Companies (Audit, Investigations and Community Enterprise) Act 2004

Companies (Audit, Investigations and Community Enterprise) Act 2004

2004 CHAPTER 27

Commentary on Sections

Part 2: Community Interest Companies

Summary and background

Requirements

Section 33 - Names; and Schedule 6 - Community interest companies: names

218. This section imposes requirements and restrictions on the names CICs are permitted to use.  It also gives effect to Schedule 6.   Schedule 6 amends the Companies Act 1985 (c.6) so as to apply that Act's restrictions on the use of company names and trading names to the use of the name "community interest company" and specified variants.  It:

• amends section 26 of the Companies Act 1985 so that:

  • companies may not be registered with names that include, otherwise than at the end of the name, the expressions "community interest company" or "community interest public limited company", or their abbreviations or Welsh equivalents (paragraph 2(2));

  • in determining whether one name is the same as another (in which case it cannot be registered), the terms "community interest company", "community interest public limited company" and their abbreviations and Welsh equivalents are to be disregarded when they appear at the end of a name (paragraph 2(3));

• amends section 27 of the Companies Act 1985 so as to add alternative statutory designations for CICs (paragraph 3);

• amends section 30 of the Companies Act 1985 to ensure that CICs cannot benefit from the exemptions available under this section (paragraph 4);

• amends section 33 of the Companies Act 1985 so that a private limited CIC must not trade under a name that indicates in English or Welsh that it is a public limited company (paragraph 5);

• inserts into the Companies Act 1985 a new section 34A which

  • makes it an offence for companies to trade under a name which includes at the end of the name, or anywhere else in the name, the expressions "community interest company" or "community interest public limited company" or their abbreviations or their Welsh equivalents, unless they are a CIC; and

  • makes it an offence for anyone other than a company to trade under a name which includes at the end of the name the expressions "community interest company" or "community interest public limited company", or their abbreviations or their Welsh equivalents (paragraph 6).

New section 34A(5) introduces penalties for the improper use in a trading name of the words "community interest company" or "community interest public limited company" or their abbreviations or Welsh equivalents. These restrictions on trading names do not apply to anyone who was trading with such a name at any time during the period from 1 September 2003 up to and including 4 December 2003, the date of publication of the Companies (Audit, Investigations and Community Enterprise) Bill.  Nor do they apply to trade marks which are registered as at 4 December 2003, regardless of whether they have ever been used.

219. The Schedule also:

• amends section 43(2)(b) of the Companies Act 1985. A private limited CIC may re-register as a public limited company and vice versa. In each case its name must still comply with section 33 (paragraph 7);

• amends section 351(1)(d) of the Companies Act 1985. The name of a private limited CIC will not contain the word "limited" in its name. The effect of this amendment is that such a CIC should mention in legible characters in all its business letters and order forms the fact that it is a limited company (paragraph 8); and

• amends paragraph 8(2) of the Schedule to the Limited Liability Partnerships Act 2000. A limited liability partnership may not be registered with the same name as a registered company. For the purposes of determining whether one name is the same as another, there is to be disregarded "community interest company" or "community interest public limited company" or their Welsh equivalents or abbreviations at the end of the name (paragraph 10).