Companies in the UK are required to create and maintain a collection of registers which are known as the Company’s statutory registers, or the ‘Company/Statutory Books’. Company Books provide evidence of a company’s history and constitution, and should contain accurate, updated and important information about the ownership, administration and corporate governance of any company.
What kind of registers need to be included?
There is a statutory obligation on each UK company to keep and maintain the following registers:
- register of directors;
- register of directors’ usual residential addresses;
- register of secretaries;
- register of the company’s members;
- register of people with significant control over the company; and
- register of charges registered against the company, in respect of charges registered on or before 6 April 2013.
The Company Books may be kept in hard copy or electronic form. They must be kept at the registered office of the company, or at a single alternative inspection address, for instance your accountants or solicitors. Private companies may keep their Company Books on Companies House, electronically.
Why are they required?
It is very important to maintain up to date Company Books. Whilst many companies will regularly update their records at Companies House, which is a legal requirement, updating the Company Books is often omitted. For example, as well as notifying Companies House of the changes to directors, the register of directors should be updated in the Company Books to record relevant changes.
Many companies do not maintain or even have Company Books. However, it is important to note that failing to keep and update the statutory records constitutes an offence, with any defaulting directors, or the company secretary, being liable to receive a fine. There is also a separate statutory duty for the company’s officers to take adequate precautions to prevent any potential falsification of the Company Books.
When will I need them?
Whilst it is important to maintain all of the statutory registers, the register of members is particularly significant as this is the definitive record of who a company’s shareholders are. In order to become a legal registered shareholder of a UK company, details of the shareholder and the number of shares owned must be entered into the company’s register of members. Until this process has taken place, the legal title to the shares has not yet technically been acquired by the shareholder.
Registers within Company Books are required to be inspected as part of any diligence in relation to the sale of or investment in a company. If you are considering selling your company, or looking to secure investment in future, it will be crucial to ensure that your company books are accurate and up to date. Doing so will help to avoid any costly delays in the transaction process, which may be caused by the Company Books requiring to be reconstituted and the negotiation of possible indemnities which may be requested by a potential buyer or investor due to the company’s failure to maintain accurate registers.
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