New Electronic Company Information Requirements

The government has recently sneaked through changes in the legal requirements placed on companies, their directors, company secretaries, and even liquidators and other insolvency practitioners – all of whom have been given very little time to prepare for the changes. 

 

The obscurely named “The Companies (Registrar, Languages and Trading Disclosures) Regulations 2006” were only laid before Parliament on 21 December 2006 (the penultimate working day before Christmas), but became law on 1 January 2007.  This was despite the government having had over three years to introduce the change into the law, as the new Regulations brought into force a European Union Directive that was passed in 2003[1].

 

So, if any businesspeople, insolvency practitioners or their advisers had spent the Christmas period enjoying their turkey and festivities, happily reflecting on their performance in the previous year, they may be caught out if they stayed reflecting for too long because they could be fined as a result of a new law speedily introduced while they were not watching. 

 

Position before 1 January 2007

 

Company directors and company secretaries should already be aware of the obligations placed on them purely by virtue of them holding that office.  For example, their company must display its full company name legibly on a range of documents, including business letters, notices, official publications, orders, cheques, invoices, receipts and letters of credit[2].

 

The company must also include legibly on all its business letters and order forms details of its place of registration (for example, England), registered company number, address of registered office and certain other information.  An investment company must state that it is such a company, any company exempt from using the word “limited” in its name must state that it is in fact a limited company, and if a company chooses to refer on its letters or order forms to its share capital then this must be to its paid-up share capital.[3]

 

If a company is being wound up, business letters and other documents issued by the company or a liquidator (or receiver or manager) with the company’s name on them must make a statement to the effect that the company is being wound up.[4]

 

Failure to comply with any of these requirements could expose the company itself, and any director or company secretary of the company too, and (in insolvency situations) the insolvency practitioner, to a fine.  The level of the fine would depend on the number of breaches. 

 

There is nothing new about that.

 

Changes since 1 January 2007

 

Amongst some of the changes hidden away in Schedule 1 to the obscurely named new Regulations, though, is a requirement for all the information that must appear on a company’s business letters – such as the full company name, place of registration, registered company number and address of registered office – to be listed on its company Web site.  Likewise, if applicable, the Web site should also state that the company is being wound up.

 

Many – but not all – businesses already must comply with Regulation 6 of the Electronic Commerce (EC Directive) Regulations 2002.  Those Regulations require particular types of business to place certain information about themselves on their Web sites.  Some of the information requirements of the 2002 Regulations overlap with the requirements of the 2006 Regulations, but there are differences.  The information required by the 2002 Regulations was not totally unambiguous and included the business’s name, its geographic address (one possible interpretation of which is a company’s registered – as opposed to its normal business – address), e-mail and other details which make it possible to be contacted quickly, its VAT registration number, details of trade registries (one possible interpretation of which is the company’s registered number and place of registration), and details of any supervisory authorities. 

 

Furthermore, different businesses may be caught by the 2006 Regulations.  Whilst the 2002 Regulations applied to any type of business entity which provided “information society services” (broadly any service normally provided for remuneration at a distance through a computer at the recipient’s individual request), the 2006 Regulations apply to companies which have any form of Web site.

 

As well as the Web site information, the 2006 Regulations clarify that the information requirements apply to any particular document whether it is in electronic or other form – and not just to hard copies.  This had been open to doubt before now.  Therefore, business e-mails are now clearly subject to the same requirements as physical business letters.  In addition to having other information in legal disclaimers which clutter up e-mails and no one seems to read – such as notices about confidentiality, the right to intercept e-mails, stating whether the sender is regulated and disclaimers as to viruses – companies must now definitely include the same company information as appears on physical business letters.  This includes full company name, place of registration, registered number, registered office and so on.  In addition, if the company is being wound up, this should be stated in the e-mail.  If the company is required by regulations or just its own processes to print off its e-mails, then the environment is about to suffer a bit more than before. 

 

© Matthew Arnold & Baldwin 2007

 

Paul Gershlick is an Associate in the Commercial, IP & IT department at Matthew Arnold & Baldwin, working in their London, Milton Keynes and Watford offices. He is editor of the IP/IT/e-commerce legal and market news update site, www.upload-it.com.