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Company statutory records and the recent changes under the ECCTA 2023

| Duncan & Toplis | 14 May 2024

The Economic Crime and Corporate Transparency Act 2023 (‘ECCTA’) became law in October 2023, with the new requirements regarding statutory register maintenance coming into force in March 2024. This is an important area alongside the Companies Act 2006 (the Act) for directors of companies to digest, as failure to comply with the legislation may result in criminal liability and financial penalties.

Statutory registers required to be maintained at a company’s registered office

The following list of registers is required to be maintained at the company’s registered office (or its Single Alternative Inspection Location (SAIL) if required) which must be notified to Companies House and be made available for inspection at that address:

  • Register of members (shareholders)
  • Register of debenture holders
  • Register of directors and company secretary
  • Register of charges (for charges created before 6 April 2013)
  • Register of persons with significant control (PSCs)

The most important of these is the register of members which contains information on past and present shareholders (or guarantors, if a company is limited by guarantee), providing a continuous record of ownership since the company’s incorporation. Where these registers have not been correctly maintained, problems can arise, as they’re often required in a range of circumstances, i.e. determining quorum for shareholder meetings, establishing true ownership, in the exercise of legal rights or when providing evidence during a sale of a company. The law states that the register of members is prima facie proof of ownership of the company’s shares and as such Companies Court will usually ask to see this register as evidence of existing shareholders in disputes.

With effect from March 2024 however, the ECCTA removes the requirement to maintain separate registers for the following:

  • Register of directors and company secretary
  • Register of PSCs

But, historic registers should be retained for the life of the company, and if a company’s statutory registers are incomplete or non-existent, then directors could still be liable and suffer the consequences of financial penalties. We would highly recommend arranging for a reconstitution of the statutory registers. Further, there will now be additional obligations to keep historical information about a company’s members for up to 10 years.

Additional record requirements

Statutory records include key corporate documentation such as instruments of transfers, shareholders’ agreements, directors’ service agreements, statutory accounts along with the company’s certificate of incorporation, board minutes, shareholder resolutions and articles of association, all of which should ideally be stored with the company’s statutory registers.

Under the Act, records of decisions taken at a board meeting, for example, are required to be retained for at least 10 years from the date of the meeting.

Companies House

The ECCTA now places an emphasis on ensuring that the information filed by a company at Companies House is correct and up to date, making it essential that a company complies with the legal filing requirements.

Under the ECCTA it will no longer be possible to keep details of a company’s members on the central register maintained by Companies House. Any company that has previously elected to keep its register of members on the central register will need to start keeping its own register of members again.

It is a common misconception that Companies House is proof of a company’s share history. Transfers, for example, are not required to be reported until the next annual confirmation statement is due and so the shareholding position is merely a snapshot of the company as of the last filed statement date.

You can read more about Companies House's new powers relating to confirmation statements, the changing of company names and new powers of the registrar here.

Consequences of poor housekeeping

A company that does not maintain up-to-date and accurate registers is committing an offence, with the volume of missing information from the statutory registers determining the level of financial penalty, up to a maximum of £5,000. For example, failure to maintain the register of members could result in a fine of up to £1,000, plus a further sum of £100 per day for each day that the breach continues.

The company and every officer (director, manager, secretary) in default is deemed to have committed an offence (i.e. authorises or permits, participates in, or fails to take all reasonable steps to prevent the contravention) and risks damage to the reputation of the company and its officers.

If you’re concerned about the added responsibility

The additional burden can be worrying. Duncan & Toplis’ Company Secretarial team can assist with maintaining your company’s statutory records, ensuring compliancy with the relevant legislation and giving your company’s directors peace of mind. Our annual service includes assisting with administrative changes and drafting board minutes as necessary for the following:

  • Changes of registered office address, accounting reference date, auditors, Single Alternative Inspection Location (SAIL)
  • Approval of annual accounts, and basic interim or final dividends
  • Resignation of director
  • Changes to guarantors (for companies limited by guarantee)
  • Authorisations for individuals to act as a signatory; and company’s bank mandate;
  • Consolidation or replacement of share certificates; (including indemnity form)
  • Companies House filings for changes to details for People with Significant Control; directors or secretary
  • Filing of confirmation statements to update SIC codes, statement of capital and/or shareholder list as needed

If it comes to your attention that the company’s registers are inaccurate, incomplete, or have been lost or destroyed, this should be rectified as soon as possible.

Our Company Secretarial team can assist with the rectification of statutory registers, get in touch with our team of experts.

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