Since the introduction of the requirement for companies to keep a PSC Register as part of their statutory books (also known as statutory registers) in April this year, I’ve chatted to a number of business owners about the rules. The overwhelming response has not been, “it’s a nightmare,” or “what on earth is a PSC?” or “how is that reducing red tape?” as I had expected. Instead, I keep being asked, “What are statutory books?”
I’m often looking at the finer workings of companies as part of the due diligence process in business sales and purchases. I therefore know that lots of companies rely on their accountant to keep statutory registers up to date. I hadn’t however realised that quite so many business owners are unaware of the legal obligations to keep and maintain statutory books – and tell Companies House where these are as they’re open to inspection.
So, for those in the dark, here’s a little summary:
All companies must maintain certain records. These are:
- Minutes of board meetings
- Records of Shareholder Resolutions
- Register of members
- Register of directors
- Register of secretaries
- Register of charges
- Register of people with significant control
The directors (and company secretary if there is one), must keep these records accurate and up to date. Failure to do so is serious as in some cases it is a criminal offence and the officers in breach can be liable to pay a fine. It is also important if you ever plan on selling your company. One of the first questions a buyer will ask is to look at your statutory books as the register of members (or shareholders) is the definitive record of who owns the shares. In theory, if you’re not in the register of members, you don’t legally own the shares!
If you don’t know if you have statutory books, a good first step is to check with your accountant as they may keep them as part of their services to you. If not, it might be time to reconstruct them. For newer companies this can be quick and simple but for those that have been established for a long time it can be fiddly and time consuming.
If you would like to discuss any issues relating to your statutory registers or your company more generally, please contact our corporate department on 0845 287 0939 or complete an online enquiry form.