An email is now a letter

January 1, 2008

Companies legislation has for a long time included a requirement that a company's name and certain other company details must appear in its business letters and other official publications. However, this requirement predates widespread use of email and websites and it has not been clear whether the requirement extended to electronic media as well as traditional print media.

Now, with effect from 1 January 2007, the rules have been changed to introduce amendments to the Companies Act to extend the rules to websites and other electronic documents.

It’s important for directors and officers of companies to be aware of these changes because failure to comply can lead to fines, for which directors and officers can be personally liable. Also, in some circumstances, directors and officers could be personally liable on contracts which were intended to have been made by the company but where the rules were not observed.

Current information requirements for websites

Under the existing UK E-commerce Regulations, which apply to most business websites, certain information must be included on a company’s website.

The name, geographic address and email address of the service provider must be given.   A PO Box number will not meet the requirement for a “geographic” address but a company’s registered office address would.

If the business is a member of a trade or professional association, membership details, including any registration number, should be provided.

If the business has a VAT number, it should be stated even if the website is not being used to transact e-commerce.

The Regulations also require that where the website refers to prices, these shall be indicated clearly and unambiguously and, in particular, shall indicate whether they are inclusive of tax and delivery costs. Under the Distance Selling Regulations there are certain other information requirements for online businesses that sell to consumers (B2C, as opposed to B2B, sales). Please contact us for more information on this.

The requirements have been in effect since 2002. Evidence shows that while many companies include the required information, many do not. However, the risk of sanctions for failure to comply with the E-commerce Regulations is low and there is no provision for fines. This position has now changed with the new amendments to the Companies Act.

Requirement to show full company name

Under the Companies Act, you must show the full name of the company (which includes the word “limited” or “plc” as appropriate) on a range of documents such as business letters, notices, cheques, orders, invoices, receipts and other “official publications”.  This is particularly pertinent if you do business under a trade name as it is easy to overlook the need to show the full company name as well as the trading name (for example, “Perfect Plumbers” is a trade name of The ABC Company Limited).

Under the new rules, this requirement now extends to websites and documents which are in electronic form as well as hard copy form. This means that where companies will need to make sure that the full corporate name is legibly spelt out on their websites and on emails and other official electronic communications.

Failure to comply with the requirement is punishable by fines. Moreover, any officer of the company or any person on its behalf who causes or authorises the appearance of a website or other electronic communication of the company on which the company's name is not mentioned can be personally liable.

Aside from the risk of personal liability for the fines, if an order for goods or services is sent electronically and does not include the company’s full name, then the sender of the email or web form could be personally liable under the new rules. This means that if, for example, the company went into liquidation before having paid the price of the goods or services ordered, then the supplier could claim against the sender personally - a situation that every company employee or representative would wish to avoid.

Other corporate particulars to be shown

There is an additional requirement to show certain other particulars on all business letters and order forms. These particulars are the place of registration of the company, its registration number and the address of its registered office. If the company is exempt from the requirement to use the word “limited” as part of its name, then the fact that it is a limited company must also be stated. The typical format is "The ABC Company Limited, Registered in England and Wales under number 1234567, registered office at 10 High Street, London EC2 3NN".

Again, under the new rules, this requirement now extends to websites and business letters and order forms which are in electronic form as well as hard copy form. And again, failure to comply with the requirement is punishable by fines for which directors and officers can be personally liable.
It is now clear that the requirements in relation to business letters extend to email which is sent as business correspondence. Emails will therefore need to contain this information, for example in the footer. Standard email signatures should, therefore, be amended to include this wording and websites should also be updated to include these particulars, typically on the "About Us" or "Contact Us" pages.

This change in the rules is clearly desirable to level the playing field in relation to the legal requirements in respect of websites and email. The only question is – why it took so long coming?

Related pages:

Online regulation and terms & conditions more

Technology, Media & Digital more

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