Does your customer know who they are dealing with?

legal updates

Comply with the requirements of the Companies Act 2006

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If you have set your business up as a Limited Company, doubtless you will know that one of the advantages is not being personally liable for financial losses if things go horribly wrong (unless there is an element of fraud).

However, this protection could be lost if you have not made it clear to the consumer that you are a Limited Company. This can happen when a trading name is used but the trader fails to comply with the requirements of the Companies Act 2006 to include the company’s official details on their website and invoices.  

By way of example, one of our dealers was taken to court re an allegedly defective vehicle. The sale had taken place a week before the dealer closed his previous Limited Company and started a new one. The trading name was not changed.  

Our first line of defence was that the consumer bought from the previous Limited Company which was now dissolved and so there was no liability. However, the judge was not convinced as the sales invoice only had the trading name and no details at all of the Limited Company. It should have said that xxx is a trading name of xxx Limited and it should have listed its registered number, its registered address and stated it was registered in England. This information should have been on the website and all stationary.

Without that information, the judge decided liability fell to the trading name and so our dealer had no defence on that argument. Fortunately, we had a second and third line of defence but without those, the dealer would have become liable for the entire claim and so do ensure that if you want the protection of being a Limited Company, you don’t lose it by not making it clear to your customer, exactly with whom they are dealing.

HowdenCompetitive, comprehensive, quick

One of the largest independent specialist motor trade brokers in the UK. Our extensive history of supplying insurance to the motor trade means we understand your business needs. By partnering with a specialist insurance broker like us, you get exactly what you need to protect your business.

Nona BowkisHead of Legal Services / SolicitorRead More by this author

Related Legal Updates

Disclosure: Be transparent with your company details

The requirements are stipulated in the Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015.

Companies Act 2006 – Email Footers

Please note, the definition of business letters has been clarified as being ‘in hard copy, electronic or any other form.”

Please don’t forget the name of your Company

Failure to do so can result in Trading Standards becoming “interested”, which inevitably leads to them endeavouring to find other issues.

Invoice the correct way

If you are a sole trader, the invoice must include your name and any business name.

Trading Standards caught out by Lawgistics

Are you aware of your obligations under the Companies Act?

Displaying your Company name… What are you obligated to do?

A Judge recently allowed a Claimant to pursue proceedings against a Director personally rather than the limited company.

Company Secretaries – check your headed paper!

Company law requires that certain information must appear on company headed paper, other official documents and websites.

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