Member Article

Preparing and maintaining statutory company registers can use up valuable resources of the finance department or directors of the company, however if a company is sold it is one of the first documents that the buyers’ solicitors will request.

It can be costly, and time consuming to re-create registers and it can hold up any sale. Every company that is incorporated in the UK is legally required to maintain a number of statutory company registers at either its registered office, a Single Alternative Inspection Location (SAIL address), or at Companies House. These registers may also be collectively referred to as ‘statutory books’, and they must be retained for the entire time that a company is in existence.

As a director or company secretary, the statutory company registers that you have a duty to maintain and keep up to date, as per the Companies Act 2006, as follows:

• Register of Members (s.113)
• Register of Directors (s.162)
• Register of Directors’ Usual Residential Addresses (s.165)
• Register of Secretaries (s.275)
• Register of People with Significant Control (PSC register) (s.790M)
• Register of Charges (only those created before 6 April 2013) (s.876)
  
  

Not all private limited companies will need to keep a Register of Secretaries if no company secretary has ever been appointed. Likewise, there will be no need to keep a Register of Charges if a company does not have any charges to record.

Register of Members

The Register of Members contains information on past and present shareholders (or guarantors, if a company is limited by guarantee), providing a continuous record of ownership since the company’s incorporation. It is the most important statutory register that a company is required to keep. The details that must be recorded in the Register include:

• Names and service addresses of members
• Date on which each person became a member of the company
• Date on which any person ceased being a member of the company
  
  

If the company is limited by shares, the Register must also contain the following details:

• Quantity and class(es) of shares held
• Amount paid or agreed to be paid on each share
• Details of any transfer of shares
• Details of allotments of new shares
• Details of any shares held in treasury
• Details of any other disposals (e.g. shares lost as a result of a buy back)
  
  

Register of Directors

The Register of Directors is a detailed record of every person (past and present) who has been appointed to manage a company on behalf of its members. It must contain the following particulars of each director:

• Full name, including any former name(s)
• Service address
• Country or state (or part of the UK) in which the director usually resides
• Nationality
• Business occupation (if any)
• Date of birth
  
  

Shoosmiths Company Secretarial Department provide a company secretarial service where we hold the company registers electronically and file the confirmation statement for a fixed annual fee.

The following details are required for corporate directors: company name, company number, registered office, place of registration, legal form, governing law, place it is registered (details of the registrar).

Register of Directors’ usual residential addresses

Details of every director’s home address must be recorded in a statutory register; however, due to the private nature of such information, this register should not be made available for public inspection.

Register of Secretaries

Whilst most private companies no longer appoint secretaries, any company that has, or previously had, a secretary must keep a register with the full name (including any former name) and service address of each company secretary.

Register of People with Significant Control (PSC Register)

This is the newest addition to the statutory register’s requirement, having been introduced in April 2016 under The Small Business, Enterprise and Employment Act 2015. The Register of People with Significant Control contains information on every person who has had significant interest or control in a company since 6 April 2016. The details that must be recorded about every PSC include:

• Name
• Service address
• Country or state (or part of the UK) in which the PSC usually resides
• Nationality
• Date of birth
• Usual residential address (not to be disclosed during public inspection)
• Date on which the individual became a registrable person in relation to the company
• Nature of PSC’s control over the company
• Whether restrictions on using or disclosing any of the individual’s PSC particulars are in force
  
  

If an RLE (relevant legal entity), e.g., another company, is being entered into the register, then the following information is required: company name, company number, registered office, jurisdiction incorporated in, governing law, place of registration (details of the registrar), date the company became registrable as a PSC, nature of RLE’s control over the company.

Register of Charges

Since 6 April 2013, the Companies Act 2006 no longer requires a company to maintain a statutory register of charges (i.e., securities, such as mortgages or debentures, over company assets), unless the charges were created prior to 6 April 2013.

The Register of Charges, if one must be kept, should contain the following information:

• Brief description of the nature of the charge
• Amount of the charge
• Date of the charge
• Particulars of persons entitled to the charge
• Copy of any instrument relating to charge
  
  

Any charges created after 6 April 2013 need only be registered at Companies House. If there are any instruments relating to these charges, such as mortgage deeds – copies of the documents must be made available for inspection at the company’s registered office or nominated inspection location. A certified copy of any related instruments must also be included when registering a charge at Companies House.

Other company registers

Many companies keep other registers, such as a Register of Allotments, Register of Transfers, Register of Sealings, and Register of Directors’ Interests. There is no legal obligation to maintain these non-statutory company registers, but it is best practice and the additional information may prove useful.

Why is it important to keep company registers?

Statutory company registers are extremely important because they provide a historical and current record of a company’s ownership and all persons responsible for controlling the business. Any changes to the information kept in a company’s statutory registers must be updated immediately to ensure accuracy on any given day.

Such detailed information is essential and may be required in a number of instances, such as challenging or validating share ownership, completing share transfers, inheriting shares, exercising legal rights, verifying or contesting officer misconduct and/or liability, securing investment, providing evidence of a company’s history in order to finalise the sale of the business, and upon investigation by a liquidator during insolvency proceedings.

Whilst almost all information within the registers is reported on annual Confirmation Statements (previously ‘annual returns’) and disclosed on the central public register at Companies House, the Confirmation Statement simply provides a snapshot of company details on one particular day of the year.

For example, companies do not have to report share transfers until the next Confirmation Statement is due. Therefore, certain details on public record may not always provide an accurate reflection of a company’s current position.

Despite the legal requirement and vital importance of maintaining company registers, the reality is that many directors and company secretaries are completely unaware of this corporate compliance duty, whilst others simply forget to keep the registers accurate and up to date. No matter the reason, failing to keep statutory registers is an offence that can lead to harsh penalties.

Failure to keep statutory company registers

Directors and secretaries (collectively known as ‘company officers’) have a legal duty to ensure their companies meet all statutory obligations imposed by the Companies Act 2006. Maintaining accurate and up to date company registers is one such duty; therefore, failing to adhere to this statutory obligation is an offence.

Both a company and its officers may face penalties if statutory registers are not maintained.

A company that does not have up to date and accurate registers is considered in ‘default’. All current officers of a company that is ‘in default’ are deemed to have committed a summary offence, regardless of which director or secretary was assigned the particular duty of keeping registers. The consequences of being convicted of a summary offence include:

• Level 5 fine (unlimited fine) on the standard scale of fines for summary offences
• Additional daily default fine of up to one-tenth of Level 5
• Damage to the reputation of the company and its officers
  
  

What is a Single Alternative Inspection Location (SAIL) address?

If you realise that you have not been keeping company registers, or you discover that they are inaccurate or not up to date, you must rectify this oversight as soon as possible.
Likewise, if your original company registers have been lost or destroyed, you should seek to reconstitute them immediately. Depending on your company’s history of ownership and control, this may be a relatively straightforward procedure.

How and where to keep your company registers

Most directors choose to keep statutory company registers in a simple loose-leaf binder or single bound book. Alternatively, you can keep your registers in digital format. Provided the registers are legible, accurate, and up to date, the format in which they are maintained is entirely up to you.

The Companies Act 2006 prescribes that all statutory company registers must be stored at a company’s registered office or SAIL address, or on the public register at Companies House.

The option for private companies to elect to maintain the relevant information at Companies House, rather than in their own statutory registers, was introduced on 30 June 2016. Should you choose this alternative, the information will become part of the public register, which can be accessed free of charge online.

Inspection of company registers

If you elect to keep your statutory registers at Companies House, they can be inspected online. However, if you choose to maintain your company registers at your registered office or SAIL address, you must provide access to them every working day from 9am-3pm.

Members of the company may inspect the registers free of charge, and members of the public can request to inspect and make copies of the registers at a specified time for a prescribed fee.

An inspection request must state the following information:

• Name and address of person making the request
• Name of the organisation that they are acting on behalf of
• Intended purpose of the information obtained from the registers
• Whether the information will be disclosed to a third party and, if so, the identity of the third party and how they intend to use the information
  
  

Ordinarily, a company must be given a minimum of 10 working days’ notice of the time and date of inspection. However, if the inspection date request coincides with the notice period of a written members’ resolution or a general meeting, the requisite notice is just 2 days.

Upon receiving an inspection request, a company has 5 working days to respond by either complying with the request (if the inspection is sought for a proper purpose) or applying to the court for relief from the request (if the inspection is for an improper purpose).

 

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