Company Law Reform Bill [HL]

The thinking behind the amendment is that a company should change its name as soon as an adjudicator tells it to. It should be relevant whether the company plans to appeal. The concern is that the company will string out proceedings for as long as it can and, while it retains its registered name, will continue to trade under it, damaging the applicant’s goodwill. The concern is unfounded. First, the fact that a company has registered a particular name does not confer a right to trade under it. If somebody is concerned about the name the company is trading under, the remedy is in the law of trademarks and passing off. This applies whether or not a company is trading under its registered name. Secondly, there will be cost consequences if a company appeals unsuccessfully. In any event, the amendment would negate the clause. If a company had to change its name immediately, its name might then be taken by anyone else. In particular, it is likely that the applicant would wish to register the name, if only as a precautionary measure. This means that the company would have lost the name even if the court were to reverse the adjudicator’s decision. A company cannot register a name which is the same as one already on the register. The outcome would be wholly inequitable.