A number of provisions of the Companies Act 2006 (the Act) are now in force. As part of the phased implementation of the Act, further provisions will come into effect on 1 October this year. There will then be one final implementation date, on 1 October 2009.
Among the provisions of the Act coming into force this October are:
- new rules relating to trading disclosures, governing the display by a company of its registered name and other corporate details, which extend the existing requirements.
- the introduction of a new regime to deter the opportunistic registration of company names by extending the rights to object to company names.
Trading disclosures: what are the new rules?
The detailed rules are set out in The Companies (Trading Disclosure) Regulations 2008 (SI 2008/495) (the Regulations) which come into force on 1 October.
What are the new rules governing the information to be displayed on a company’s premises?
A company must display its registered name:
- at its registered office.
- at any ‘inspection place’.
- at any other location at which it carries on business.
What is an ‘inspection place’?
This is any location (other than a company’s registered office) at which a company keeps any company records available for inspection as required by the Companies Acts (for example, the location of its register of members).
Are there any exceptions to these rules regarding the display of the company’s registered name?
Yes, there are two exceptions:
- a company that has been dormant at all times since its incorporation need not display its registered name at its registered office or at any inspection place.
- a company need not display its registered name at a business location (other than its registered office or any inspection place) if that location is used principally for living accommodation.
Further exceptions are proposed for October 2009.
What information must a company display on its documents?
The information required will depend on the nature of the document and the rules will apply whether the document is in hard copy, electronic or other form.
Business letters, order forms and websites must contain the following information: the company’s registered name, number and registered address together with the place of registration. Investment companies and private community interest companies must disclose their status as such and companies exempt from using the word ‘limited’ as part of their name must disclose their status as a limited company. Any reference to share capital made by a company must be a reference to paid up share capital.
The company’s registered name must appear on the following: notices and official publications; bills of exchange; promissory notes; endorsements; cheques; orders for money, goods or services; bills of parcels; invoices and other demands for payment; receipts; letters of credit; applications for licences to carry on a trade or activity and all other forms of business correspondence and documentation not already mentioned.
It follows that this information should be included on all business e-mails, even those sent on handheld communications devices.
Do directors’ names have to be disclosed?
This will depend upon the circumstances: if a company’s business letter includes the name of any director (other than in the text or as a signatory), it must include the name of every director of the company.
Is the company required to disclose any other information?
Yes: if a company receives a written request from any person with whom it has a business relationship as to the address of the company’s registered office or any inspection place (and the type of records kept at either location), it must respond in writing within five working days.
Do the Regulations specify the way disclosure is to be made?
Yes: there is a general requirement that any display or disclosure of information required by the Regulations must be visible to the naked eye.
Further, the company’s name must be displayed at company premises so that it can be easily seen by visitors. (There are specific requirements dealing with the situation where a company’s name is displayed by electronic means).
Are there any other rules relating to trading disclosures?
Yes: rules contained in The Companies (Registrar, Languages and Trading Disclosures) Regulations 2006 (SI 2006/3429) continue to apply to the trading disclosures to be made when a company is being wound up.
Objections to company names: what is the new regime?
A complainant who has goodwill in a name may object to the registration of a company name which is the same or similar by another person for purposes which are not considered legitimate: for example, if the main purpose of the person registering the company name was to obtain money from the complainant or to prevent the complainant from registering the name.
What will happen following a successful complaint?
The adjudicator may direct the company to change its name to one that does not raise objection and set a deadline for such change. If the name is not changed in accordance with the deadline, the adjudicator may determine a new name for the company. The decision of the adjudicator has to be made public and is open to appeal. On appeal, the court can determine a new name for the company.