Maintenance of Internal Books and Records

Introduction

The statutory books (more commonly known as the company books) consist of records, which every company is required to keep which reflect the history of the company. The Companies Act 1985 (as amended) makes it compulsory to keep at least five “statutory registers”, namely Register of Members; Register of Directors; Register of Company Secretaries; Register of Directors' Interests (in shares and debentures of the company) and Register of Charges. In addition minutes of board meetings and of general meetings, accounting records, and copies of directors' service contracts should be kept with the statutory books. These must be written up on incorporation, and amended from time to time to reflect any changes so that they are always up-to-date.

Traditionally these registers have been kept in hard form, and have been updated by hand, by the company secretary or director. However, many companies now keep their registers in computerised form. If the requirements are not met, any Director or other officer of the company in default maybe liable to a fine. The statutory books must be kept at the registered office and available for inspection by the general public.

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Register of Members

The Register of Members must contain the following information:

• the name and addresses of the shareholders;
• the date at which each person was registered as a shareholder;
• the date at which any person ceased to a shareholder; and
• The number of shares held by each shareholder, distinguishing each share by its number (if any) and, where the company has more than one class of issued shares, by its class.

Register of Directors and Secretaries

In relation to directors the following information must be completed in the Register:

• the present and any former first names/forenames or surname of an individual;
• their usual residential address;
• their nationality;
• their business occupation;
• their date of birth; and
• particulars of any British company directorship (excluding directorships in dormant or group companies) held by the director or which he has held during the preceding 5 years.

As to the Secretary details of their present and any former Christian names (forenames or surname) and their usual residential address must be included.

Register of Directors’ interests

The register of directors’ interests records the number of shares and debentures in the company held by each director. It also records the number of shares or debentures held by the spouse of any director and by his children under the age of 18.

Register of charges

A Register of Charges should be kept by every company, even if there are no charges to be entered in the Register, since the person having the right to inspect the Register will wish to know whether or not a company has any charges specifically affecting the property of the company or any floating charges (see paragraph 1.4.1 above) or undertaking on any of its property. The Register must contain particulars of all charges on any property of the company. In addition, companies are under the obligation to keep copies of instruments creating charges. Please see the document entitled “Raising Finance” for further information on floating and fixed charges.

Directors’ service contracts

Copies of Directors’ service contracts, which are not terminable by the company (within 12 months) without payment of compensation, must be made available for inspection without charge by any shareholder of the company.

Minutes

Minutes of general meetings must be kept at the registered office. There is no requirement for other minutes to be kept at a specified place. Only minutes of a general meeting are to be available for inspection by the shareholders.

Inspection of the Statutory Books

The statutory registers must be available for inspection by the shareholders free of charge and any other person (members of the public) for a fee (currently £2.50 per hour) during business hours. Shareholders and any other person are also entitled to request copies of these registers at a fee, which the company must supply within ten days. The fee is calculated by reference to a scale relating to the number of copies required.

Recent Company Housekeeping Changes

As can be seen from paragraph 5 above, and the document entitled “Directors”, as well as maintaining internal books and records, companies also need to make filings with the Registrar of Companies. In addition, companies at various times need to communicate with shareholders (i.e. in order to give them notice of a general meeting, or to send them a copy of the annual accounts). It is now possible in some instances to communicate with shareholders electronically. Companies therefore no longer have to rely solely on information being sent by post.

In addition, some of the requisite filings at Companies House can now be made electronically, including annual returns, Forms 288a and 288b (dealing with the appointment and resignation of directors and Form 287 (dealing with a change of registered office). The aim for the future is to widen this flexibility for incorporation, and more general filing.

Finally, as noted in paragraph 5.11 above, there is currently a wholesale review taking place of the Companies Act requirements for smaller companies. In essence, the aim is a change of emphasis with simplified accounts, auditing and annual general meeting requirements for smaller companies being the norm.