Whether you call them Stat Books, Company Books or Company Registers, for many directors, maintaining the Statutory Registers is seen as an administrative task and left to the company’s admin team, accountants or solicitors. Although professionals often maintain the registers on behalf of their clients, the directors and company secretary remain liable for them, and if not kept up to date can suffer the consequences under the Companies Act.
When preparing for a sale, one of the first requests from a buyer will be to provide a copy of the Statutory Registers, as they will need to be happy that the sellers actually own the shares they are trying to sell.
The Statutory Registers are one of the main pieces of evidence of who owns the shares in the company, who can exercise shareholder rights and who can receive dividends, so need to be kept up to date.
Contrary to popular belief, Companies House is not always an accurate source of information because it only keeps a record of the documents that are provided to it. As a result, if there have been errors with filing in the past, then the current situation might not be reflected at Companies House. Also, since the introduction of the Persons of Significant Control regime, exact details of the number and class of shares held by each shareholder is less easy to determine.
An additional requirement of the Persons of Significant Control regime is that there needs to be a Register of Persons of Significant Control, which we often find have not been created in companies with older physical Statutory Registers. Having the information at Companies House is not enough to meet a director’s statutory duties.
We often encounter situations where companies have been run on a fairly informal basis, and numerous shareholders have come and gone over the years. A consequence of this is that when the owners come to sell the company, we have to go back through the share history to ensure it is reflected in the Statutory Registers, which can be a time-consuming (and costly!) task.
As they say, “prevention is better than cure!” In the long run it is much easier to maintain your Statutory Registers as you go, rather than either having to update them after many years of neglect or completely recreate them when you really need them.
A few tips for directors and company secretaries:
- If you don’t know where your Statutory Registers are and can’t find them in the office, check with your accountants and solicitors.
- If the Statutory Registers have not been looked at in a while, briefly look through them to see if they reflect the current situation.
- If your Statutory Registers are being kept elsewhere then make sure you file a SAIL (Single Alternative Inspection Location) Notice at Companies House.
- If you can’t find them then consider having the Statutory Registers reconstructed.
If you’re unsure about your Statutory Registers and need help, please contact the Corporate and Commercial department at BHW Solicitors at firstname.lastname@example.org or 0116 289 7000.