Corporate governance and compliance - Documentary and record-keeping obligations

Learning Outcomes

After studying this article, you will be able to identify and explain the main documentary and record-keeping obligations imposed on companies under the Companies Act 2006. You will understand the statutory registers, financial reporting, filing duties, and the consequences of non-compliance. You will also be able to apply these requirements to SQE1-style scenarios and advise on directors’ responsibilities for compliance.

SQE1 Syllabus

For SQE1, you are required to understand the practical and legal requirements for company documentary and record-keeping compliance. Focus your revision on:

  • The statutory registers companies must maintain (register of members, directors, secretaries, PSC register)
  • Financial record-keeping and annual accounts obligations
  • Filing requirements at Companies House (accounts, confirmation statement, event-driven filings)
  • Directors’ duties regarding record-keeping and compliance
  • Consequences of non-compliance (penalties, criminal liability, disqualification)
  • The role of documentary obligations in corporate governance and transparency

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Which statutory registers must every private limited company maintain under the Companies Act 2006?
  2. What is the deadline for a private company to file its annual accounts at Companies House?
  3. What is the purpose of the confirmation statement, and how often must it be filed?
  4. What are the possible consequences for directors if a company persistently fails to file its accounts on time?

Introduction

Companies in England and Wales are subject to strict documentary and record-keeping obligations under the Companies Act 2006 (CA 2006). These requirements are central to corporate governance, ensuring transparency, accountability, and legal compliance. Directors are responsible for maintaining accurate records, making timely filings, and keeping statutory registers up to date. Failure to comply can result in financial penalties, criminal prosecution, and disqualification.

Statutory Registers: The Core Company Records

Every company must maintain certain statutory registers at its registered office or a notified inspection location. These registers are essential for transparency and must be kept up to date and available for inspection.

Key Term: statutory registers
The official records a company is required by law to keep, including registers of members, directors, secretaries, and people with significant control.

Key Term: register of members
The record of all shareholders, their addresses, and shareholdings.

Key Term: register of directors
The record of all current and former directors, including names, service addresses, and other particulars.

Key Term: register of secretaries
The record of company secretaries (if any), including names and addresses.

Key Term: PSC register
The register of people with significant control, identifying those who own or control more than 25% of shares or voting rights, or otherwise exercise significant influence.

Accounting Records and Annual Accounts

Companies must keep adequate accounting records that show and explain the company’s transactions and financial position. These records must be sufficient to prepare annual accounts that give a true and fair view.

Key Term: accounting records
The source documents and ledgers that record a company’s financial transactions and position.

Key Term: annual accounts
The yearly financial statements (including balance sheet and profit and loss account) that must be prepared and filed by a company.

Filing Annual Accounts

Private companies must file their annual accounts at Companies House within nine months of the end of their financial year. The accounts must be approved by the board and signed by a director.

Strategic and Directors’ Reports

Medium and large companies must prepare a strategic report and a directors’ report, providing information on business performance, risks, and governance.

Confirmation Statement

Every company must file a confirmation statement (formerly the annual return) at least once every 12 months, confirming that company information held by Companies House is up to date.

Key Term: confirmation statement
The annual filing confirming that company details at Companies House are current and accurate.

Minutes and Resolutions

Companies must keep minutes of all board meetings and general meetings, as well as copies of all resolutions passed by directors and shareholders.

Key Term: meeting minutes
The official written record of decisions and discussions at directors’ or shareholders’ meetings.

Filing Requirements at Companies House

Certain documents must be filed at Companies House to ensure public access to key company information. These include:

  • Annual accounts
  • Confirmation statement
  • Notices of appointment or resignation of directors and secretaries
  • Changes to the registered office address
  • Allotment of new shares
  • Changes to the PSC register

Key Term: event-driven filing
A filing required when a specific change occurs in the company, such as a new director appointment or share issue.

Directors’ Responsibilities for Compliance

Directors are legally responsible for ensuring that the company complies with all documentary and record-keeping obligations.

Key Term: directors’ duties (record-keeping)
The legal obligations of directors to maintain accurate records, make filings, and keep statutory registers up to date.

Consequences of Non-Compliance

Failure to comply with documentary and record-keeping obligations can result in:

  • Automatic financial penalties for late filing of accounts or confirmation statements
  • Criminal prosecution of directors for persistent non-compliance
  • Disqualification from acting as a director
  • Civil liability to shareholders or creditors for losses caused by breach

Worked Example 1.1

A private company fails to file its annual accounts for three consecutive years. What are the potential consequences for the company and its directors?

Answer: The company will incur escalating financial penalties for each late filing. Persistent failure may result in criminal prosecution of the directors, and Companies House may strike the company off the register. Directors could also be disqualified.

Worked Example 1.2

During a routine inspection, it is discovered that a company’s PSC register is incomplete and has not been updated for over a year. What action should the company take, and what are the risks if it does not comply?

Answer: The company must update the PSC register and file the relevant information with Companies House. Failure to do so can lead to criminal penalties for the company and its officers.

Practical Importance for Corporate Governance

Documentary and record-keeping obligations are not just technical requirements—they support good governance by enabling shareholders, creditors, and regulators to access accurate information. They also help directors demonstrate compliance with their duties and protect the company from legal and reputational risks.

Revision Tip

For SQE1, focus on the statutory registers, annual accounts, confirmation statement, and directors’ responsibilities for compliance. Be able to explain the consequences of non-compliance in a scenario.

Key Point Checklist

This article has covered the following key knowledge points:

  • Companies must maintain statutory registers (members, directors, secretaries, PSC) and keep them up to date.
  • Adequate accounting records must be kept to prepare annual accounts showing a true and fair view.
  • Annual accounts and a confirmation statement must be filed at Companies House within statutory deadlines.
  • Minutes of meetings and copies of resolutions must be retained for at least ten years.
  • Directors are legally responsible for compliance with all record-keeping and filing obligations.
  • Non-compliance can result in financial penalties, criminal prosecution, disqualification, and civil liability.

Key Terms and Concepts

  • statutory registers
  • register of members
  • register of directors
  • register of secretaries
  • PSC register
  • accounting records
  • annual accounts
  • confirmation statement
  • meeting minutes
  • event-driven filing
  • directors’ duties (record-keeping)
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