Trading disclosure generator

The rule that can lose you a case you should have won

You do the work, you invoice it, they do not pay. You take them to court. And their solicitor looks at your website, notices your company number is not on it, and asks the court to dismiss your claim.

That is section 83 of the Companies Act 2006, and it has nothing whatever to do with whether the money is owed.

Except that the scary version is overstated, and it matters

Half the pages on the internet describing section 83 make it sound automatic. It is not, and the difference is worth understanding rather than being frightened by. Read the section itself and three separate things have to line up before your claim goes anywhere:

• You were in breach at the time the contract was made, not at the time you issued proceedings. Fixing your footer today does nothing about a contract signed last year, and equally, a breach that started after the contract is not caught.
• The defendant shows either that they had a claim arising out of the contract which they were unable to pursue because of your breach, or that they suffered some financial loss in connection with the contract because of it. They have to demonstrate real prejudice, not just point at the omission.
• The court is not satisfied that it would be just and equitable to let the proceedings continue anyway. The discretion sits with the judge, and it survives everything above it.

So it is a risk rather than a certainty. It is also a risk that costs ten minutes to remove entirely, which is the honest reason to bother, and a better reason than the one that gets shouted.

Two lists, and they are not the same size

This is the bit that is genuinely confusing, and getting it straight tells you what to do about documents this page never asked you about.

Your registered name goes on nearly everything. Regulation 24 lists business letters, notices, official publications, bills of exchange, promissory notes, endorsements, order forms, cheques, orders for money or goods, bills of parcels, invoices, other demands for payment, receipts, applications for a licence to trade, your websites, and then finishes with "all other forms of its business correspondence and documentation". That is a catch-all and it is worded as one.

The number, the registered office and where you are registered go on three things.Regulation 25: business letters, order forms and websites. That is the entire list. Not invoices, not receipts, not delivery notes.

Order forms are the item people miss, because an order form does not feel like a letter. It is on the short list all the same.

What about email?

The honest answer is that the regulation does not say, and anybody telling you it definitely does or definitely does not is filling a gap with confidence. Regulation 25 names business letters. Whether an email is a business letter has never been settled in the regulation itself, and the practical consensus has been to treat a real business email as one.

What is not in doubt is regulation 24, which puts your registered name on all business correspondence, and an email is plainly that. So put the full set in your signature and stop thinking about it, which is what almost everybody does anyway and costs nothing.

Sole traders: it turns on one word

Most sole traders assume none of this touches them. Many are wrong, and the test is narrower than people expect.

Part 41 of the Act applies to anybody "carrying on business in the United Kingdom under a business name". A business name is anything beyond your surname plus your forenames or initials. So:

• John Smith or J Smith: not a business name. Nothing applies.
• Smith Plumbing: a business name. It all applies.
• Smith & Sons: a business name, because Sons is not your forename.

Once you are in, section 1202 puts your own name and an address where documents can be served on your business letters, written orders for goods or services, invoices, receipts and written demands for payment. That last item matters most: a written demand for payment is exactly what you send before you sue, and section 1206 gives a sole trader the same problem section 83 gives a company.

The two rules nobody knows

Name one director and you must name them all. Regulation 26: where a business letter includes the name of a director other than in the text or as a signatory, it must disclose the name of every director. Signing a letter is fine. A name printed in the letterhead is what triggers it. Naming three of your four is the breach.

If you state a share capital it must be the paid up figure. Regulation 25(3). The number most people put on a letterhead is the issued or nominal capital off the incorporation paperwork, which is a different number wherever shares are unpaid or partly paid. Nothing requires you to state share capital anywhere, so the easy fix is to delete the line.

And the sign on the door

A company must display its registered name at any location where it carries on business, but not at a location primarily used for living accommodation. Run the business from your kitchen table and there is nothing to put on the front door.

Watch the separate rule, though. The registered name has to be displayed at the registered office and at any inspection place, and there is no living-accommodation exemption in that one. If your registered office is your home you have walked into a different regulation, which is one of the better arguments for using a service address.