Why is it important to have statutory books?
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Companies, whether public or private, are obligated to maintain and update a statutory register under the Companies Act of 2006. Statutory books are the name given to these statutory registers.
Directors and Secretaries are not always aware or forget to update their register, where required, despite the duty imposed on companies. The Companies Act has severe implications for your firm if you do not follow it.
What are statutory books?
A statutory book is a collection of papers that contains important business information. The Companies Act 2006 requires that your statutory book include the following information:
- Register of share transfers and allotments.
- 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).
Why are statutory books important?
Financial penalties
Under the Companies Act of 2006, the officers of the corporation ( Directors and Secretaries) are required to keep statutory records. As a result, failing to meet your responsibilities may be considered a crime and you may face financial penalties.
Certainty
Although a Confirmation Statement is required to be filed with the Companies House every 12 months, it merely provides information about a company up until that time. As a result, if you make any modifications to your company after submitting a record to Companies House, they will be hidden. Members of the corporation can easily get the most recent information about the company thanks to an updated statutory book. When it comes to identifying shareholders in the event of a dispute, this is especially useful.
Practical considerations
When it comes to your business, there are a variety of choices you may want to consider, and proof of company history is required. In certain circumstances, such as shareholder disagreements, confirming shareholder structure, applying for loans and investments, selling your company, and insolvency proceedings, statutory books provide validation and proof of required information.
When selling a company, having an up-to-date register, is the only way that the buyer knows who the shareholders are and who is being paid. Whilst historic inaccuracies might seem trivial, a buyer might be put off if they cannot determine the true identities of the business owners.
Remember that if the statutory books have been misplaced or lost then they can be reconstituted but you should do this as soon as possible.
If you have any questions then please contact our Corporate and Commercial team who will be able to advise you further.
Our articles are intended for general information purposes only and are not a substitute for professional advice tailored to your specific circumstances. We are always very happy to discuss any plans, issues or concerns you may have and to clarify how we might be able to help. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
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