Business Names and the Consumer Protection Act

In a previous article we pointed creditors to the potential problems with not knowing who you are doing business with. It could be: ·Bob’s Suppliers C.C. (a close corporation) ·Bob’s Suppliers (Pty) Ltd (a private company) ·Bob’s Suppliers Ltd (a public company) ·Bob Naidoo trading as Bob’s Suppliers (a sole proprietor) ·Bob Naidoo and Dan Jones trading as Bob’s Suppliers (partnership) ·Bob Naidoo Investment Trust trading as Bob’s Suppliers (a trading trust) ·If this wasn’t bad enough, another potential is that it is in factXYZ235 Investments CC trading as Bob’s Suppliers. ·Bob’s Suppliers is just the so called trading name of the business. The Consumer Protection Act (CPA) will come into effect on the 31st March 2011. Section 79 and 80 of the CPA will govern the future use of such trading names. These registration requirements will come into effect on a date to be determined by the Minister of Trade and Industry, which must be within a year of the effective date Section 79 provides that a business cannot trade using a name unless: 1.In the case of an individual, the trading name is the person’s full name as it appears in their identity document; or 2.In the case of registered trading entity or so called juristic person used in both the National Credit Act and the CPA (such as a company, partnership or trust)  ; or 3.A name registered with the Registrar (of Companies) in terms of S 80 of the CPA Section 80 of the CPA sets out the registration procedure and Section 81 the criteria for business names. The transfer of business names must also be registered. The effect of not complying with these provisions means that the Consumer Commission can penalise such business by means of a fine or imprisonment if prosecuted. There is also a provision in the schedule to allow a transitional periodif that business registered the name in terms of any public regulation before the 31st March 2011 or if they had been using the business name for at least 1 year before the date on which the date which the Minister will determine for the implementation of the name registration. So while these provisions will tighten up on the abuse and misuse of trading names, credit providers will still have to check what type of entity they are doing business with but may have an additional referencel source to check the validity of such trading names which should be registered with theRegistrar of Companies.

Bentley Credit Control provide solutions in the areas of debt collections, Consumer Protection Act , the National Credit Act, and are specialists in debt recovery within Durban and Cape Town