Keenan and Riches’BUSINESS LAW

Passing off at common law

As far as the common law is concerned, partners, say A
and B, can trade in any name that suits them so long as
the name does not suggest that their business is the same
as that of a competitor. It must not deceive or confuse
the customers of some other person or persons, say, C
and D.
If it does, the court will, if asked, give an injunction
and/or damages against A and B to protect the business
of C and D.
However, people can carry on business in their own
names, even if there is some confusion with another
person’s business, unless it is, for example, part of a
scheme deliberately to deceive the public as the follow-
ing case shows.

Part 2Business organisations

118

Croftv Day(1843)

A firm called Day & Martin were well-known makers of

boot polish. The original Mr Day and Mr Martin had been

dead for some time but Mr Croft had bought the busi-

ness and carried it on in the ‘Day & Martin’ name. A real

Mr Day and a real Mr Martin went into the manufacture

of boot polish and adopted the Day & Martin name for

the fraudulent purpose of representing to the public that

they were the old and widely known firm of that name.

Mr Croft went to court and was given an injunction to

stop the real Mr Day and the real Mr Martin from trading

in their own names in the circumstances of this case.

However, it must be borne in mind that, despite the fact
that the law will allow a firm to trade in the names of the
partners, this law is exceptional and a passing-off action
against an ‘own-name’ firm may well succeed where there
is likely to be public confusion affecting the goodwill
of the existing firm. It is not necessary for the claimants
to prove a deliberate scheme of deceit (see Asprey &
Garrard Ltdv WRA (Guns) Ltd(2001) on p 99 ).

Business names and company legislation

Under the Companies Act 2006 the names of all the
members of a partnership and their addresses in Great
Britain where documents can be served must be stated
in a notice which must be prominently displayed so that
it can be easily read at all the firm’s business premises.
The names must also be stated in readable form on all
business letters and documents. However, this require-
ment is relaxed in the case of a firm which has more than

20 partners. If there are more than 20 partners, the firm

may choose not to list the names of the partners on the

relevant documents but have instead a statement on the

business letters and documents of the firm’s principal

place of business with an indication that a list of part-

ners’ names can be obtained and inspected there. If this

choice is made, no partner’s name shall appear on the

relevant documents except in the text of a letter or by way

of signature. The Act also requires every partnership to

provide to anyone with whom it is doing or discussing

business a note of the partners’ names and addresses on

such information being asked for by that person.

In some cases official approval is required for the use

of certain partnership names. For example, the use of

the word ‘Royal’ in a firm’s name requires the approval

of the Home Office.

Under the Companies Act 2006 the use of the de-

scriptions ‘Company’ or ‘and Company’ are allowed for

partnerships even though they suggest that they are com-

panies. However, the Companies Act 2006 makes it an

offence to use a firm name which ends with the expres-

sion ‘Public Limited Company’ or ‘plc’ or ‘Limited’ or

‘Ltd’ for associations such as partnerships, whether

unlimited partnerships, limited partnerships or LLPs.

Failure to comply with this rule results in liability to a

fine for every day it goes on.

The relationship between partners

and outsiders

The power of a partner, including a salaried partner, to

make himself and his other partners liable for transac-

tions which he enters into on behalf of the firm(not on

his own behalf ) is based on the law of agency. Each part-

ner is the agent of his co-partners.

Section 5 of the Partnership Act 1890 makes this clear.

It says that every partner is the agent of the firm and of

his co-partners for the purpose of the business of the

partnership.

Partners’ powers

A partner’s authority to enter into transactions on

behalf of the firm and his co-partners may be set out

under the following headings.