Company Law Reform Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 1 — Restricted or prohibited names
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827
Name giving misleading indication of activities
(1)
A person must not carry on business in the United Kingdom under a name that
gives so misleading an indication of the nature of the activities of the business
as to be likely to cause harm to the public.
(2)
A person who uses a name in contravention of this section commits an offence.
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(3)
Where an offence under this section is committed by a body corporate, an
offence is also committed by every officer of the body who is in default.
(4)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
10
3 on the standard scale.
Supplementary
828
Savings for existing lawful business names
(1)
This section has effect in relation to—
sections 821 to 825 (sensitive words or expressions), and
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section 826 (inappropriate indication of company type or legal form).
(2)
Those sections do not apply to the carrying on of a business by a person who—
(a)
carried on the business immediately before the date on which this
Chapter came into force, and
(b)
continues to carry it on under the name that immediately before that
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date was its lawful business name.
(3)
Where—
(a)
a business is transferred to a person on or after the date on which this
Chapter came into force, and
(b)
that person carries on the business under the name that was its lawful
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business name immediately before the transfer,

those sections do not apply in relation to the carrying on of the business under
that name during the period of twelve months beginning with the date of the
transfer.
(4)
In this section “lawful business name”, in relation to a business, means a name
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under which the business was carried on without contravening—
(a)
section 2(1) of the Business Names Act 1985 (c. 7) or Article 4(1) of the
Business Names (Northern Ireland) Order 1986 (S.I. 1986/1033 N.I. 7)),
or
(b)
after this Chapter has come into force, the provisions of this Chapter.
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Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 2 — Disclosure required in case of individual or partnership
401

Chapter 2
Disclosure required in case of individual or partnership
Introductory
829
Application of this Chapter
(1)
This Chapter applies to an individual or partnership carrying on business in
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the United Kingdom under a business name.
(2)
For the purposes of this Chapter a “business name” means a name other than—
(a)
in the case of an individual, his surname without any addition other
than a permitted addition;
(b)
in the case of a partnership—
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(i)
the surnames of all partners who are individuals, and
(ii)
the corporate names of all partners who are bodies corporate,

without any addition other than a permitted addition.
(3)
The following are the permitted additions—
(a)
in the case of an individual, his forename or initial;
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(b)
in the case of a partnership—
(i)
the forenames of individual partners or the initials of those
forenames, or
(ii)
where two or more individual partners have the same surname,
the addition of “s” at the end of that surname;
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(c)
in either case, an addition merely indicating that the business is carried
on in succession to a former owner of the business.
830
Information required to be disclosed

The “information required by this Chapter” is—
(a)
in the case of an individual, his name;
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(b)
in the case of a partnership, the name of each member of the
partnership;

and in relation to each person so named, an address in the United Kingdom at
which service of any document relating in any way to the business will be
effective.
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Disclosure requirements
831
Disclosure required: business documents etc
(1)
A person carrying on business in the United Kingdom under a business name
must state the information required by this Chapter, in legible characters, on
all—
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(a)
business letters,
(b)
written orders for goods or services to be supplied to the business,
(c)
invoices and receipts issued in the course of the business, and
(d)
written demands for payment of debts arising in the course of the
business.
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Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 2 — Disclosure required in case of individual or partnership
402


This subsection has effect subject to section 832 (exemption for large
partnerships if certain conditions met).
(2)
A person carrying on business in the United Kingdom under a business name
must secure that the information required by this Chapter is immediately
given, by written notice, to any person with whom anything is done or
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discussed in the course of the business and who asks for that information.
(3)
The Secretary of State may by regulations require that such notices be given in
a specified form.
(4)
Regulations under this section are subject to negative resolution procedure.
832
Exemption for large partnerships if certain conditions met
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(1)
Section 831(1) (disclosure required in business documents) does not apply in
relation to a document issued by a partnership of more than 20 persons if the
following conditions are met.
(2)
The conditions are that—
(a)
the partnership maintains at its principal place of business a list of the
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names of all the partners,
(b)
no partner’s name appears in the document, except in the text or as a
signatory, and
(c)
the document states in legible characters the address of the
partnership’s principal place of business and that the list of the
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partners’ names is open to inspection there.
(3)
Where a partnership maintains a list of the partners’ names for the purposes of
this section, any person may inspect the list during office hours.
(4)
Where an inspection required by a person in accordance with this section is
refused, an offence is committed by any member of the partnership concerned
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who without reasonable excuse refused the inspection or permitted it to be
refused.
(5)
A person guilty of an offence under subsection (4) is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
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3 on the standard scale.
833
Disclosure required: business premises
(1)
A person carrying on business in the United Kingdom under a business name
must, in any premises—
(a)
where the business is carried on, and
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(b)
to which customers of the business or suppliers of goods or services to
the business have access,

display in a prominent position, so that it may easily be read by such customers
or suppliers, a notice containing the information required by this Chapter.
(2)
The Secretary of State may by regulations require that such notices be
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displayed in a specified form.
(3)
Regulations under this section are subject to negative resolution procedure.

Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 3 — Supplementary
403

Consequences of failure to make required disclosure
834
Criminal consequences of failure to make required disclosure
(1)
A person who without reasonable excuse fails to comply with the requirements
of—
section 831 (disclosure required: business documents etc), or
5
section 833 (disclosure required: business premises),

commits an offence.
(2)
Where an offence under this section is committed by a body corporate, an
offence is also committed by every officer of the body who is in default.
(3)
A person guilty of an offence under this section is liable on summary
10
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
3 on the standard scale.
(4)
References in this section to the requirements of section 831 or 833 include the
requirements of regulations under that section.
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835
Civil consequences of failure to make required disclosure
(1)
This section applies to any legal proceedings brought by a person to whom this
Chapter applies to enforce a right arising out of a contract made in the course
of a business in respect of which he was, at the time the contract was made, in
breach of section 831(1) or (2) (disclosure in business documents etc) or section
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833(1) (disclosure at business premises).
(2)
The proceedings shall be dismissed if the defendant (in Scotland, the defender)
to the proceedings shows—
(a)
that he has a claim against the claimant (pursuer) arising out of the
contract that he has been unable to pursue by reason of the latter’s
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breach of the requirements of this Chapter, or
(b)
that he has suffered some financial loss in connection with the contract
by reason of the claimant’s (pursuer’s) breach of those requirements,

unless the court before which the proceedings are brought is satisfied that it is
just and equitable to permit the proceedings to continue.
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(3)
References in this section to the requirements of this Chapter include the
requirements of regulations under this Chapter.
(4)
This section does not affect the right of any person to enforce such rights as he
may have against another person in any proceedings brought by that person.
Chapter 3
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Supplementary
836
Application of general provisions about offences

The provisions of sections 778 to 784 (general provisions about offences) apply
in relation to offences under this Part as in relation to offences under the
Companies Acts.
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