What are statutory books?
Often referred to interchangeably asstatutory registers,company books orcompany records, pursuant to the Companies Act 2006, UK companies are required to hold and maintain registers and other records. These must provide a complete and accurate record of certain information about the company from incorporation to the present.
Why do you need statutory books?
It is an offence for a company to not keep up to date registers which are readily available for inspection. The consequence of not being able to produce these is an unlimited fine which may be imposed on the company itself or its directors and company secretary. It is therefore important to ensure that accurate statutory books are held and maintained.
That said, when acting on sales and acquisitions, we often see cases where statutory registers are either not held or not correctly maintained by the target company with many sellers being unaware of the requirements around maintaining them and in many cases, not knowing what they even are. Any issues with the target companys statutory registers will always be uncovered by a well-advised buyer during the due diligence process, as reviewing the registers is key to establishing the history of a company and verifying the legal title to shares. When acting for buyers, we would always ask the sellers to rectify defective statutory registers prior to completion, which can be an onerous task when done retrospectively, creating additional legal fees for the sellers and sometimes causing delays in the deal process.
What statutory books are required?
Companies are legally required to hold the following statutory registers:
Register of directors
This register must contain a record of all past and present directors, as well as required particulars for each director. The required particulars for individual directors are:
- full name;
- date of birth;
- country of residence;
- service address (this can bethe companys registered office);
- nationality;
- occupation;
- date of appointment; and
- date of cessation (if relevant).
If the director is a corporate entity, the required particulars will differ slightly to include information about the entity, rather than personal information.
Register of directors residential addresses
This register must contain the residential address of each director and is held separately to the general register of directors. It is not open for inspection.
Register of members
This register must contain a record of all past and present shareholders and details of their shareholding. The following information is required for each member:
- full name;
- address;
- date of appointment
- date of cessation (if relevant);
- the number and class of shares held; and
- the amount paid for the shares.
Register of PSCs
This register must contain a list of the people with significant control over the company. The following information must be available for each PSC:
- full name;
- address;
- date of birth;
- nationality;
- date of appointment;
- date of cessation (if relevant); and
- the nature of their control.
For a person to be a PSC, they must meet one or more of the following criteria:
- They hold, directly or indirectly, more than 25% of the shares in the company.
- They hold, directly or indirectly, more than 25% of the voting rights in the company.
- They are entitled, directly or indirectly, to appoint or remove a majority of the companys board of directors.
- They have the right to exercise, or actually exercises, significant influence or control over the company – this is only used if none of the first 3 conditions are already met.
- They have the right to or actually exercises significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.
If a company does not have a PSC, a statement must be registered confirming this, as the register cannot be blank at any time.
Register of secretaries
This register must contain a record of all past and present secretaries. The following information must be available for each secretary:
- full name;
- service address;
- date of appointment; and
- date of cessation (if relevant).
Companies are no longer required to have a secretary by law, however they are legally required to hold the register.
Register of charges
This is only applicable to companies incorporated before 6th April 2013 and should contain any information regarding charges that were created before this date (i.e. any form of security over the assets of the company in favour of a lender – debentures, mortgages etc).
What other company information should be held?
In addition to the above, companies are also required to keep a record of all of their meetings and resolutions for a period of ten years.
Many companies also choose to hold additional registers, most commonly a register of allotments and a register of transfers. These are not required by law, however it is best practice to maintain them as they can be useful when establishing company history.
Where should I store statutory books?
The statutory books must be available for inspection at the companys registered office address or a single alternative inspection location (SAIL) address. They can be held electronically or in paper format.
Another available option is for the company to elect to hold the registers at Companies House, however, this does mean that the information will be made available to the public.
What happens if something changes within the company?
If there are any changes made within the company which affect the statutory registers, the registers should be updated immediately. A lot of the information held within a companys statutory registers must also be filed at Companies House within 14 days of the change.
Next steps
Please get in touch with our Corporate team if you require assistance with your companys statutory books. We also provide a wider company secretarial service which provides many administrative services, including maintenance of the statutory registers, designed to assist our client companies in complying with their statutory obligations.
