Company registers – a short update for business owners
Upcoming changes to company law provide a timely opportunity for businesses to review and consider updating their company registers.
This article provides a short overview of upcoming change in this area, the benefits of having up-to-date company registers and a summary of those registers that a private company must maintain (i.e. the statutory registers).
Trowers & Hamlins LLP can health check company registers or provide a company secretarial service for your business. If you would like to discuss these services or the content of this article further, please let us know.
What is changing?
The Economic Crime and Corporate Transparency Bill (the Bill), anticipated to become law during 2023, introduces a requirement for a company to ensure that an individual member's forename and surname is entered in the register of members.
The Bill will also introduce requirements for a company to verify the identity of its directors and people of significant control and confirm current membership. Further information on these requirements, together with other notable corporate aspects of the Bill will feature in a separate article shortly.
What are the benefits of having up-to-date statutory registers?
Up-to-date statutory registers:
- are required by law. Failure to keep required registers is a criminal offence committed by the officers of the company and the company itself;
- will dovetail with the new process for a company verifying the identity of existing directors and people of significant control and consider compliance with the new provisions of the Economic Crime and Corporate Transparency Bill; and
- provide time and cost efficiencies either for due diligence exercises in connection with future investment, succession planning or ad hoc requests from stakeholders to inspect the registers.
Existing requirements for company registers
A company's registers may be maintained in hard copy or in electronic form. There is a technical requirement that statutory registers are stored in a company's registered office. Often, a company's accountant will hold and maintain electronic copies of the company registers. It is worth checking if the location or existence of company registers is unknown so appropriate remedying action may be taken.
The registers that a company must maintain, the statutory registers, (assuming the company has not elected to keep information on the central register publicly at Companies House) are:
- Register of members: each member of the company must have their own entry showing: (i) name and address; (ii) date of registration (or cessation, if applicable) of membership; (iii) where the company has a share capital, the number and class of shares held and the amount paid for such shares. Additional requirements to keep an index of shareholder apply to a company with more than 50 members;
- Register of directors;
- Register of company secretaries: only required if a company secretary is appointed;
- Register of directors' residential addresses: the addresses are not made public;
- Register of charges: technically only required for charges created before 6 April 2013;
- Register of debenture holders; and
- Register of people with significant control: whether an individual or entity is to be included on this register depends on their level of ownership or control over the company.
In addition to the required registers above, it is considered best practice for a company to also maintain the following registers:
- Register of transfers: in the case of a company limited by shares, the register of transfers is intrinsically linked to the company's register of members and allotment. It provides the ability to trace ownership of shares and facilitates an efficient due diligence exercise;
- Register of allotments: useful for the same reasons set out above. This register allows the ability to reconcile a member's share register with allotments of shares; and
- Register of directors ' interests: maintaining records of director interests may help with requirements to consider conflicts for decision making at board level (either pursuant to a company's articles of association or legislation) or wider due diligence exercises.