Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2009

My Lords, in moving this Motion, I intend to deal also with the Company, Limited Liability Partnership and Business Names (Public Authorities) Regulations 2009. I should perhaps first explain that both sets of regulations relate to both business names and registered names. By business names, I mean the name under which any person, whether or not incorporated, carries on business in the UK. By registered names, I mean the name under which a company or limited liability partnership is registered at Companies House. This may or may not be the same as its business name or, indeed, its business names. The UK has few restrictions on business names. There are restrictions over the use of certain words under, for example, the Medicines Act 1968 and the Architects Act 1997. Since the abolition of the business names register in 1981, the Secretary of State’s prior approval has been required for certain business names. This requirement does not apply if the business name is simply the trader’s surname or partners’ surnames with or without forename and/or initials or, if the trader is incorporated, if the name is not its registered name. Under the Companies Act 2006, the Secretary of State’s prior approval is needed for either a business name or a registered name that suggests a connection to Her Majesty’s Government, a devolved Administration, a local authority or any public authority specified in regulations. The draft Company, Limited Liability Partnership and Business Names (Public Authorities) Regulations, which we are considering today, specify 26 public authorities where prior approval is required for business names that suggest a connection to them. Both Houses of Parliament are specified in the regulations, as are the devolved legislatures, government auditors and financial regulators. The other six specified public authorities are ones where the relevant government department has advised that there is a risk of harm to the public from persons purporting to be connected with them. Non-departmental public bodies are not listed unless they have functions under the Crown. The reason for specifying a public authority is to prevent the unscrupulous from adopting names that suggest a connection to it in order to trick the public into revealing sensitive information. The 26 listed public authorities are only those where there is seen to be a real risk of a scam—attempts to defraud and so on. Someone wishing to use a name that suggests a connection to one of the specified bodies must ask it to indicate whether and, if so, why it has any objections to the proposed name, although, as is made clear in the regulations, in the case of seven bodies, the applicant must seek the views of another body. The applicant must enclose a copy of any response with the request for prior approval for the name. This ensures that the decision whether to approve the name is well informed. The Secretary of State’s prior approval is also required if a business or registered name includes certain words or expressions. The Committee will be pleased to know that the Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2009 has a list of those words and expressions. There are also six words for which prior approval is required for their inclusion in a registered name but not for inclusion in a business name. I will come back to this later. These regulations, which replaced the Company and Business Names Regulations 1981, were made on 25 September and came into force on 1 October. We are considering them today as they will fall unless approved by Parliament. It has been suggested that a list of words requiring prior approval is no longer necessary and that trade mark law and the law on passing off might somehow be sufficient. However, this civil law protects only the private rights of the person who alleges that their name is being impersonated; trade mark law and the law on passing off do not and cannot protect the public directly. That is the purpose of these regulations. About half the sensitive words and expressions in these regulations were prescribed previously. The newly prescribed words and expressions are primarily those that convey authority or status. The purpose is not to protect a sector, body or person; the purpose is to protect the public. This is because names that include these words might be used to induce members of the public to pass money or personal information. We also prescribe the Welsh and Scots Gaelic versions of words where these are considered to create a similar risk to the public as the word does in the English. The six words prescribed only in relation to registered names are "Cymru", "Alba" and the related adjectives. Both these words are in widespread use in business names, without any evidence of harm to the public. However, we consider that, in future, they should be permitted only in registered names to companies and LLPs that satisfy both a pre-eminence criterion and one based on the location of the registered office. The list does not include words associated with particular commercial activities. For example, it does not include "college". This is because, since 1 October, it has been an offence to carry on business under a name that gives so misleading an indication of the nature of the activities of the businesses as to be likely to cause harm to the public. The words and expressions specified in these regulations are words and expressions that might be used to mislead as to the authority, status or pre-eminence of the business. To conclude, I emphasise that the purpose of both these sets of regulations is to protect the public from harm as a result of being misled as to the authority, status or pre-eminence of a company, LLP or unincorporated business. They do not prohibit any names; rather, they make the prior approval of the Secretary of State a prerequisite. I commend the instruments to the Committee. I beg to move.