Corporate governance and compliance - Documentary and record...

Learning Outcomes

This article outlines core documentary and record-keeping obligations for companies under the Companies Act 2006, including:

• The statutory registers that must be maintained (members, directors, secretaries, PSC), where they may lawfully be kept (registered office, SAIL, or central register), and the scope of inspection rights for members and third parties.
• The content, updating, and “holding statement” requirements of the PSC register, together with the interface between the internal register and filings at Companies House when PSC information is incomplete or changes.
• What amounts to “adequate” accounting records, the approval and filing timetable for annual accounts, and how size-based exemptions for small and micro‑entities affect disclosure and audit obligations.
• The distinction between cyclical annual filings and event‑driven filings, with typical SQE1 examples such as appointments and resignations of directors, share allotments, changes to registered office or SAIL, and registration of charges.
• Which resolutions and meeting minutes must be retained internally, which resolutions must be filed on the public record, and the statutory minimum retention periods relevant to exam problem scenarios.
• How directors’ general duties on compliance, care, skill, and diligence interact with documentary obligations, and the principal criminal, civil, and regulatory consequences where filing or record‑keeping defaults occur.
• Practical governance reasons why accurate records and timely filings matter, including transparency for shareholders and creditors and the risk of strike‑off or disqualification where failures are persistent.

SQE1 Syllabus

For SQE1, you are required to understand the practical and legal requirements for company documentary and record-keeping compliance, with a focus on the following syllabus points:

• The statutory registers companies must maintain (register of members, directors, secretaries, PSC register) and inspection rights
• Financial record-keeping and annual accounts obligations, including reporting exemptions and audit where applicable
• Filing requirements at Companies House (accounts, confirmation statement, event-driven filings such as changes in officers, share allotments, registered office, and registration of charges)
• Directors’ duties regarding record-keeping and compliance, and how these duties relate to acting within the constitution and advancing the success of the company
• Consequences of non-compliance (penalties, criminal liability, disqualification, administrative strike-off)
• The role of documentary obligations in corporate governance and transparency, including the public nature of the register and the option to keep certain registers on the central register at Companies House

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 (commonly referred to as a Single Alternative Inspection Location (SAIL)). The law also allows certain companies to elect to keep prescribed information on the public central register at Companies House rather than maintaining a physical register, but the obligation to keep the required information current remains. These registers are essential for transparency and must be kept up to date and available for inspection (members have broad inspection rights; others can inspect or request copies subject to proper purpose rules for the register of members).

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.

Practical points for each register:

• Register of members: must show names and addresses of members, share classes and numbers held, dates of becoming/ceasing to be a member, and any share transfers recorded once registered. It must be updated promptly, and entries for new allotments must be reflected internally and by filing a return of allotment externally where required.
• Register of directors: alongside the public register of directors (showing service addresses), companies must keep a separate internal register of directors’ usual residential addresses, which is not open to public inspection. This separation protects personal data while enabling authorities to access necessary information.
• Register of secretaries: private companies are not required to appoint a secretary, but where appointed the company must maintain the register and file appointments/terminations.
• PSC register: the company must take reasonable steps to identify PSCs, enter their details, and keep the register updated. Where PSC details are not yet confirmed or no PSC has been identified, prescribed “holding statements” must be entered (e.g. “the company has not yet completed taking reasonable steps to find any registrable PSC”). Companies must also file corresponding PSC information at Companies House. If a suspected PSC does not respond to information notices, the company can, as a last resort, place restrictions on the relevant interests (e.g. suspend share transfers or voting) until compliance.

Inspection and privacy:

• Registers must be open to inspection at the registered office or SAIL during business hours. Members may inspect without charge; others may request inspection or copies, subject to a proper purpose test for the register of members (the court can disallow improper requests).
• Special protection exists for residential addresses of directors and certain PSC information where disclosure would put individuals at serious risk; suppressed information is available only to specified public authorities.

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 enable directors to prepare annual accounts that give a true and fair view and to evidence receipts and payments, assets and liabilities, and, where applicable, statements of stock and work in progress.

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.

Adequate accounting records:

• Records must be kept at the registered office or such place as the directors think fit and be available for inspection by the directors at all times.
• Retention periods: private companies must keep accounting records for at least three years; public companies for at least six years.
• Directors must ensure the annual accounts are approved by the board and signed on behalf of the board. The accounts should include a statement of directors’ responsibilities and, where applicable, an auditor’s report.

Size-based reporting:

• Small and micro-entity companies may benefit from reduced disclosure requirements and may file simplified accounts, subject to meeting statutory thresholds. However, the accounts must still give a true and fair view and comply with applicable accounting standards for the entity size.
• Medium and large companies must prepare fuller reports and may require statutory audit, subject to audit exemption rules.

Filing Annual Accounts

Private companies must file their annual accounts at Companies House within nine months of the end of their financial year (accounting reference date). Public companies must file within six months. For first accounts, Companies House applies longer maximum periods from incorporation if the first accounting period exceeds 12 months (commonly up to 21 months for private and 18 months for public, depending on the ARD). Filing deadlines can be shortened or extended by law in exceptional circumstances, but directors should not assume extensions will be granted.

The accounts must be approved by the board and signed by a director. Late filing results in automatic civil penalties that escalate with the length of delay; persistent late filing can also result in criminal prosecution of the company and its officers in default.

Strategic and Directors’ Reports

Medium and large companies must prepare a strategic report and a directors’ report, providing information on business performance, principal risks and uncertainties, future developments, and governance matters. Quoted companies have additional obligations, such as a directors’ remuneration report and pay ratio disclosures. Small companies are exempt from the strategic report requirement and may benefit from other reduced reporting, but must still file annual accounts within the statutory timetable.

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. The “confirmation date” (review date) is the anniversary used for the filing window; the statement must be delivered within 14 days of that date.

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

The confirmation statement confirms key particulars including:

• Registered office address and, if used, SAIL
• Principal business activities (SIC codes)
• Details of directors and company secretary (if any)
• Statement of capital and shareholder information (for companies with share capital)
• PSC information and any changes during the period

Any changes not already notified by separate event-driven filings must be made before, or at the time of, filing the confirmation statement.

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. Minutes serve as the legal record of decisions and must be retained even if decisions are subsequently implemented by written resolution.

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

Retention and filing:

• Board minutes must be kept for at least ten years, as must minutes of general meetings and records of written resolutions.
• Not all resolutions are filed at Companies House. Special resolutions (and certain prescribed ordinary resolutions, such as authority to allot shares under s.551 or disapplication of pre-emption rights) must be filed within the statutory period, usually 15 days. Copies of amended articles must be filed following any alteration.

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 or SAIL
• Allotment of new shares (return of allotment)
• Changes to the PSC register
• Registration of charges within 21 days of creation
• Change of company name and adoption/amendment of articles

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.

Event-driven filings must be made promptly within the statutory timeframes. Failure to deliver required filings is a criminal offence for the company and each officer in default and can lead to civil penalties, rejection of subsequent filings, and reputational harm.

Directors’ Responsibilities for Compliance

Directors are legally responsible for ensuring that the company complies with all documentary and record-keeping obligations. This responsibility is part of the general duty to act within the company’s constitution and exercise powers for proper purposes, and the duty to advance the success of the company, which in practice requires attention to compliance, governance, and transparency. Directors must also exercise reasonable care, skill, and diligence in ensuring systems are in place to keep registers, prepare accounts, and make filings on time.

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

In practice, boards should allocate responsibility for company secretarial functions (even if no secretary is appointed) and approve clear internal procedures for:

• Updating statutory registers immediately after relevant changes
• Approving and signing accounts within the filing timetable
• Monitoring event-driven changes and filing deadlines (e.g. appointments, allotments, charges)
• Retaining minutes and resolutions for at least ten years at the registered office or SAIL

Consequences of Non-Compliance

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

• Automatic financial penalties for late filing of accounts (private companies can face civil penalties ranging from £150 to £1,500 depending on delay; penalties for public companies are higher)
• Criminal prosecution of the company and officers in default for persistent non-compliance (e.g. failure to deliver accounts or confirmation statements)
• Disqualification from acting as a director (for repeated filing breaches or serious non-compliance)
• Administrative strike-off from the register
• Civil liability to shareholders or creditors for losses caused by breach
• Reputational damage that may affect access to finance and contracts

Companies House has powers to initiate strike-off for apparent dormancy or persistent defaults. Insolvency practitioners, creditors, and courts may scrutinize record-keeping failures when assessing director conduct (e.g. in wrongful trading allegations or applications for disqualification).

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.

Worked Example 1.3

The board allots shares to a new investor but does not file the return of allotment at Companies House within one month. Internally, the register of members was updated. What are the implications?

Answer:
The allotment remains valid, but failure to deliver the return is an offence by the company and each officer in default. Companies House may impose penalties and could reject subsequent filings until the situation is remedied. The company should deliver the overdue return immediately and review its internal controls to prevent recurrence.

Worked Example 1.4

A member requests to inspect the register of members and obtain a copy of entries. The company suspects the request is for an improper purpose unrelated to rights as a member. How should the company proceed?

Answer:
Members have inspection rights, but the company may apply to court to refuse or restrict access where there is evidence of an improper purpose. The company should respond within the statutory timeframe, assess the request, and, if necessary, seek an order to prevent misuse. Refusing outright without court authority risks breaching statutory inspection requirements.

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 support market confidence, enable informed decision-making by stakeholders, and underpin enforcement of legal rights. They also help directors demonstrate compliance with their duties, provide evidence of proper decision-making, and protect the company from legal and reputational risks. For premium-listed companies, separate governance codes require clear narrative reporting on internal control and audit, which depends on robust record-keeping.

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; certain information can be kept on the central public register; PSC “holding statements” are required where details are not yet confirmed.
• Registers must be available for inspection at the registered office or a notified inspection location; inspection rights are subject to privacy protections and proper purpose rules.
• Adequate accounting records must be kept to prepare annual accounts showing a true and fair view; private companies keep records for at least three years, public companies for at least six.
• Annual accounts must be approved by the board and filed within statutory deadlines (nine months for private, six months for public); small/micro companies may benefit from reduced disclosures but must still file on time.
• The confirmation statement must be filed at least annually within the 14-day window and confirm all core company particulars, including PSC information.
• Minutes of meetings and copies of resolutions must be retained for at least ten years; special resolutions (and certain ordinary resolutions) must be filed within the statutory period.
• Event-driven filings include appointments/resignations of officers, changes to registered office, share allotments, PSC changes, and registration of charges within 21 days.
• Directors are legally responsible for compliance and should ensure effective systems for record-keeping and filings; these responsibilities align with their general duties.
• Non-compliance can result in financial penalties, criminal prosecution, disqualification, administrative strike-off, 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)