What are statutory books?
Companies registered in the United Kingdom are required by the Companies Act 2006 (the 'Act') to keep accurate and up-to-date registers detailing important information about the company, such as who the directors, secretaries and shareholders of the company are. These registers are sometimes referred to collectively as a company's 'statutory books'.
In the case of a private limited company, the statutory books comprise (but are not limited to) the following:
- Register of directors
- Register of secretaries
- Register of directors' residential addresses
- Register of members
- Register of persons with significant control
- Records of resolutions and shareholders' meetings
- Minutes of directors' meetings
The statutory books should be maintained by the company secretary, or if the company does not have a company secretary, then by a director or other person appointed to take responsibility for ensuring they are up to date.
A company's statutory books were traditionally kept in hard copy form; however, they may be kept electronically.
Why are statutory books important?
Failure to keep and maintain certain information within a company's statutory books and records is an offence and both a company's directors and the company itself may face penalties.
Alongside committing an offence, if a company's statutory books are not kept up to date, it could deter investors, or derail a potential company sale.
The register of members rather than Companies House is the definitive authority on who legally owns the shares in the company. If a person is recorded as a shareholder on Companies House but is not included in the company's register of members, then that person may not be recognised as a legal shareholder of the company.
During a company sale, one of the key areas a purchaser's solicitor will be interested in is the company's statutory books. The purchaser's solicitor will want to ensure that those selling the company legally own, and therefore have the right to sell, the business. Alongside this, a seller will be asked to warrant the accuracy of the statutory books and confirm that they have been properly maintained.
In some cases, issues with the statutory books can result in the sale price of the business being affected, or even the sale going abortive.
What if my company does not have up to date statutory books?
If you are concerned that your company does not have up to date statutory books, or they have been lost or destroyed, then get in touch with Clapham & Collinge LLP's specialist Corporate and Commercial team who will be able to help you bring your statutory books up to date and help to fix any issues. Contact our dedicated Client Relations team on 01603 693510, or email us using the 'Make An Enquiry' form on our website.
