Trading Disclosures
On 1st October 2008, Sections 82-85 of the Companies Act 2006 (“2006 Act”) will come into force. These Sections, together with The Companies (Trading Disclosures) Regulations 2008 (“Regulations”) replace the current provisions under the Companies Act 1985 and the Business Names Act 1985.
Currently, every company and limited liability partnership (“LLP”) requires to state its full corporate name legibly at:
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its registered office;
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any premises where it carries on its business
as well as on all:
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business letters;
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order forms;
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notices and other official publications;
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cheques, promissory notes, bills of exchange, endorsements or orders for money or goods;
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invoices, receipts, letters of credit and bills and parcels; and
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websites.
All business letters, order forms and websites must also contain legible details of the following information relating to the Company/LLP:
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place of registration;
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registered number;
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registered office address; and
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if a limited company is not required to use the word "limited" as part of its name, the fact it is a limited company.
For these purposes such documentation includes not only a hard copy (such as a letter) but now also electronic versions such as e-mails (including those sent from mobile devices such as a Blackberry) and faxes.
As well as re-stating the principles above, the new Regulations make various amendments to the current rules including:
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if a company is one of six or more companies at the same registered office, the company name does not have to be displayed continuously but for 15 seconds every three minutes. This allows, for example, a holding company with 5 or more subsidiary companies sharing the same registered address to use an electronic display system for its own and the subsidiary companies’ names;
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the requirement to display the company name will no longer apply to a company which has been dormant since the date of its incorporation;
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the company name will no longer have to be displayed at a company’s place of business where that place of business is primarily used for living accommodation;
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any person with whom the company deals in the course of its business may request in writing information from the company including the address of its registered office, any inspection place (which means any place other than the registered office at which the company keeps company records for inspection under the 2006 Act) and the type of company records kept at that office or place. The company must send a written response to that person within five working days of the receipt of that request.
Any officer of a company who issues or any person on its behalf who authorises the issue of any document of the type mentioned above or the appearance of a website which does not comply with these provisions, is liable to a fine with the exception that, from 1 October 2008, an officer of a company will no longer be able to be held personally liable for any cheque, promissory note, bill of exchange or order for money or goods in breach of the Trading Disclosure rules and regulations.
What action should you take?
You should ensure that all your corporate documentation and websites comply with the Trading Disclosure provisions. The principal checks that are required are that:
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your company's website complies with the new Regulations; and
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all business correspondence and order forms (which also covers those sent electronically, including e-mails and faxes) contain the necessary information. In our experience many emails do not contain this information in their standard disclaimer or footer and this especially applies to e-mails sent from mobile devices such as a Blackberry.
Legal Audit of your Website
Websites are now a vital resource for all businesses, regardless of type of products or services offered. From solicitors to the producers of widgets, websites can provide existing and potential clients with vital information on the business, with the more advanced websites allowing products to be ordered and paid for via the web. However, many businesses establish a website without much consideration of the legal implications.
The Regulations referred to above mean that many websites require to be updated. It also serves as a reminder that it is important for websites to provide for various other matters (which are normally set out in a section marked "Legal Notices"), including:
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Company Information – as above;
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Privacy Policy – this sets out details of compliance with the Data Protection Act 1998 (“DPA”). It is important to bear in mind that if information on an individual is retained for any reason then this may fall within the auspices of DPA;
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Copyright – this makes the reader aware that copyright is claimed over the contents of the website so it cannot be used without permission;
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Legal Disclaimer – this sets out that the accuracy of the information on the website is not warranted and should not be relied upon. Often the standard disclaimer states the provider of the website accepts no responsibility for the accuracy of information or for any loss or damage which may be suffered due to reliance upon it;
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Terms of Use – this sets out the basis upon which any information on the website can be used;
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Cookies – these are small pieces of information stored by the browser on the user's hard drive which make it possible for a website to identify the user if he or she returns to the website. They also assist with navigation around the site. Cookies can be turned off if the user wishes.
Semple Fraser offers an audit of websites for compliance with the above. We can also review your templates, headed notepaper, order forms and other company documentation, or carry out an audit of your website for compliance with this and other legislation (including data protection laws).
For further information please contact: SCOTT KERR
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