In this comment to an October 2007 post, reader Michael Fleming said the following:
Speaking of things we find in the introductory clause—How about some research and commentary into the British drafting habit (or is it a requirement???) of including the “company number” as part of the name of the corporate party (e.g., “Top Hat, Ltd., a United Kingdom corporation, company number LXQ493821”). I came across it once in a deal, thought it superfluous and struck it—I’m still smarting from the wounds inflicted by the opposing counsel.
In a quick search on EDGAR I found introductory clauses that offer a “company number” or “registration number” for parties not only from England and Commonwealth countries such as South Africa but also from countries as diverse as France, Dubai, Hungary, and Thailand.
Here are some off-the-top-of-my-head thoughts: Evidently in some countries, unlike the individual U.S. states, a registration number is necessary, or at least helpful, if you want to find out the status of a given entity. If that’s the case, including the registration number in the introductory clause could be useful. And doing so wouldn’t take up much space. So I have no particular problem with this usage.
One also sees the “registered office” of a party included in the introductory clause, but I’m less convinced that that’s useful, as a party’s address generally isn’t required to distinguish that party from any other entity with the same name. If the parties to a contract need to know each other’s addresses for purposes of giving notices under the contract, then include the addresses in the notices provision but not in the introductory clause.
I’d appreciate hearing from drafters who use company numbers in the introductory clause. Is this usage a matter of custom, or is it a requirement? Do you think it’s a good idea? If so, why? In your jurisdiction, what’s the proper way to refer to such numbers? And do you refer to the registered office in addition to, or instead of, the company number? If so, why?
In Denmark it is customary to include the company registration number in the intro clause or such other place in a contract where the parties are identified(e.g. definitions) but it is not mandatory. The Danish regfistration number authority is called The Central Business Register (CVR) and the registration number CVR-number. Using the CVR-no. is the briefest way to positively identify a Danish business. All legal persons eligible to pay VAT must register with the Central Business Register and have assigned a a CVR-no.
/mac
I have a somewhat related issue – an introductory clause drafted by a French company. Today’s post helped make sense of “Party, a company organized and existing under the laws of France, having its registered head office at …” “Registered” must connect back to the Registration Number (which itself was not included as part of the name of the legal entity).
However, I am trying to figure out whether to strike “with registered offices at …” regarding the U.S. party. Does the concept translate? Even if it does, I am not currently in possession of definitive knowledge regarding the address of record. I have a main address that I usually use in introductory clauses, but is that the same as the “registered” address?
Thank you for the Yellow Book! (My copy is already full of loose pages from frequent use. I talked my office into buying a copy for every contract analyst.)
Madison: Thank you for reminding me about “registered office” information; I’ve revised the post to refer to it.
You can safely delete any reference to a registered office if the party in question was organized in a U.S. state—U.S. entities don’t have registered offices.
I’m pleased that you’ve found MSCD of use. But rather too many people have mentioned how their copy has fallen apart. That’s something I’ll have to take up with the ABA’s production department!
Ken
As a lawyer practising in England, I don’t believe that this is a requirement – there are no formal requirements for forming a simple contract as such – but instead is a custom which enables those looking at a contract further down the line to accurately identify the contracting parties.
In the UK, a company’s name may change, but if the legal entity has stayed the same it will retain the same Company Number on the register at Companies House – http://www.companieshouse.co.uk/. Via this number you can trace the previous (or current) company name(s).
We use a supplier number in our introductory clause after the supplier name as to reference the specific entity we have loaded into our system. Typically we might have several divisions with the same supplier name, but each is identified by a unique supplier number. Is this appropriate usage for our situation given what you have written about in this blog? If not, then where would it be best placed for reference?
This Agreement between X Company Inc., (“Customer”) with general business offices at ABC address and Y COMPANY (“Supplier”), as Customer’s supplier number 12345…..
Dianna: The supplier number doesn’t serve to identify the other party—there’s no question who the other party is—but instead serves your own administrative purposes. So I suggest that it’s a good candidate for “frontloading,” which is a topic I discussed in this October 2007 post and in this August 2006 post.
By the way, I wouldn’t capitalize the A in “Agreement” (see MSCD 2.8). And I wouldn’t include the address (see MSCD 2.29). I’d put it in the notices provision, if there is one, and maybe I’d frontload it.
Ken
We do a lot of work related to China and I strongly recommend including the company number in all contracts. It will greatly help identify the entity you are dealing with, appears on almost every official certificate or license and will generally even survive in the case the company should change its name.
I agree with Peter. The use of such identifiers makes life much more simple – especially in the Chinese context where translation can be an “iffy” things at times. The identifiers just makes it so much easier for everyone to understand which legal entity you are dealing with.
In British Columbia, the use of a company’s incorporation number is mandatory in Land Title Office documents and I use it in virtually all other contracts as well for the reasons noted by PSLBlogger above. I frequently come across companies that have resulted from amalgamations and kept the name of one of the amalgamating comapnies or where companies in the same corporate group have swapped names. Using the incorporation number minimizes the risk of me or my client being misled when referring to an old document after a name change.
Chris
I generally use the company registration number when drafting for UK or Cayman companies. As has been said earlier, these are unique and unchanging identifiers, whereas the name of the company may change.
To take an interesting scenario, I have twice in the past dealt with two new sister companies where one changed its name, and the second one then changed its name to the previous name of the first. There were various valid legal/branding reasons for this, and the company numbers allow us to know easily which has entered which contract under that name. I can’t really think of any more reliable method.
There is no legal requirement to do this – it is just an evidential issue, and a question of removing any possible uncertainty.
Art, UK
PSLBlogger’s answer is right.
In South Africa a number may differentiate if the company is required to provide annual financial statements to the authorities, whether it is a not-for-profit company or whether its members’ or directors’ liability is limited or not (I have found that this information influences some clauses in the contract). For this purpose I always deem it necessary to include the company number when drafting.
I also insist on this information before I advise my clients to sign on the dotted line.