Changes to disclosure obligations - websites, e-communications and order forms.

Companies (including LLPs) will be required to disclose certain details on their order forms, websites and electronic communications in a change to the existing law which takes effect on 1 January 2007 and which affect many of your clients.

Present requirements

Currently, companies are required to clearly disclose their name on documents such as business letters, notices, official publications, financial documents such as cheques, promissory notes and bills of exchange and in invoices, receipts and letters of credit.

Companies are also currently required to include the following information on business letters and order forms: place of registration (England and Wales, Wales or Scotland), registered number and registered office address.

Future requirements

Under the proposed changes, companies will also be required to:

*     clearly state their name in order forms and on their websites.

*     state place of registration, registered number and registered office details on their website.

Business letters and order forms will, in future, include documents in both hard copy and electronic form, so if business letters are sent electronically in the form of emails or faxes, those emails and faxes will also need to include this information.

What happens if you don't comply?

The penalty for non-compliance is a fine, which can be levied on any officer of the company or any person who authorised the issue of the non-complying document or website.

What to do now

These changes are proposed as a result of the First Company Law Directive, which has to be implemented into UK law by 31 December 2006. However, with only a few working days to the end of the month the statutory instrument which will make these changes to the Companies Act 1985 has not yet been published, leaving many businesses unaware of these provisions.  The only information available on these proposals is set out in a recent consultation document issued by the DTI.

Our advice to companies and LLPs is to review their documentation now to check that they are complying, and to take steps to make the necessary changes as soon as possible.

There are only 4 checks which need to be made in order to comply with the additional disclosure provisions:

1.    Ensure that the company's website and order forms include the company name registered at Companies House as well as any trading name.  Most sites will already include this.

2.    Check that the company's website includes the place of registration, registered number and registered office details of the company.  Many sites will not include this information, so it may need to be added.

3.    If the company's details have been submitted to websites such as trade directory sites or portals and the information is under the company's control, provide the additional information to those sites.

4.    If the company sends business correspondence electronically (eg by email or fax), check that email templates, fax front sheets and any other electronic templates (including in Blackberrys) include the required information.  This may be achieved by copying the statutory information currently on your company's letterhead into the relevant e-templates.

To find out more about the proposed changes to the Companies Act 1985, visit our website www.companiesact.co.uk