Company and Business Names (Amendment) (No. 2) Regulations 2007

rose to move, That the Grand Committee do report to the House that it has considered the Company and Business Names (Amendment) (No. 2) Regulations 2007. The noble Lord said: The Government made the Company and Business Names (Amendment) (No. 2) Regulations 2007 on 5 November and they came into force on the following day, and I shall explain in due course why. These regulations add the words ““Government””, ““NHS””, ““HSC””, and ““HPSS”” to the list of terms that require the Secretary of State’s approval before any person with a place of business in Great Britain trades in Great Britain under a name that includes them. The only exception is if the term is part of the surname, forename, or initials of the trader doing business under his own name or one of the partners in a partnership doing business under the partners’ names. The regulations also require the Secretary of State’s approval before a company can be registered in such a name. The Northern Irish Government have a made a similar provision, so these restrictions will apply throughout the United Kingdom. As laid down in the parent legislation, and to ensure continuing effect, the regulations require approval by a resolution of each House within 28 sitting days of their coming into force. Perhaps I may briefly explain some of the controls over all traders’ business names and over companies’ registered names. Business names are those under which anyone trades, whether the trader be a company, an individual or a partnership. There are some restrictions on the choice of business name. These are not many, but they are important for the protection of the public. For example, a trader cannot use a business name ending in ““plc”” unless, of course, it is a public company registered under that name. A similar restriction applies to the use of the word ““limited””. Traders must have the Secretary of State’s approval before they carry on business under certain names. Prior approval is required for names that suggest a connection with Her Majesty’s Government or a local authority and for a name that includes a word or expression specified in regulations. As regards business names, for some terms, the regulations require the applicant to seek the views of a specified body before seeking the Secretary of State’s approval. A company’s registered name is its legal name. It is the name under which a company appears on the index of company names held by the Registrar of Companies. There are more controls on company names than on business names. This is needed to ensure that each company name is unique. It is in addition to the requirement for approval before registration for a company name that suggests a connection with Her Majesty’s Government or a local authority or includes a specified word or expression. This requirement is very similar to that for business names. It is for the same purpose; that is, the protection of the public. In practice, when prior approval is required for either a company’s registered name or business name, the application is considered by the Registrar of Companies on behalf of the Secretary of State. The registrar may take account of the views of others whether or not the regulations require the applicant to seek the views of a specified body with regard to the proposed use of a particular word or expression. The regulations specifying the words and expressions that require prior approval are made under the Business Names Act 1985 and the Companies Act 1985. The specified words include words which imply national or international pre-eminence, such as ““British””, ““international”” and ““European””; words which imply business pre-eminence or representative status, such as ““association””, ““council””, and ““federation””; words and expressions which imply specific objects or functions, such as ““trade union””, ““stock exchange”” , ““register”” and ““trust””; certain other words which could be used in names so as to mislead the public, such as ““police””, ““abortion”” and ““university””; and, since 6 November, the words we are considering, ““Government””, ““NHS””, ““HSC””, and ““HPSS””. The purpose of the regulations is to protect the public. In the case of the word ““Government””, it is to prevent people from being misled into believing a company or business has a connection with a foreign government. Those protected are not just individuals, but also other businesses. There is a real risk of financial damage when a business pretends to an official status. The word ““Government”” has an implicit meaning of authority and responsibility attached to it above and beyond any business or company, which is why we have added it to the list of sensitive words and expressions. As for ““NHS””, the purpose is particularly to protect patients from unscrupulous persons passing themselves off as part of the National Health Service. I fear that there already exist some companies and businesses whose names have clearly been chosen to exploit the trademark ““NHS””. The Department of Health has had discussions with those concerned. The regulations do not apply to either companies incorporated or to persons carrying on business in Northern Ireland, but there is no geographical restriction on companies’ operations. There is a real risk that those unable to exploit ““NHS”” would turn their attention to the Northern Irish equivalent. Healthcare in Northern Ireland is provided by Health and Social Care in Northern Ireland, which until recently was called the Health and Personal Social Services—thus ““HSC”” and ““HPSS””. The use of either ““HSC”” or ““HPSS”” as part of a company or business name could foster dangerous confusion amongst patients, service users and the wider public between genuine NHS, HSC or HPSS services and others seeking to use these terms in their business or company names in an attempt to capitalise on the reputation of the genuine services. Earlier this year, Northern Ireland made a similar provision for ““Government”” and the other words. The regulations do not prohibit the use of these prescribed terms in company or business names, rather it is a requirement for prior approval. In considering whether to give approval, the public interest is paramount. Existing businesses and companies will be affected by these regulations only if they seek to change their name. The regulations are unusual in that they are subject to approval after being made.  That not only enables the Government to act quickly, it prevents an opportunist registering a company in a name that is about to be prohibited. If the regulations are not approved by both Houses within the specified time, they will cease to have effect, which would leave open the possibility of the public being misled. I apologise for taking a bit of time to move this regulation, but it is slightly unusual and, I hope, is of interest to Members of the Committee. I beg to move. Moved, That the Grand Committee do report to the House that it has considered the Company and Business Names (Amendment) (No. 2) Regulations 2007. First Report from the Statutory Instruments Committee.—(Lord Bach.)