Company Law Reform Bill [HL] (552-555)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (552-555)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 41 — Business names
Chapter 1 — Restricted or prohibited names
552

1160
Withdrawal of Secretary of State’s approval
(1)
This section applies to approval given for the purposes of—
section 1157 (name suggesting connection with government or public
authority), or
section 1158 (other sensitive words or expressions).
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(2)
If it appears to the Secretary of State that there are overriding considerations of
public policy that require such approval to be withdrawn, the approval may be
withdrawn by notice to the person concerned.
(3)
The notice must state the date as from which approval is withdrawn.
Misleading names
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1161
Name containing inappropriate indication of company type or legal form
(1)
The Secretary of State may make provision by regulations prohibiting a person
from carrying on business in the United Kingdom under a name consisting of
or containing specified words, expressions or other indications—
(a)
that are associated with a particular type of company or form of
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organisation, or
(b)
that are similar to words, expressions or other indications associated
with a particular type of company or form of organisation.
(2)
The regulations may prohibit the use of words, expressions or other
indications—
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(a)
in a specified part, or otherwise than in a specified part, of a name;
(b)
in conjunction with, or otherwise than in conjunction with, such other
words, expressions or indications as may be specified.
(3)
In this section “specified” means specified in the regulations.
(4)
Regulations under this section are subject to negative resolution procedure.
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(5)
A person who uses a name in contravention of regulations under this section
commits an offence.
(6)
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.
(7)
A person guilty of an offence under this section is liable on summary
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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.
1162
Name giving misleading indication of activities
(1)
A person must not carry on business in the United Kingdom under a name that
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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.
(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.
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Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 41 — Business names
Chapter 2 — Disclosure required in case of individual or partnership
553

(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
3 on the standard scale.
Supplementary
5
1163
Savings for existing lawful business names
(1)
This section has effect in relation to—
sections 1156 to 1160 (sensitive words or expressions), and
section 1161 (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—
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(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
date was its lawful business name.
(3)
Where—
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(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
business name immediately before the transfer,

those sections do not apply in relation to the carrying on of the business under
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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
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
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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.
Chapter 2
Disclosure required in case of individual or partnership
30
Introductory
1164
Application of this Chapter
(1)
This Chapter applies to an individual or partnership carrying on business in
the United Kingdom under a business name.
(2)
For the purposes of this Chapter a “business name” means a name other than—
35
(a)
in the case of an individual, his surname without any addition other
than a permitted addition;
(b)
in the case of a partnership—
(i)
the surnames of all partners who are individuals, and
(ii)
the corporate names of all partners who are bodies corporate,
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Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 41 — Business names
Chapter 2 — Disclosure required in case of individual or partnership
554


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;
(b)
in the case of a partnership—
(i)
the forenames of individual partners or the initials of those
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forenames, or
(ii)
where two or more individual partners have the same surname,
the addition of “s” at the end of that surname;
(c)
in either case, an addition merely indicating that the business is carried
on in succession to a former owner of the business.
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1165
Information required to be disclosed

The “information required by this Chapter” is—
(a)
in the case of an individual, his name;
(b)
in the case of a partnership, the name of each member of the
partnership;
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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.
Disclosure requirements
1166
Disclosure required: business documents etc
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(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—
(a)
business letters,
(b)
written orders for goods or services to be supplied to the business,
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(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.

This subsection has effect subject to section 1167 (exemption for large
partnerships if certain conditions met).
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(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
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
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a specified form.
(4)
Regulations under this section are subject to negative resolution procedure.
1167
Exemption for large partnerships if certain conditions met
(1)
Section 1166(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
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following conditions are met.
(2)
The conditions are that—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 41 — Business names
Chapter 2 — Disclosure required in case of individual or partnership
555

(a)
the partnership maintains at its principal place of business a list of the
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
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partnership’s principal place of business and that the list of the
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
10
refused, an offence is committed by any member of the partnership concerned
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
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continued contravention, a daily default fine not exceeding one-tenth of level
3 on the standard scale.
1168
Disclosure required: business premises
(1)
A person carrying on business in the United Kingdom under a business name
must, in any premises—
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(a)
where the business is carried on, and
(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.
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(2)
The Secretary of State may by regulations require that such notices be
displayed in a specified form.
(3)
Regulations under this section are subject to negative resolution procedure.
Consequences of failure to make required disclosure
1169
Criminal consequences of failure to make required disclosure
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(1)
A person who without reasonable excuse fails to comply with the requirements
of—
section 1166 (disclosure required: business documents etc), or
section 1168 (disclosure required: business premises),

commits an offence.
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(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
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
40
3 on the standard scale.
(4)
References in this section to the requirements of section 1166 or 1168 include
the requirements of regulations under that section.