Keeping your company records in line with legal requirements can involve a great deal of red tape. But what’s actually needed and how can you keep time spent on admin to a minimum?
As a director your main concern is making your business successful rather than being a slave to record keeping. But you can’t avoid this completely as company law requires a minimum level of statutory records to be kept. The key is knowing what’s essential and how to stay on top of it with a minimum amount of effort.
What the law requires
The Companies Act 2006 requires every company to keep:
o a register of members, e.g. shareholders
o a register of directors and company secretaries (if you have one)
o a register of charges, e.g. details of persons or organisations, say a bank, which has a right over assets of the company, usually as security
o minutes of directors’ and shareholders’ meetings and resolutions
o accounting records.
Who’s keeping check?
As a director it’s your neck on the line if proper records aren’t kept. However, in practice, Companies House (CH), HMRC or other government agencies are unlikely to inspect the statutory records, other than accounting records, of small private companies and there are no financial penalties for not keeping them. You might therefore wonder why it’s worth bothering.
Keep an eye on the future
If you’re the sole director and shareholder of a company, statutory records are nothing more than a necessary evil. But if there are others involved the records’ importance becomes clear when you later need to rely on them. For example, in the event of a dispute with a fellow director over remuneration levels it will be impossible to prove beyond doubt what was agreed without minutes of board meetings etc. You may think you’re in perfect harmony with your colleagues, but in our experience most companies have a boardroom dispute at some time, even in husband and wife run companies.
If paperwork isn’t your strength you won’t relish maintaining statutory records and so there’s a greater likelihood they’ll fall into arrears. But there are tools to help.
Tip 1. These days statutory records can be kept electronically so no paper is required. You can download free or cheap software, from around £70, that will guide you through statutory record keeping. It can also reduce the time you spend on admin and ensure that your records are in the proper format.
Tip 2. If you prefer a hands-off approach Stewart Accounting Services can handle your statutory records. Basic services cost around £120 per year, but there are additional fees for extra services, e.g. drafting resolutions.
As well as accounting records you must keep registers of shareholders, directors, company secretaries, charges on company assets and a record of resolutions. These can be kept electronically using free or cheap software to save time. Alternatively, we will handle the job for as little as £120 per year.