Part D The formation and constitution of business organisations 14: Constitution of a company 2194.4 Shareholder agreements
Shareholders' agreements sometimes supplement a company's constitution.Shareholder agreements are concerned with the running of the company; in particular they often contain
terms by which the shareholders agree how they will vote on various issues.
They offer more protection to the interests of shareholders than do the articles of association. Individuals
have a power of veto over any proposal which is contrary to the terms of the agreement. This enables a
minority shareholder to protect their interests against unfavourable decisions of the majority.5 Company name and registered office
Except in certain circumstances a company's name must end with the words limited (Ltd), public limited
company (plc) or the Welsh equivalents.A company's name is its identity. There are a number of rules which restrict the choice of name that a
company may adopt.5.1 Statutory rules on the choice of company name
No company may use a name which is:- The same as an existing company on the Registrar's index of company names
- A criminal offence, offensive, or 'sensitive'
- Suggest a connection with the government or local authority (unless approved)
The choice of name of a limited company must conform to the following rules.
(a) The name must end with the word(s):
(i) Public limited company (abbreviated plc) if it is a public company
(ii) Limited (or Ltd) if it is a private limited company, unless permitted to omit 'limited' from its
name
(iii) The Welsh equivalents of either (i) or (ii) may be used by a Welsh company
(b) No company may have a name which is the same as any other company appearing in the statutory
index at Companies House. For this purpose two names are treated as 'the same' in spite of minor
or non-essential differences. For instance the word 'the' as the first word in the name is ignored.
'John Smith Limited' is treated the same as 'John Smith' (an unlimited company) or 'John Smith &
Company Ltd'. Where a company has a name which is the same or too similar to another, the
Secretary of State may direct the company to change its name.
(c) No company may have a name the use of which would be a criminal offence or which is
considered offensive or 'sensitive' (as defined by the Secretary of State).
(d) Official approval is required for a name which in the Registrar's opinion suggests a connection
with the government or a local authority or which is subject to control.
A name which suggests some professional expertise such as 'optician' will only be permitted if the
appropriate representative association has been consulted and raises no objection.
The general purpose of the rule is to prevent a company misleading the public as to its real
circumstances or activities. Certain names may be approved by the Secretary of State on written
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