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What are statutory registers?
Statutory registers, commonly referred to as a company’s statutory books, are official records that contain information about a company and its directors and shareholders. The Companies Act 2006 requires companies to maintain certain statutory registers and these must be kept at their registered office or at an alternative location that has been approved by the registrar of companies. These registers include:
Why do they need to be kept up-to-date?
First and foremost, it is a legal requirement for UK companies to maintain accurate and up-to-date statutory registers. Failing to do so can result in serious consequences for the company and its directors, and may result in a fine being levied by the registrar of companies if it is found to be in breach of its legal obligations.
In addition, keeping the statutory registers up to date can provide a useful reference for the company and its directors when making important decisions. It is key that directors are aware of the company's current share capital, any charges that have been registered against the company's assets, and any changes to the company's directors or members.
Further, one of the key functions of a company's statutory registers is to validate share ownership. The register of members, also known as the shareholder register, is a record of all individuals or entities that own shares, or have owned shares, in the company. An up-to-date register of members can help to protect the company and its shareholders in the event of a dispute. For example, if there is a disagreement over the ownership of shares, the register of members can be used as evidence to determine the correct ownership.
Having up-to-date statutory registers is also important when a company is being sold. The buyer will typically want to review the company's statutory registers as part of the due diligence process to ensure that the company is in good standing and that there are no legal issues or liabilities that may be apparent on the face of the registers.
Inaccurate or out-of-date statutory registers could lead to delays in or problems with the sale process, as the buyer may need to request additional information or clarification.
It is therefore essential for the seller to ensure that the statutory registers are accurate and up-to-date prior to entering into negotiations to sell the company. This will help avoid any unnecessary problems with the sale process.
In summary, a company’s statutory registers play a crucial role in validating share ownership and helping to protect the rights and interests of the company and its shareholders. It is therefore important for these registers to be kept up-to-date at all times in order to avoid fines and other adverse consequences.
To discuss the issues raised in this article in more detail, please call us on 01484 821 500 or fill out our online enquiry form to request a call back.