Statutory Books – Keep them up to date or be fined!
Sana Sadiq, solicitor in the corporate healthcare team at law firm Hempsons considers the importance of maintaining company statutory registers.
Published in Practice Management February 2020
Limited companies are becoming increasingly common in the GP world – with GP Federations, and some GP practices incorporating rather than remaining as partnerships. PCNs are now talking of incorporation to ring fence their liabilities.
With the benefits of having a limited company, come the administrative responsibilities which are greater than those of partnerships and are often overlooked.
Companies are legally required to notify Companies House where the ‘statutory books’ are kept, which is either the registered office or a “Single Alternative Inspection Location” (commonly referred to as a “SAIL” address) where they can be inspected. The statutory books can be held in hard copy or electronic copy and they must be kept up to date with any changes that take place. The company could keep certain information on the public register at Companies House, but then anyone can look up the information.
As a minimum, the statutory books must include:
- allotments and transfers of shares;
- directors’ residential addresses;
- company secretaries;
- charges (created before 6 April 2013)
- persons with Significant Control; and
- copies of shareholder resolutions passed, and minutes of meetings.
The statutory books are a convenient place to store other documents, such as the certificate of incorporation, articles of association, shareholders’ agreement, directors’ service agreements, statutory accounts and other key contracts entered into by the company.
Keeping the statutory books up to date is not only a legal obligation, it is also a vital reference point when preparing for, and conducting, meetings and passing resolutions which must comply with the company’s rules, to avoid a challenge later as to a decision being properly passed.
In the case of PCNs and GP Federations, there are often many shareholders, so keeping track of them (when partners leave for example) and the number of votes required to pass a resolution may be difficult.
Problems arise where the statutory books are not correctly maintained. For example, shareholders’ resolutions may be invalid if a quorum is not present at the meeting, which may depend on the number of shares each shareholder presently holds.
Correctly maintained, the statutory books will enable the determination of the correct position.
If a company fails to adhere to the requirements to keep statutory books, an offence is committed by the company and every officer (e.g. directors) in default is liable, and a fine of up to £5,000 may be imposed on the company and its officers.
If the statutory books have been lost or destroyed it is possible to have them reconstituted. This should be done as soon as possible after the realisation that the company does not have statutory books.
Outsourcing the maintenance of statutory books to a professional firm may be the option to be assured that your statutory books are in order.
Sana Sadiq is a Solicitor is in the corporate team at Hempsons, the specialist healthcare law firm.
For more information contact her on 020 7484 7627 or email her at email@example.com
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