Simon Barker and Chris Jolly opened the post one autumn day last year to a nasty shock. They had been served notice by Companies House to change the name of their new Chipping Norton-based firm Weldtech.

Mr Barker said: "They gave us 12 weeks to change the name. We've had to get new leaflets, business cards and a website all sorted out in that time. It's been a real pain."

Now trading as SCWelding, Mr Jolly and Mr Barker had attracted the attention of Companies House because their previous company name was too similar to another firm about 30 miles away, operating in a similar field.

So how can entrepreneurs make sure they don't have problems with their new company name? Fortunately, the problem SCWelding faced should not really happen in the future.

Jessica Bent, head of technology and media at Oxford solicitors Withy King, explained that since October, 2009, Companies House has been given stronger powers.

"Companies House can now refuse a name on the grounds that its use would be a criminal offence, or if it is an offensive name, or if it is just too close to an existing registered company name.

“Before, Companies House took a very limited role, and would only refuse registration of a company if its name was exactly the same as an existing registered company.

Companies House has a web-based system where registered company names can be looked up.

Ms Bent added: "Companies House used to conduct some kind of cursory checks but they are becoming more of a gatekeeper with these enhanced powers now.

"The new regulations are now a real minefield and we would advise people to take proper legal advice before registering a name."

But it is not just at Companies House that company owners should check.

Ms Bent said: "Any business that is setting up or changing its name should definitely consider running a trademark search, because this picks up words that have been registered as trademarks.

“Bear in mind company names and product names can be registered as trademarks.”

These are held at the Government's Intellectual Property Office (IPO), a completely separate body to Companies House.

Does this mean that although there's no legal or administrative barrier to registering a company name that is a registered trademark, the owner of that trademark would come down on any infringer like a ton of bricks?

Ms Bent said: "Absolutely, yes. In relation to company names, Companies House does the policing. But for trademarks there is no proper independent third party that checks company names against trademarks.

“The onus is on the trademark owner to allege trademark infringement against you. Ultimately, you’d go to court, if it got that far, usually businesses settle these sorts of cases. "

A general check, searching on the Internet, is more of a commercial and marketing imperative. It can avoid confusion with established products or companies.

As there are many business directories on the net, you can be reasonably sure any conflicting companies will be picked out, even if they do not have a significant Internet presence themselves.

It is also important to ensure that the company's website name makes sense.

Most Internet hosting services act as domain registrars and will have search facilities on their websites to help find an available name.

Oxford-based Nominet manages the .uk domain and the Internet Corporation for Assigned Names and Numbers (ICANN) co-ordinates globally. However, finding an available domain name does not necessarily mean it is the right one.

German mobile phone tracking company Now Here must have thought they had the perfect domain name. But when it appears at the top of a browser as www.nowhere.com it suggests something very different.

From a legal standpoint the domain name is less important than a company name or a trademark. But web presence is becoming so important that it is likely to be the starting point for new business owners.

Nick Saalfeld, founder of business site Yoodoo.biz agrees.

He said: "Most businesses need some sort of online presence these days. A few hours on a quiet weekend looking for good domain names can be an investment worth its weight in gold.

"By buying a domain, for as little as £20 in your first year, you can really put a market flag in the ground. If your business fails, you’ve lost the equivalent of a couple of rounds of beer.

“If it succeeds, you’ve made a low-cost investment which will form the basis of your new brand from the word go."

Ultimately, company owners need to look at all four areas and take expert advice to avoid falling foul of any one of them.

o Contacts: Companies House www.companieshouse.gov.uk n Intellectual Property Office for trademarks www.ipo.gov.uk n Domain name checking and registration www.nominet.org.uk (UK) www.icann.org (global)