Being a director and/or secretary of a company can be extremely hard work. It is not surprising therefore that the seemingly annoying task of making sure that the statutory books of a company are up to date can sometimes fall by the wayside or be ignored altogether.
Nonetheless, up-to-date statutory books are a legal requirement (and please don’t fall into the trap of thinking that if a company doesn’t a have a company secretary, it doesn’t need to undertake these “company secretarial” tasks!). According to the law, the following statutory registers and records must be kept:
- Minutes of directors’ meetings;
- Copies of shareholder resolutions and meetings;
- Register of members/shareholders;
- Register of directors;
- Register of directors’ usual residential addresses;
- Register of secretaries;
- Register of people with significant control and their residential addresses; and
- Register for charges registered before 6 April 2013 (for charges registered after 6 April 2013, a register is not required by law but is, however, very useful).
The minutes of directors’ meetings and copies of shareholder resolutions and meetings, these records must be kept for 10 years from the date of the meeting or the resolution. If this is not adhered to, every officer of the company who is in default will have committed an offence and is liable to a fine (Fines are rarely imposed but that doesn’t mean they can’t or won’t be!).
One of the most important registers is the register of members/shareholders. One must bear in mind that if someone purchases shares in a company, that person will not become the legal shareholder of the company until the date that his or her name is entered into the company’s register of members/shareholders. If a company’s books are not up-to-date, this can cause unnecessary delays, particularly should the company wish, for example, to buy back shares from a shareholder. More importantly if the company is to be sold, company books in disarray could cause delay, or a potential buyer to have cold feet or to renegotiate the deal.
There also exist other registers such as the register of allotments or the register of transfers; these registers keep track respectively of new shares in the company or existing shares that are transferred from one shareholder to another. Whilst these registers are not legally required, they can be very useful when used in conjunction with the register of members/shareholders, especially when used to check the accuracy of the latter.
So, what initially might seem to be a mundane administrative task is in fact an extremely important exercise.
If you would like assistance with keeping your company’s books in check or need them to be reconstituted, Rix & Kay Solicitors offer company secretarial services as well as reconstitution of statutory books. Please call us on 01825 761555 for guidance or contact Hannah Balameh at (HannahBalameh@rixandkay.co.uk).