Company Statutory Books and Records
Did you know that under the Companies Act 2006, every company in the UK is required to have a set of statutory books and records and to maintain them. But what are they? rradar solicitor Chizoba Chukelu investigates.
Statutory books and records are documents kept by a company which detail important aspects of its operations and structure.
Statutory books and records should include:
a register of members;
a register of directors and company secretaries;
a register of directors' residential addresses;
a register of shareholders and their shareholdings; and
a register of Persons with Significant Control.
It is also prudent to include:
a register of debenture holders, if the company has issued any;
copies of any mortgages or other charges over company assets;
copies of directors' service contracts; and
contracts with shareholders to buy back their shares.
In addition to the statutory books, companies are required to formally document certain board decisions and shareholder decisions affecting the company. This means companies must keep minutes of board meetings and minutes of shareholder general meetings. Board minutes and resolutions must be kept for at least 10 years from the date of the resolution, meeting or decision (as appropriate).
As well as the statutory books and records, a company will need to keep other legally important documents. These include:
the company's certificate of incorporation;
copies of the company's articles of association; and
any other important contracts with employees, customers or suppliers.
A company will usually keep their statutory records and books at its registered office or SAIL (Single Alternative Inspection Location) address. The law requires statutory records to be available for public inspection at the registered office or SAIL address every working day between the hours of 9.00am to 3.00pm.
Failure to keep the register of members updated is an offence under the Companies Act which could result in a fine of £1,000 and a daily penalty of up to £100 for continued breach. It is therefore important that the statutory books are updated as soon as reasonably possible following a change in membership.
It is also very important to have updated statutory records and books should you wish to sell your company in the future. An out-of-date or missing statutory book would need to be reconstituted before the sale can take place. In any event, the buyer would always wish to have some sort of indemnity in place to make good the loss the buyer may suffer as a result of the books not having been properly maintained.
Again, depending on what information is missing from the registers, the company and its directors could face fines of up to £5,000.
rradarstation is a resource available through the AXA MLP where policyholders can access rradar’s legal advisory team over the phone or by email and web portal that provides over 1,000 articles, step by step guidance sheets, forms, sample letters and templates to download relating to running a commercial business.