors have responsibilities towards Companies House. They have to prepare and deliver documents, on behalf of the company, to Companies House as and when required by the Companies Act.

  • The annual return.
  • The annual accounts.
  • Notification of any change in the company’s officers or in their personal details.
  • Notification of a change to the company’s registered office.
  • Allotment of shares.
  • Registration of any charges.

The chores of the directors seem onerous but can be considerably lightened by using our service. Call us now on 020 82325479.

How to Choose a Company Name

06 August 2014

Choosing a company name is the first thing you have to think about when forming a limited company. However, it’s often a challenge to come up with a name for your company and there are some pitfalls you’ll want to avoid. That’s why we’ve put together this quick and easy guide on how to choose a company name.

What’s in a name?

There are a couple of pathways to business name creation. If you’re right at the start of coming up with a name for your company, these are the two options you need to consider and choose between in order to come up with a great name.awesome

Option one: Your company name reflects your brand. An example of a company like this is Nike. Perhaps you have a product which has a unique name or you want to incorporate a person’s name – this is a brand business name. It doesn’t tell anyone what your business does (at least until your brand really takes off!) but it’s memorable and reflects the way you want your business to be seen.

Option two: Your company name implies what it is your company does. An example of this is the London Tea Company. A name similar to this has the benefit of instant customer comprehension. You know from the name of the example company that they probably make tea. This company has also added their location which can be a further benefit if you’d like your business to have more appeal to locals. Adding a place name can be a great way to make your business name unique.

Is your name already taken?

Now you’ve come up with a possible company name, it’s time to check its availability. You can do that on our website by clicking here: https://blog.eformations.co.uk/

If your name is available, then congratulations!

Common problems:

My company name is too similar to another registered company name

An example of a company name being too similar could be if you were trying to name your company ‘Just Gift Limited’ and there was another company with the registered name of ‘Just Gifts’, Just Gift UK, Just Gift Holdings, or Just Gift International Limited. There are many other examples of similar names. While 3 years ago the Registrar of companies was allowing the registration of similar names that is no longer the case. Sometimes when people do their own company name availability searches they forget to check for other similar names. They get a surprise when their application gets rejected. The solution to this problem is to try and further differentiate your name or perhaps think of a different name.

My company name has sensitive words

You make an application to register a company name but the application gets rejected because the name has a ‘sensitive word’ in it. Sensitive words are those that require permission from the relevant government body before the Registrar of companies will allow their use. Some examples are, ‘British’, ‘English’, ‘International’, ‘Holdings’, ‘Dentistry’, ‘European’…..and many more.

blog.eformations.co.uk  has a name check service which checks for exact matches, similar names and any other names which are likely to get rejected by the Registrar. A simple phone call to the eformations team can solve your problem.

My name is already registered but I really want to use it

If you’ve found a name that is absolutely perfect but has already been registered, there could be a way around it. People sometimes register any company name, say,  ‘ABC Limited’ and have their chosen name as the ‘trading name’ or sometimes called the ‘business name’. This option can sometimes work, but you have to remember that although business names don’t come under the Companies Act, some of the rules used in the legislation still apply. If the business name is close to a limited company name, the limited company will always win the legal battle.

Our advice

It is best to protect the name of your choice by incorporating it into a limited company and choose a name that best reflects your service or products without infringing on the rights of another name.

blog.eformations.co.uk  has a name check service that checks for exact matches, similar names and any other names which are likely to get rejected by the Registrar.

Have you come across a problem when deciding upon a company name? Share it with us.