Why are statutory books important? A short guide for business owners.

Under the Companies Act 2006, companies, whether public or private, are legally required to keep and maintain an up-to-date statutory register.

These statutory registers are commonly referred to as “statutory books”. Despite this duty imposed on companies, Directors and Secretaries are not always aware or forget to update their register, where necessary. If you fail to comply with the Companies Act, it can have significant consequences for your business.

What are statutory books?

A statutory book is a bundle of documents which contains key information about your company. For your statutory book to be compliant under the Companies Act 2006, it must contain:

• Register of Companies’ charges.
• Register of Directors and Secretaries.
• Register of Shareholders, both past and present, which includes a complete history of their individual shareholdings.
• Register of corporate and constitutional documents, including certificates of incorporation, board minutes, resolutions, and articles of association.
• Register of Persons with Significant Control (PSC).
• Register of share transfers and allotments.

Why are statutory books important?

Financial penalties

The Officers of the Company (Directors and Secretaries) have a duty under the Companies Act 2006 to maintain statutory books. Therefore, if you fail to comply with your obligations, it will constitute an offence and you may be subject to financial penalties.

Certainty

Although company records are submitted to the Companies House in a Confirmation Statement, it is only required to be submitted once every 12 months, therefore only providing information of a company up to that point. This means that, after making a record to the Companies House, if you make any changes your business, it will not be visible.

Having an updated statutory book provides an effective and efficient way for members of the company to access the most up to date information about the Company. This is particularly useful in identifying shareholders in the event of shares disputes.

Practical considerations

There are several decisions you may want to make with regards to your company which will require proof of Company history. Statutory books provide validation and proof of necessary information of the Company in several circumstances such as shareholder disputes, confirming shareholder structure, applying for loans and investments, selling your company, and insolvency proceedings.

If you have any questions, we recommend that you seek legal advice. Please contact our Corporate and Commercial team who will be able to advise you further.