220 14: Constitution of a company Part D The formation and constitution of business organisations
5.2 Omission of the word 'limited'
A private company which is a charity or a company limited by shares or guarantee and licensed to do so
before 25 February 1982 may omit the word 'limited' from its name if the following conditions are satisfied.
(a) The objects of the company must be the promotion of either commerce, art, science, education,
religion, charity or any profession (or anything incidental or conducive to such objects).
(b) The memorandum or articles must require that the profits or other income of the company are to
be applied to promoting its objects and no dividends or return of capital may be paid to its
members. Also on liquidation the assets (otherwise distributable to members) are to be
transferred to another body with similar objects. The articles must not then be altered so that the
company's status to omit ‘Limited' is lost.5.3 Change of name
A company may decide to change its name by:
(a) Passing a special resolution
(b) By any other means provided for in the articles (in other words the company can specify its own
procedure for changing its name).
Where a special resolution has been passed, the Registrar should be notified and a copy of the resolution
sent. If the change was made by any other procedure covered by (b), the Registrar should be notified and
a statement provided which states that the change has been made in accordance with the articles.
The change is effective from when a new incorporation certificate is issued, although the company is still
treated as the same legal entity as before. The same limitations as above apply to adoption of a name by
change of name as by incorporation of a new company.5.4 Passing-off action
A person who considers that their rights have been infringed can apply for an injunction to restrain a
company from using a name (even if the name has been duly registered). It can do this if the name
suggests that the latter company is carrying on the business of the complainant or is otherwise connected
with it.
A company can be prevented by an injunction issued by the court in a passing-off action from using its
registered name, if in doing so it causes its goods to be confused with those of the claimant.Ewing v Buttercup Margarine Co Ltd 1917
The facts: The claimant had since 1904 run a chain of 150 shops in Scotland and the north of England
through which he sold margarine and tea. He traded as 'The Buttercup Dairy Co'. The defendant was a
registered company formed in 1916 with the name above. It sold margarine as a wholesaler in the London
area. The defendant contended that there was unlikely to be confusion between the goods sold by the two
concerns.
Decision: An injunction would be granted to restrain the defendants from the use of its name since the
claimant had the established connection under the Buttercup name. He planned to open shops in the south
of England and if the defendants sold margarine retail, there could be confusion between the two
businesses.If, however, the two companies' businesses are different, confusion is unlikely to occur, and hence the
courts will refuse to grant an injunction. The complaint will also not succeed if the claimant lays claim to
the exclusive use of a word which has a general use.