Company formations look set to become just slightly less stressful for many start-up businesses, with the Business Minister Jo Swinson’s announcement that the list of ‘sensitive’ company names is to be reduced.

The present system compels those undertaking company formations to seek prior approval for their company name from Companies House or a specified body, should their desired name include such words as ‘board’, ‘authority’, ‘group’, ‘European’, ‘national’ and/or ‘international’.

However, the measures being implemented to slim down the list will mean less hassle and a quicker process for company formations involving the use of a registered name with a certain ‘sensitive’ word or expression.

Earlier in the year, a consultation on the Company and Business Names regime was launched, attracting 254 responses. Following that consultation, it has now been decided that the list of more than 150 ‘sensitive’ words and expressions will decrease to two thirds of its present size, with effect from next year.

The words that are to be retained are those which can be misused, and subsequently give rise to confusion as to the exact activities of the company or the extent of its legal authority. Examples of such words include ‘bank’, ‘accredited’, ‘chamber of’, ‘institute’, ‘charity’, ‘government’ and ‘university’.

Another word that will not be leaving the list is ‘Sheffield’, given the support for its retention among responses to the consultation. National words like ‘English’, ‘Scottish’, ‘Welsh’, ‘Cymru’ and ‘Northern Irish’ will also be among the remaining restrictive terms applicable to company formations.

Business Minister Jo Swinson commented: “Making life easier for start-up businesses will help to create a stronger economy. Rules on certain types of words shouldn’t be an additional hurdle, so reducing the list of company names needing approval makes sense.

“However, we also need to make sure that businesses can’t pass themselves off as something they’re not. We have struck a balance which reduces the regulations on new businesses, but that also keeps historic and sensitive names rightfully on the list.”

The move is the latest of a government that has made much of the need to reduce ‘red tape’ for businesses, and the latest, slimmed-down list is sure to be welcomed by many of those prospective business owners with an interest in company formations.