
Insight
The Companies Act 2006 (“the Act”) imposes an obligation on every company to maintain statutory registers (also referred to as “statutory books” or “company registers”), which should show a record of the essential information about a company since its incorporation. Despite this, many directors are either unaware of the requirement to maintain the statutory registers or find the duty to maintain them perpetually at the bottom of their to-do list.
What are Statutory Registers?
Pursuant to the Act, each company must keep the following statutory registers:
Although not required by statute, it is also considered best practice for companies to maintain the following additional registers:
Why maintain the statutory registers?
A failure to maintain the statutory registers of the company may result in an offence being committed by the company itself, along with every officer of the company (e.g. directors and/or company secretary) who is in default. This offence is punishable by a fine.
Although it is tempting to pass over the maintenance of the statutory registers in the face of more pressing day-to-day tasks of running a business, many matters can abruptly bring these documents to the forefront of the company’s priorities.
For many corporate matters, such as a share issue, restructuring or the sale of shares in the company, the statutory registers will be among the first documents requested by the company’s solicitors. In particular, this is because the Register of Shareholders of the company is the primary evidence of the shareholding in the company (not the shareholding shown on Companies House, which is a common misconception).
In many cases, if the company’s statutory registers have been lost or not maintained, records of the applicable information will need to be located and the registers will need to be reconstituted or updated before the relevant legal work can proceed. This usually causes a delay to the transaction, increases legal costs and can take up a large amount of the directors’ valuable time in trying to locate the historic information.
In addition to the legal obligation for a company to maintain its statutory registers, it is also an obligation to have the statutory registers open to inspection by any shareholder of the company (free of charge), or to a member of the public upon the payment of a fee. Where a company receives a valid request for inspection, it must comply within five working days or it and every officer of the company who is in default will commit an offence (again punishable by a fine).
If a company cannot locate its statutory registers, it is vital that it takes legal advice as early as possible.