Statutory Registers – what are they and does my company need them?
All companies must keep statutory registers says, corporate lawyer, Byron Swarbrick, but most companies don’t have them or definitely don’t keep them up-to-date. In Byron’s experience this is because most companies are not aware of the legal requirements or the importance of keeping company books.
What are they?
It is a legal requirement that a company keeps records of certain information on their directors and shareholders. This information makes up a company’s statutory registers and includes, for example, information on members, applications and allotments of shares, the transfer of shares and directors’ details. Most recently, a company must also keep a register of persons with significant control of the company (so called “PSCs”).
If any of the above details change a company must update their statutory registers to reflect the change and there are statutory time limits to meet in doing so (as well as needing to make the required filings to Companies House).
What if I don’t have them?
HMRC guidance explicitly states: If you do not keep adequate records or you do not keep your records for the required period of time, you may have to pay a penalty”. This can include a fine of up to £5,000.
However, it’s not just the risk of enforcement that makes keeping company books important, explains Byron: having up-to-date statutory registers and meeting your filing requirements to Companies House shows that your company has a professional and efficient approach to business and understands the importance of compliance. If a company can keep its “house” in order then this will be seen to carry over into its commercial operations. This is particularly important when a company is being marketed for sale or being looked at as part of a legal due diligence exercise as part of a business sale or purchase. A serious buyer of shares in a company will want to see “clear title” to the shares they are buying and clear, complete statutory registers will help provide this. If the picture is murky it will put a lot of buyers off.
Problems further down the line can be easily avoided with a little guidance and assistance on basic company administration says Byron. Most business owners, understandably, don’t appreciate what they have to do, as they have been focusing on the commercial side of their business.
Getting your company admin in order is a relatively simple, inexpensive and straightforward task, but can pay dividends in the long run. If you would like to speak to Byron about your company books or would like any advice on company procedure, please contact him on 01482 974513 or firstname.lastname@example.org