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Company Law Reform Bill [HL]

This is a new section, with no direct equivalent in the Companies Act 1985. It restricts the use of a name that misleads the public about the activities of the business as to be likely to cause them harm. In order to bring this section into line with decided case law, it is argued that the section should draw no distinction between the nature of the activities of the business and the activities themselves. It was decided in Exxon Corporation v. Exxon Insurance Consultants International Ltd in 1982 that companies may not use a name so similar to the name used by an existing business as to be likely to mislead the public into confusing the two concerns. This section may be understood as providing a statutory basis to that rule. The idea that the confusion created by the name might be likely to cause the public harm is implicit in the Exxon case. The likelihood to cause the public harm is nonetheless a legitimate concern. However, the distinction between, "““the nature of the activities of the business””" and the activities of the business itself is a distinction that lawyers will exploit to render the common law rule in this section of the Bill useless. For the sake of certainty, the distinction should be removed by striking out the words indicated in the amendment. I beg to move.