According to recently released government statistics, there have been a handful of convictions for breach of the UK trading disclosure regulations. “Trading disclosures” are all the information about your company that you have to disclose to members of the public. Both the company and, potentially, its directors, can be put in the dock for non-compliance.
Although none of the penalties meted out by the courts so far would have broken the bank, which reputable company director wants a criminal record for him or his company? Or to spend 40 hours doing community service for failure to include a simple footer on a business letter?
Complying with this law is easy. If you’re a company director and want to avoid a similar fate, read on.
What’s it all about?
Transparency is the name of the game. Members of the public need to know exactly which legal entity they are dealing with.
A company must display its full registered name including its designation “Limited”/”Ltd” or “plc”:
- at its registered office and any location at which it carries on business;
- on business letters, order forms, cheques, invoices, and all other forms of business correspondence and documents; and
- on its websites.
In addition, a company must disclose
- the part of the UK in which it is registered (e.g. Scotland);
- its registered number; and
- its registered office address
- business letters;
- order forms; and
- Electronic documents. The above requirements extend to electronic business correspondence and documents. So if you send everything by email, remember to include the information in your emails and on the electronic documents. It’s easy to set up an automatically generated footer for emails, and to embed the information on your template documents. If your order forms are online, make sure the information is included.
- Websites. It is incredibly common for companies to forget to include the information on their websites. Goodness knows, there’s enough to think about without it. But only one line is required to comply with the trading disclosure rules – and that doesn’t take up much room at the foot of the homepage.
- Using the business name instead of the registered company name. Many companies are known by their business (or trading) name rather than their “Sunday name” i.e. the name with which they are registered at Companies House. The legal requirement is to disclose your registered company name, even if everyone knows you by your trading name.
- Putting the chief exec’s name on your letterhead. Some companies like to include the name of their most prominent director (perhaps their chairperson or CEO) on their business letterhead. Beware of this: if you include one director’s name, you have to include them all.
- Is your company a charity? If so, there are additional requirements which apply.
Your Brodies contact will be happy to advise you further if you need.
On November 11, 2014