Most of the trading disclosure requirements for UK companies under the Companies Act 2006 (the "2006 Act") came into force last year, on 1 October 2008- but for limited liability partnerships ("LLPs"), overseas companies, partnerships and sole traders, the requirements in the Companies Act 1985, or regulations made under that Act, continued to govern.
On 1 October 2009, two further exemptions to the trading disclosure requirements for UK companies came into force, completing the 2006 Act regime for UK companies, and those provisions in the 2006 Act (or regulations made under the 2006 Act) that set out the trading disclosure requirements for LLPs, overseas companies, partnerships and sole traders also came into force.
There is legislation other than the 2006 Act, such as the Insolvency Act 1986 and various e-commerce regulations, that place additional disclosure requirements on companies and businesses, and those requirements are not included in this overview.
On 1 October 2009, the Regulations were amended (by The Companies (Trading Disclosures ) (Amendment) Regulations 2009), adding two new exemptions.
Two new exemptions came into force on 1 October 2009:
A company's registered name must be displayed at the premises so that it can be easily seen by a visitor at any time and not only during business hours. If a company shares its premises with five or more other companies, the company is only required to display its registered name for a minimum of 15 continuous seconds at least once in every three minutes.
An email must, at a minimum, disclose the company's registered name. But an email might also constitute a "business letter". Companies should consider adding the disclosures required for business letters to the boilerplate language that typically appears automatically at the end of all their emails. In the case of group companies, where staff may send emails on behalf of different group companies from time to time, it may be advisable to include the relevant information for all those companies in the boilerplate (although staff should always make it clear on behalf of which company they are sending a particular email).
The Regulations require the disclosures to be "in characters that can be read with the naked eye" so making the disclosures available via a hyperlink from the email will probably not be enough.
Where a website features a number of group companies, the website should include the required disclosures for all the companies and not just the parent company. The Regulations do not require the disclosures to be made available on each page of a website and it is probably enough for them to be made available on the home page. But if a particular webpage falls within another category of communication (such as an order form) the required disclosures will need to be made on that page.
These regulations apply the trading disclosure regime for UK companies to limited liability partnerships ("LLPs"), with some modifications. For example, where a business letter includes the name of any member of the LLP (other than as a signatory or in the text), the names of all members must be included in the letter. This does not apply to an LLP with more that 20 members provided it maintains a list of all the members at its principal place of business, and the letter states the address of the principal place of business and that such a list is available for inspection there. If an LLP uses the abbreviation "LLP" or "llp" (or the Welsh equivalent) in its name, it must state that it is a limited liability partnership (or the Welsh equivalent) on its business letters, order forms and website.
For overseas LLPs, the trading disclosure regime for overseas companies (see below) applies with some modifications.
The information must be displayed in such a way that it can easily be seen my any visitor to the premises and must be displayed continuously (unless the company shares its premises with five or more other companies, in which case it is only required to display its name for 15 continuous seconds at least once every three minutes).
The disclosure requirements are substantially the same as those under The Business Names Act 1985, which were repealed on 1 October 2009.
An individual carrying on business in the UK under a business name (which is a name other than his own surname) must disclose his own name on all business letters, written orders for goods and services to be supplied to the business, invoices and receipts and written demands for payment of debts.
Likewise, a partnership carrying on business in the UK under a business name (which is a name other than the surnames and corporate names of all partners), must disclose the names of all the partners on these documents. Although the legislation does not expressly provide that these requirements apply whether the documentation is in hard copy or electronic form, it would be prudent to assume it covers both.
The same information must also be displayed in a prominent position at any premises where business is carried on and to which customers of the business or suppliers of goods and services to the business have access.
A partnership with more than 20 partners is exempt from the requirement to include the names of all its partners on its business documentation if a list of all the partners is kept at the partnership's principal place of business, no partner's name appears in the document (except in the text or as a signatory) and the document states the address of its principal place of business and that the list of the partners' names is available for inspection there.
On 1 October 2009, two further exemptions to the trading disclosure requirements for UK companies came into force, completing the 2006 Act regime for UK companies, and those provisions in the 2006 Act (or regulations made under the 2006 Act) that set out the trading disclosure requirements for LLPs, overseas companies, partnerships and sole traders also came into force.
There is legislation other than the 2006 Act, such as the Insolvency Act 1986 and various e-commerce regulations, that place additional disclosure requirements on companies and businesses, and those requirements are not included in this overview.
UK Companies
Most of the trading disclosure regime for UK companies under the CA 2006 came into force on 1 October 2008, with the implementation of The Companies (Trading Disclosures) Regulations 2008 (the "Regulations").On 1 October 2009, the Regulations were amended (by The Companies (Trading Disclosures ) (Amendment) Regulations 2009), adding two new exemptions.
Premises
A company (other than a company which has been dormant since incorporation) must display its registered name at:- its registered office;
- any other location where it keeps records available for inspection (an "inspection place"); and
- any other location from where it "carries on business", unless that location is primarily used for living accommodation.
Two new exemptions came into force on 1 October 2009:
- If the registered office or any inspection place or place of business has been moved to the premises of a liquidator, administrator or administrative receiver who has been appointed in relation to the company, the company is exempt from displaying its registered name at those premises;
- If every individual director of that company has been granted a "section 243 decision", the company is exempt for displaying its name at locations where it carries on business. The company's registered name must still be displayed at any inspection place.
A company's registered name must be displayed at the premises so that it can be easily seen by a visitor at any time and not only during business hours. If a company shares its premises with five or more other companies, the company is only required to display its registered name for a minimum of 15 continuous seconds at least once in every three minutes.
All business correspondence and documentation
A company must disclose its registered name on all its business correspondence and documentation, including business letters, order forms, websites, cheques, invoices and demands for payment, orders for money, goods or services, receipts, promissory notes and bills of exchange, whether these are in hard copy or electronic form.Business letters and order forms
An enhanced level of disclosure is required for business letters and order forms, whether in hard copy or electronic form, with the following disclosures required:- the company's registered name;
- the company's place of registration, registered number and registered address;
- in the case of a limited company exempt from the obligation to use the word "limited" in its name, the fact that it is a limited company;
- in case of the an investment company (within the meaning of section 833 of the 2006 Act), the fact that it is such a company;
- in the case of a community interest company that is not a public company, the fact that it is such a company; and
- if the amount of share capital is stated, the amount stated must be its paid up share capital.
Emails
Business correspondence is often conducted primarily by email.An email must, at a minimum, disclose the company's registered name. But an email might also constitute a "business letter". Companies should consider adding the disclosures required for business letters to the boilerplate language that typically appears automatically at the end of all their emails. In the case of group companies, where staff may send emails on behalf of different group companies from time to time, it may be advisable to include the relevant information for all those companies in the boilerplate (although staff should always make it clear on behalf of which company they are sending a particular email).
The Regulations require the disclosures to be "in characters that can be read with the naked eye" so making the disclosures available via a hyperlink from the email will probably not be enough.
Websites
Websites are subject to the same enhanced disclosure regime as business letters and order forms (see above).Where a website features a number of group companies, the website should include the required disclosures for all the companies and not just the parent company. The Regulations do not require the disclosures to be made available on each page of a website and it is probably enough for them to be made available on the home page. But if a particular webpage falls within another category of communication (such as an order form) the required disclosures will need to be made on that page.
Limited Liability Partnerships
On 1 October 2009, The Limited Liability (Application of Companies Act 2006) Regulations 2009 came into force.These regulations apply the trading disclosure regime for UK companies to limited liability partnerships ("LLPs"), with some modifications. For example, where a business letter includes the name of any member of the LLP (other than as a signatory or in the text), the names of all members must be included in the letter. This does not apply to an LLP with more that 20 members provided it maintains a list of all the members at its principal place of business, and the letter states the address of the principal place of business and that such a list is available for inspection there. If an LLP uses the abbreviation "LLP" or "llp" (or the Welsh equivalent) in its name, it must state that it is a limited liability partnership (or the Welsh equivalent) on its business letters, order forms and website.
For overseas LLPs, the trading disclosure regime for overseas companies (see below) applies with some modifications.
Overseas Companies
On 1 October 2009, The Overseas Companies Regulations 2009 came into force establishing the trading disclosure regime for overseas companies that have a branch or place of business in the UK (a "UK establishment"). This regime is closely aligned with the regime for UK companies.Premises
An overseas company must display its name and country of incorporation at:- any location in the UK where it carries on business; and
- at the service address of every person resident in the UK authorised to accept service on its behalf.
- the location is primarily used for living accommodation;
- if every director or permanent representative of the company has been granted as "section 243 decision" (see above); or
- it is the place of business of a liquidator, administrator or administrative receiver appointed in respect of the business.
The information must be displayed in such a way that it can easily be seen my any visitor to the premises and must be displayed continuously (unless the company shares its premises with five or more other companies, in which case it is only required to display its name for 15 continuous seconds at least once every three minutes).
Communications: General
An overseas company must disclose its name on all its business correspondence and documentation that it uses for carrying on business in the UK, including business letters, order forms, websites, cheques, invoices and demands for payment, orders for money, goods or services, receipts, promissory notes and bills of exchange, whether these are in hard copy or electronic form.Business letters, order forms and websites
There is an enhanced level of disclosure for business letters, order forms and websites, with the following disclosures required:- the name of overseas company;
- where the UK establishment is registered;
- the UK establishment's registered number; and
- the company's country of incorporation;
- the identity of the register (if any) in which the company is registered in its country of incorporation;
- the number with which that company is registered in that registry (if applicable);
- the location of its head office;
- the legal form of the company;
- if the liability of the members of the company is limited, that fact;
- if the company is being wound up, or is subject to other insolvency proceedings or an arrangement or composition or any analogous proceedings, that fact; and
- if the company has share capital, and the amount of share capital is stated, the amount stated must be its paid up share capital.
Partnerships and Sole Traders
On 1 October 2009, Chapter 2 of Part 41 of the 2006 Act came into force, establishing the disclosure regime for individuals and partnerships (including limited partnerships) carrying on business in the UK under a business name.The disclosure requirements are substantially the same as those under The Business Names Act 1985, which were repealed on 1 October 2009.
An individual carrying on business in the UK under a business name (which is a name other than his own surname) must disclose his own name on all business letters, written orders for goods and services to be supplied to the business, invoices and receipts and written demands for payment of debts.
Likewise, a partnership carrying on business in the UK under a business name (which is a name other than the surnames and corporate names of all partners), must disclose the names of all the partners on these documents. Although the legislation does not expressly provide that these requirements apply whether the documentation is in hard copy or electronic form, it would be prudent to assume it covers both.
The same information must also be displayed in a prominent position at any premises where business is carried on and to which customers of the business or suppliers of goods and services to the business have access.
A partnership with more than 20 partners is exempt from the requirement to include the names of all its partners on its business documentation if a list of all the partners is kept at the partnership's principal place of business, no partner's name appears in the document (except in the text or as a signatory) and the document states the address of its principal place of business and that the list of the partners' names is available for inspection there.
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