The limited company records you need to keep

Lawpack on March 27, 2020

When running a limited company, you must maintain certain records about the company’s meetings, directors and shareholders. These are known as ‘statutory books’.

Statutory books are kept for the benefit of the shareholders and the general public.

The limited company records you must maintain are as follows:

  1. Register of Members.
  2. Register of Directors.
  3. Register of Secretaries (if a company secretary has been appointed).
  4. Register of Directors’ Interests. This records the limited company directors’ interests in shares or debentures of the company and its associated companies together with any interest of a spouse or child. This document is optional.
  5. Register of Charges. This records charges (i.e. financial liabilities or commitments) over the property of the limited company.

Each of the registers should be kept at the limited company’s registered office – although you can keep them at another location, in which case file Form AD02 – or, in certain circumstances, at another address within the country of incorporation; Companies House does require to be notified if certain registers, such as the register of members and the register of directors’ interests are kept outside the registered office.

Shareholders can inspect the statutory books free of charge, but the limited company may charge anyone else a nominal fee.

The limited company must also maintain accounting records. Your accountant will be able to advise you on the accounting records which need to be kept. In addition, copies of the directors’ service contracts, if any, and copies of any charges (loans secured on the company’s assets) must be kept by the limited company and be available for inspection to any member of the limited company.

Must the limited company have a minutes book?

A company minutes book is a record of board and shareholder meetings and can take the form of a file.

You are legally required to keep a minute book. Board meetings and shareholder meetings must be fully recorded in writing.

Written company resolutions must also be noted in a minute book.

Company minutes must be signed by a limited company director or chairman and filed in the minute book.

Remember that the limited company must maintain a continuous and up-to-date record of all its actions approved by shareholders and/or directors.

Get example templates for all your company minutes and resolutions.

Related Articles:

The role of limited company directors

Lawpack on March 27, 2020

When you form a limited company, your role as company director is to promote the success of the limited company and to manage the limited company on behalf of the shareholders.

Company directors have extensive powers to manage the limited company, which are delegated by the shareholders in the Articles of Association. But shareholders can dismiss limited company directors by passing an ordinary company resolution at a shareholders’ meeting.

Shareholders holding a simple majority (either alone or collectively with other shareholders) of the issued shares of the company will be able to remove a director and control the board. This is providing that 28 days before the shareholders’ meeting, notice has been given to the limited company of the resolution, and the limited company in turn has given the members notice of the resolution 21 days before the shareholders’ meeting.

When managing a limited company, directors are obliged to act in good faith and in the best interests of the limited company.

They must avoid placing themselves in a position where there is, or could be, a conflict between their personal interest and their duty to the limited company. They must exercise skill and care in their role as limited company directors.

Company directors’ duties are now set out in limited company legislation. A company director’s general management duties are to:

  • Act in accordance with the limited company’s constitution and exercise their powers for proper purposes
  • Act in a way to promote the success of the limited company for the benefit of the members as a whole
  • Exercise independent judgment
  • Exercise care, skill and diligence
  • Declare to the other company directors the extent of any interest in a proposed transaction or arrangement with the limited company

In addition, a limited company director must avoid conflicts of interest and must not accept benefits from third parties.

Sometimes the limited company directors and shareholders are the same people, although there is no requirement that they should be.

Shareholders can, with the Court’s consent bring a derivative claim on the limited company’s behalf against a company director who is in breach of his/her duties or is negligent.

Limited company directors and board meetings

Generally, the company directors manage the limited company and decisions will be taken at board meetings.

Limited company management legislation sets out rules on how limited company board meetings should be run:

Board Meeting Rule #1

The Articles of Association are likely to specify that at least two limited company directors must be present at board meetings (unless there is only one director, when that person will form a quorum).

Board Meeting Rule #2

All the limited company directors in the UK must receive reasonable notice of a board meeting. Company resolutions are passed by a majority of the company directors at the board meeting.

Board Meeting Rule #3

A record of board meetings must be kept. The record is known as ‘board minutes’.

Board Meeting Rule #4

If the directors don’t wish to hold a board meeting, they can pass a written company resolution, provided that all the directors sign that company resolution.

The company resolution is dated when the last director signs it and it’s entered in the board minutes book.

In practice, the day-to-day management of the limited company will be delegated by the board of directors to one or more of them, so that it’s unnecessary to hold board meetings on many matters.

But certain company management activities will require the company directors to act collectively in a board meeting (e.g. issuing shares to shareholders).

Appointing limited company directors

The first company directors are named in the limited company formation documents (Form IN01) filed with Companies House. The company directors are appointed on incorporation of the limited company (i.e. the date on the Certificate of Incorporation).

Additional company directors may be appointed by either the board of limited company directors or the shareholders.

Anyone can be a limited company director so long as they have not been disqualified, are not an undischarged bankrupt, and are over 16.

Related Articles: