Statutory registers may be kept in hard copy at the company’s registered office address or at a single alternative inspection location (known as the company’s “SAIL” address). Therefore, in light of government lockdown measures and the practice of social distancing many companies have been unable to access their statutory registers. This in turn may result in the company being unable to provide its statutory registers in compliance with the Companies Act 2006 (i.e. if a shareholder asks to inspect them), or where required by the company’s lenders and/or other advisers. On the other hand, companies who hold their registers in electronic form should be able to access them.
Obligations on companies to keep statutory registers
Statute imposes an obligation on companies to keep some registers, such as the register of shareholders, register of people with significant control and the register of directors and secretaries. Others, such as the register of share transfers, are kept by companies as a matter of best practice.
If a company fails to abide by the requirement to keep statutory registers, the company and its officers will have committed an offence. Breach of the requirement to keep and maintain statutory registers may result in a fine of up to £5,000 being imposed on the company and its officers, in addition there is a risk of the officers being found to have breached their directors’ duties and being subject to tougher penalties. Therefore, directors should not assume that the company secretary will maintain and update the registers unless they have specifically agreed or have been instructed to do so. Furthermore, due to the current lockdown measures the company secretary may not be able to access the statutory registers.
How must a company hold its statutory registers?
Traditionally statutory registers were kept in bound books. However, statutory registers are allowed to be kept in other formats. Under the provisions of s1135 of the Companies Act 2006, statutory registers may also be kept in electronic form as long as a hard copy is capable of being produced on request (i.e. they can be printed out). The advantage of this is that the statutory registers will be available at different locations. However, if the statutory registers are kept electronically the company must take steps to prevent their falsification. Sensible precautions include password protecting the registers and ensuring the company’s computer system is secure.
Private companies can now elect to keep all or some of their statutory registers on the public register at Companies House. However, be aware that if a company chooses this method then information not usually available to the public will become available (for example a director’s full date of birth). Although a company can opt in and out of using the public register, once information is uploaded to Companies House it cannot be removed. Furthermore, if the register of shareholders needs to be updated regularly (for example) then it will probably be simpler for a company to maintain its own register and only inform Companies House of the changes annually using the Confirmation Statement. A decision to use the public register must be made by all shareholders and filed at Companies House. To keep its statutory registers at Companies House a company must submit the relevant forms (EH1 to 6) at Companies House. If a company has elected to keep their registers at Companies House, the company overview page on Companies House will include a tab named ‘Registers’ in which the registers can be viewed by the public.
The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP.