There have long been provisions in UK Companies legislation requiring UK companies to disclose certain corporate information on their business letters and certain other documents. These go back many years, and covered printed letterheads, order forms, cheques and invoices. They did not specifically cover business cards or compliment slips (unless used to place orders) and made no reference to modern methods of electronic communication, such as emails or websites, as those did not exist when the provisions were originally enacted.
In fact, there has been a separate requirement to state corporate details on websites since 21 August 2002, in the form of the Electronic Commerce (EC Directive) Regulations 2002 (see my previous Article on this website entitled “Legal Regulation of e-Commerce”). This requirement has been widely ignored in practice.
In 2003 a European Directive on Company Law required the extension of corporate disclosure requirements to electronic communications. Member States were required to implement this by 1 January 2007. The necessary provisions were included in the UK Companies Act 2006, which will not come fully into force until October 2009.
In the meantime we have The Companies (Registrar, Languages and Trading Disclosures) Regulations 2006, which came into force (with little fanfare) on 1 January 2007. Amongst other provisions required to implement the European Directive, these extend the existing disclosure requirements for business letters etc., in the Companies Act 1985 to cover documents in electronic form and specifically extend to all a company’s websites.
But leaving the legislative history aside, what is the practical effect for companies?
First, under Section 349 of the Companies Act 1985 as now amended, every UK company must state its name in legible characters in all business letters, order forms, notices and other official publications, cheques, orders for money or goods, invoices, receipts and letters of credit. This applies whether the documents are in hard copy, electronic or any other form. Note the requirement is not specifically to state the Company’s name on all emails, but any email sent on behalf of the Company (rather than one from an employee in his or her personal capacity) will inevitably be an electronic business letter of the Company. Failure to comply is a criminal offence. Moreover, Section 349 is one of the traps for the unwary in the Companies Act where directors and other employees can incur personal liability, as if a cheque or order for money or goods does not mention the Company’s full name in legible characters (and this includes the word “Limited”), then the signatory is personally liable to the creditor if the Company does not honour the debt. Creditors have traditionally used this section to pursue directors of insolvent companies who used cheques or notepaper with only a trading name stated. This will now apply to emails ordering goods or services as well.
Section 351 of the Companies Act 1985 as amended requires certain additional particulars to be stated. Failure to comply with this section is again a criminal offence, for which individual directors, officers and employees can be liable, but there is no personal liability direct to creditors as under Section 349. The particulars required are as follows:
- The Company’s place of registration (e.g. England and Wales, Scotland or Northern Ireland)
- The Company’s registered number
- The address of the registered office (and if there is a different trading address stated, then the registered office must also be stated and identified as such)
- Investment companies must state that they are investment companies
- Certain charitable companies exempt from using the word “Limited” must state that they are limited companies
There is also a requirement that if a company states its share capital, then the reference must be to paid up share capital, but it is rare for a UK company to make such a statement on its letters. Amendments have also been made to the Insolvency Act 1986, so that the requirement that a company in liquidation state that it is being wound up is extended to electronic communications.
The above particulars must be stated on all business letters and order forms (whether in hard copy, electronic or any other form) and on all the Company’s websites. They therefore apply to emails on the same basis as above.
The typical format used on business letters is “ABC Limited, Registered in England and Wales Number 01234567, Registered office 14 & 15 Craven Street, London, WC2N 5AD”. This formulation includes the full company name, in order to comply also with Section 349. An alternative formulation where a trading name is used would be “ABC is a trading name of XYZ Limited, …”.
Standard email signatures should therefore be amended to include this wording. Microsoft Outlook and other email programs can be configured to insert such signatures automatically. Company email policies should be updated to require the use of such signatures, and to prohibit their use on personal emails where staff are permitted to use company facilities to send personal emails. Websites should also be updated to include these particulars, typically on the “About Us” or “Contact Us” pages, assuming these particulars are not already included in order to comply with the 2002 Regulations.
This was a sensible and long overdue change. Companies are rightly required to disclose basic corporate particulars, so that people know whom they are dealing with. In the modern world, communications are increasingly by email and people look at a company’s website to find out more about it. It was therefore anomalous that such particulars should only be required on hard copy letters.