Freelancer’s Question: Does the sole trader structure offer my business’s name any protection? I ask because I’m concerned that somebody else could begin trading under the same name. What, if anything, could I do to prevent this, or is it not important?
Expert’s Answer: It is important to stop anyone else from misrepresenting you if you have built up a brand, as misrepresentation could result in you incurring reputational or financial loss.
In the event that your name is being used by somebody else, you could take action against them under the passing off law. However to do so, you would need to be able to prove that you own the name through a history of trading; that you have a reputation and that you have suffered a loss.
But there are some straightforward ways that you could reduce the likelihood of such action being required, as it could be a costly legal exercise.
Firstly, register a limited company with Companies House, even if you do not intend to operate through it. Registering will stop anyone else from registering a company with the same, or a similar, name.
Secondly, ensure that you own the domain name of your business, bearing in mind that there are a vast array of domain extensions, such as .com, .co.uk and .biz.
Thirdly, and assuming you have a strong brand, consider registering a trademark, which is a sign typically comprising words or a logo. Registering will provide you with extra legal protection, but the trademark must be distinctive from other registered trademarks and cannot be too generic. The cost of registration can be high, however, so carefully consider whether this potential enhancer of your business, reputation and legal rights, is likely to be worth it.
The expert was Jon Dawson, partner at Top 20 chartered accountancy firm Kingston Smith LLP.
Editor's Note: Further Reading -