What are Company Statutory Books?

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Company statutory books, otherwise known as company “registers”, must – by law – be kept by private limited companies in the UK. Statutory books must also be kept up to date and stored at a registered company address for public inspection. The Companies Act 2006 (CA 2006) states that private limited companies have a legal obligation to hold and maintain several registers, which must be securely stored and made available at their registered or SAIL address. In this article we will look at all of the statutory books/registers that must be kept and maintained by UK limited companies, why these must be kept, the option of keeping records on the public record at Companies House and some of the most common statutory book mistakes.

Why are statutory books kept?

Statutory books are used to record important company information, including the names of directors, shareholders, secretaries and persons of significant control. As these are updated over time they provide a contemporaneous record of a company’s constitutional history.

All companies in the UK are required by law to keep and maintain several statutory registers and make these available for inspection on request. Registers can be stored in paper form at a company’s registered office, single alternative inspection location (SAIL) or electronically. Information normally kept in statutory registers can also now be sent electronically to Companies House to be recorded on the public register.

What registers must a UK company keep?

In accordance with the CA 2006 there are several company registers, as follows:

RegisterRelevant CA 2006 sectionsRequirement
A register of directors and secretariesUnder sections 162 and 275Companies must keep a register of directors and secretaries. Private companies are not legally required to have a secretary; hence this applies only if one is appointed. Information typically held includes each officer’s:
  • name and any former names
  • service address
  • nationality
  • date of birth
  • occupation
  • country of residence
Register of directors’ residential addresses Section 165All companies are required to provide a service address and their usual residential address. Residential addresses do not need to be placed on the public record, however. The exception would be if the residential and service addresses were the same.
Copies of all directors’ service contracts or memoranda of termsSection 228Companies must keep a copy of every director’s service contract with the company or with a subsidiary of the company or, if the contract is not in writing, a written memorandum setting out the terms of the contract.
Register of membersSection 114A record must be kept of all individuals with an ownership stake in the company, including:
  • each member’s name and address
  • the quantity of shares held
  • the class of shares held
  • the sum paid for shares, and the
  • date of shareholder registration

Register of chargesSection 877There is no requirement for a company to keep a register of charges created on or after 6 April 2013.
 
Charges created before 6 April 2013 must still be retained.
Register of debenture holdersSection 743There is no legal requirement for a UK company to hold a register of debenture holders but, where one exists, it should be stored appropriately.
Records of resolutions and shareholder meetingsSection 358UK companies are required to keep records of resolutions and shareholder meetings for at least ten years after the date of each resolution
Register of persons with significant control (PSC)Section 790MPart 21A and Schedules 1A and 1B of the CA 2006 require companies to create and maintain a register of Persons with Significant Control (PSC register).

In accordance with the Companies (Company Records) Regulations 2008, the registers and resolutions listed above (not including the register of its directors’ residential addresses) can be stored at a single alternative inspection location (SAIL) rather than the company’s registered office address. The SAIL address must be located in the same part of the UK as the company’s registered office. A SAIL address can be registered with Companies House by completing and submitting form AD02. Where a company elects to keep a register or resolutions at a SAIL address they must complete and submit form AD03 (move your company’s records to the Single Alternative Inspection Location) to Companies House within 14 days.

Option to keep information on the public register at Companies House

As explained above, since 30 June 2016 private companies have had the option to submit information that they would normally keep in certain statutory registers to Companies House to be kept on the public register. This gives companies an alternative method of meeting their legal obligation to retain and maintain statutory registers at a registered office or SAIL address. This applies only to the following:

  • Registers of members.
  • Registers of directors.
  • Registers of directors’ residential addresses.
  • Registers of secretaries.
  • PSC register

It is important to bear in mind that, once information that is normally held in registers has been sent to Companies House, it will be available for all to see. For example, by keeping your member’s information on the public register the details of all members, including their addresses, are visible on the public register.

To submit information on the public register and keep it there, an “election” must be carried out and an agreement reached. This election can be conducted either at the time of company incorporation or at any time thereafter. If it is agreed to use the public register option at the time of incorporation then notice must be given when filing the documents for company registration. If this option is exercised after incorporation, however, then forms EH01-05 must be completed and submitted to Companies House.

Once a company has exercised its option to keep information on the central register, it then has a duty to notify Companies House of any relevant changes. In this case, section 128E(1) of the CA 2006 states that “The company must deliver to the registrar any relevant information that the company would during that period have been obliged under this Act to enter in its register of members, had the election not been in force”. Section 128E(4) clarifies that “the relevant information must be delivered as soon as reasonably practicable after the company becomes aware of it and, in any event, no later than the time by which the company would have been required to enter the information in its register of members”. In other words, the decision to switch to filing certain company information on the Companies House central register does not alter a company’s obligation to make changes in a timely manner.

Importance of keeping statutory books up to date

Not only is it good practice to keep your statutory books as current as possible at all times, but failure to do so may also be a statutory breach (referred to as being “in default”) and constitute an offence both by the company and by each officer (i.e. directors and secretaries). This may result in a large fine being imposed on the company and its officers. This is the case no matter which officer is responsible for maintaining the registers.

Failure to keep up-to-date statutory books can also lead to delays if a company is being sold. For this reason, if you plan to sell your company in the near future then it is important to ensure that your registers, most notably the register of members, is fully up to date and ready for inspection during the due diligence phase. Where books are found to have been lost or incomplete, the process of reconstitution can add considerable time and cost.

Common statutory register mistakes

Even if a company keeps its statutory books up to date mistakes can still occur, any of which may constitute a statutory breach. Minor mistakes in company registers include typographical errors (e.g. spelling mistakes, transposed numbers or incorrectly entered dates). Where a minor mistake has been made then a formal rectification process must be undertaken by the company secretary.

Major alterations to statutory registers may be required, for example if a member is omitted from the register of members without sufficient cause. In this situation an application may need to be made to the court under section 125 of the CA 2006. This section of the act states: “If (a) the name of any person is, without sufficient cause, entered in or omitted from a company’s register of members, or (b) default is made, or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member”.

Final words

Keeping a company’s statutory books up to date and in a state of readiness for scrutiny at any time takes considerable time and effort. By putting in place effective systems, procedures, and resources for the proper management of your statutory books you can be assured of your ongoing compliance with your Companies House registration obligations.

As a UK professional business service provider, Uniwide Formations can help you with all aspects of your limited company or LLP registration and formation. You are most welcome to speak to our company formation specialists to discuss any concerns regarding your company’s reporting and filing requirements with Companies House.

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