Statutory books can often be forgotten about, left to gather dust, or not made readily available for inspection, but they must be kept up to date. The Companies Act 2006 requires every company to maintain a set of registers and failing to do so is an offence under the Act, punishable by a fine of up to £5000.
As a company director, you are required by law to keep your business’ statutory registers available for inspection, but how do you know if you’re in breach of your statutory duties?
What are statutory books?
Statutory books are made up of several important registers and documents. They are often in paper form but can also be kept electronically. The legal obligation to keep statutory registers applies to:
- Register of Members
- Register of Directors
- Register of Directors’ Residential Addresses
- Register of Company Secretaries
- Register of People with significant control (PSC)
- Register of Charges (for charges created before 6th April 2013)
As a matter of good practice, the company’s statutory books will often also contain the following:
- Register of Allotments and Applications
- Register of Transfers
- Share Certificates
- Board Minutes
Why do you need statutory books?
Besides the large fine and potential breach of statutory duties, if you are looking to sell the shares in your company, a buyer will request sight of the company’s statutory books as part of their due diligence process. The Register of Members is the definitive legal record of who the company’s shareholders are (which is why the buyer always wants to see it!).
If you are thinking of selling your company, it is important to check that your statutory books are up to date. Failure to do so is one of the most common issues in the sale of a company and could delay the process (costing you money).
The company’s statutory books should also be readily available for public inspection.
They should be available to inspect at the company’s registered office or any other address that has been notified to Companies House. The company can also elect to have their statutory registers online, but it’s important to note that confidential information will become part of the public register and is open for anyone to view and take copies of that information.
Where do I stand if my statutory books are out of date?
If your company’s statutory books are out of date or have been lost, they should be reconstituted as soon as possible and that is where we can help.
Our specialists will be able to guide you in relation to the options, either with supporting documentation or a Court order. We have extensive experience in dealing with these matters and can help you organise your statutory books
Our solicitors can advise on sales and purchases of companies as well as the maintenance of statutory books. If you are thinking about selling your business, or are concerned about your statutory books, make an enquiry, or call today to speak to one of our corporate law experts.