Chapter 6Companiesofficers of the company may incur personal liability for
any amount due unless it is paid by the company. Thus,
in Hendon v Adelman(1973) a cheque signed on behalf
of L & R Agencies Ltd omitted the ampersand (&) in the
company’s name, which appeared as L R Agencies Ltd.
It was held that the directors who had signed the cheque
had not complied with what is now s 84 and so they were
personally liable on it.
However, according to a more recent decision, it seems
that so long as the outsider knows that he is dealing
with a company and that the liability of its members is
limited, trifling errors in the name will not trigger the
liability. Thus, in Jenice Ltd and others v Dan(1993) the
defendant who was a director of Primekeen Ltd signed a
cheque incorrectly printed by the bank in the name of
‘Primkeen Ltd’. The company went into liquidation and
did not meet the cheque. Nevertheless, Mr Dan was not
liable on it. There was no doubt that outsiders would
have known that they were dealing with a limited com-
pany and no mischief had been done. Some judges have
interpreted the section strictly, as the Hendon case shows,
and regarded it as requiring that every part of the name
be correct. The interpretation used in Jenice seems more
sensible.
Business names
If a company has a place of business in Great Britain
and carries on business here in a name which is not the
corporate name – for example, Boxo Ltd carrying on
business as ‘Paris Fashions’ – then the business name
(Paris Fashions) must not suggest a connection with gov-
ernment or a local authority or contain sensitive words
without the approval of the Secretary of State, and, in
the case of sensitive names, also the approval of the body
listed in the regulations referred to above (CA 2006,
Part 41).
A company which is using a business name has to
state its corporate name in readable form on all business
letters, orders for goods and services, invoices, receipts,
and written demands for payment of business debts,
and must also give an address in Great Britain where the
service of documents will be effective. This is normally
the registered office. Given that an address such as the
address of the registered office is stated, there is no need
to specifically state that that address is the document
serving address (seeDepartment of Trade and Industry
v Cedenio(2001) in Chapter 5 ).
A notice giving the same information must be shown
in a prominent place in any premises where the business
is carried on and to which customers and suppliers have
access. Furthermore, the corporate name and address
for service of documents must be given straight away
and in writing on request to anyone who is doing or
negotiating business with the company.
The criminal sanction consists of default fines on
the company if it does not comply and also on its dir-
ectors and other officers such as a secretary. The civil
sanction is that the company may not be able to enforce
its contracts (CA 2006, s 83). The rules on this are the
same as for partners and sole traders who are operating
under a business name but have not followed the CA
2006.
This civil sanction is now available under s 83 of the
CA 2006 in regard to all company names registered or
business. A company may be formed in the personal
names of the shareholders and directors. Those who
form companies often have to do this because all the
made up names they want, e.g. City Publishing Ltd, are
already on the Index. If this is so, personal names will
be registered even though a company with that name
is already on the Register, provided that the names are
at the time of registration those of directors of the
business.
In some cases where it is intended to use a personal
name, the Registrar may require some addition to it
where it is felt that an own or personal name might cause
public confusion, e.g. Bloggs and Snooks (Furnishings)
Ltd. However, even if an own name has been registered,
this will not necessarily prevent an action at common
law for passing off which, if successful, may lead the
court to award damages and/or an injunction to prevent
the continued use of the name (see Asprey & Garrard
Ltdv WRA (Guns) Ltd(2001) in Chapter 5 ).Abuse of names by Internet users
Persons can select any name for their Internet address,
provided it has not already been registered with
Nominet UK, the body responsible for allocating UK
domain names. A decision of the High Court indicates
that if, by error, the same Internet domain name is alloc-
ated to two or more organisations, the court is pre-
pared to resolve a dispute. The case Pitman Training Ltd
vNominet UK(1997) decided that a genuine registra-
tion of a name to which the organisation applying is
entitled will be protected. The case confirms that the
rule of ‘first come, first served’ applies. In the case Pitman
Publishing registered the name Pitman.co.uk and later
when the publisher tried to use the name it discovered155