10 February 2005

ICSM warns: incorrect stationery removes limited liability protection

Debt recovery agency, Information & Credit search Management Limited (ICSM), warns of dangers inherent in failing to properly set out your company details on all trading documents. Section 349 of the Companies Act 1985 makes it clear that omitting your full company name, registration number and “ltd/plc/llp” from documents such as Purchase Orders means you are committing a criminal offence and liable for a fine. Worse, if the document is issued “on your authority”, then you may become personally liable for any losses incurred. Thus you may find yourself being sued in a personal capacity if your company is unable to pay a supplier. It is worth noting that Companies House takes the view that this extends to all contractual documentation – so it is safest to include the required information on all correspondence including emails and websites. The rationale behind this is to ensure that your supplier understands that he is dealing with a Limited Company and that he is unable to attack your personal assets. Thus your non-compliance in effect removes the limited liability protection. Anne Copley, BPIF Head of Legal, agrees. “Of course it can work both ways. It may also be possible to claim payment from individuals when limited companies have defaulted or failed, if their documentation is not compliant with s. 349. However, you would need to establish that the individual concerned has the ability to pay before spending what could amount to a great deal of money on lawyers.” If you have any queries about the legal requirements relating to company stationery, contact the BPIF Legal Department email [email protected] All BPIF members are automatically registered to the ICSM credit information network. To activate your account please ring the ICSM customer service department on 01454 322234.