Business Names Registration (MR. E. S. Payne)

Part of the debate – in the House of Commons at 12:00 am on 10th April 1970.

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Photo of Gwyneth Dunwoody Gwyneth Dunwoody , Exeter 12:00 am, 10th April 1970

I understand the difficulties that Mr. Payne has faced, and I am sorry that this has come about.

The Registrar of Companies has a duty to refuse to register a company by a name which in the opinion of the Board of Trade is undesirable, and one of the most common reasons for regarding a name proposed for a company as undesirable is that it is too like the name of an existing company. But a name proposed for a company is not regarded as undesirable solely because it is too like, or even identical with, a registered business name. The Registrar of Companies does not search the register of business names before deciding whether to accept a proposed name for a company, and he acted in accordance with established practice when he informed Mr. Payne's solicitor and agents that the name Keytronics Ltd. was available, and when in due course he registered Mr. Payne's company by that name.

My hon. Friend's other contention is that the Registrar of Business Names, when replying to Mr. Payne's inquiry, should have informed him that the name Keytronics was already registered and for that reason was not acceptable as the name of Mr. Payne's business. The Registrar of Business Names has power to refuse to register a name which in his opinion is undesirable. But, unless a name is very well known, he does not regard it as undesirable solely because it is similar to, or identical with, a name already on his register. He does not search his register when considering whether a name is acceptable for registration, and he acted in accordance with established practice when he informed Mr. Payne that the name Keytronics was available.

I will now explain why the practices of the two registrars are those that I have just described. The main concern of each registrar when exercising his power to refuse to register a name is the protection of the public. He is concerned to ensure that the public is not misled in a way which might harm it by names which are falsely indicative of, for example, Royal patronage or a connection with some official body, or of the company's or firm's standing or business.

The Registrar of Companies is also concerned to ensure that the public is not misled by confusing one company with another, and to the extent that he is successful he also incidentally protects a company's vested interest in its name. There is, I appreciate, a case for holding that the registrars should do more and try to ensure that the public is not misled by confusing a company with a trader trading under a business name similar to the name of the company, or by confusing two traders trading under similar business names. But, as most business names are registered by small concerns, the case is not a strong one.

The customers of a small grocer trading under a business name are unlikely to come to harm, even if a company running a chain of shops were to be registered by a similar name, and it is even more unlikely that it would be harmed by the proprietor of another shop being permitted to register a similar business name. However, the conclusive argument for not requiring more of the registrars is a practical one which arises from the very large number of names on the two registers. The Jenkins Committee on Company Law, from which my hon. Friend has quoted today, said in its report: We have been sufficiently impressed by the difficulties facing the Registrar of Companies—with a register of 400,000 companies—in preventing the use of too similar company names to be convinced that it would be impracticable to prevent similarities in the register of 800,000 business names, and still more impracticable in any combined register of over one million company and business names such as some witnesses have proposed. We therefore do not think that the Registrar of Business Names can reasonably be expected to do more than he does at present with regard to similar names. The committee's reference to a combined register shows that it might have added that it did not think the Registrar of Companies could reasonably be expected to do more than he does at present.

I take the point made by my hon. Friend that, with the advance of electronics in general, a great deal of highly expensive equipment might conceivably deal more efficiently with this problem, and I am sure that the Companies Department of the Board of Trade would welcome a vast amount of expenditure being injected into its day-to-day work. Whether this would be justified by practical results is open to a certain amount of discussion.

This problem was looked at by the Jenkins Committee, an independent committee which took a great deal of evidence and examined the existing practices of the Companies Department of the Board of Trade. Although I am quite happy to pass on to my right hon. Friend the President of the Board of Trade the views expressed this afternoon by my hon. Friend, I do not believe that a case of sufficient strength has so far been made to justify any alteration in existing practices.