The quantity and variety of records that a limited company must keep to remain compliant with Companies House and HMRC requirements can be overwhelming even for experienced business owners. Thankfully, the following article outlines exactly what records must be kept, where they should be kept, and for how long.
Which Records Do I need to Keep?
Documents relating to the legal entity:
– Certificate of Incorporation
– Share certificates
Documents relating to company officers:
– Contracts relating to purchase of own shares
– Directors’ indemnities – security against liability claims or legal costs
– Directors’ service contracts
– Documents relating to the redemption or purchase of own shares out of capital by private company
– Instruments creating charges and register of charges. For example, mortgages or secured loans.
– Records of resolutions and minutes of meetings
– Register of Directors
– Register of Members (shareholders/guarantors)
– Register of Secretaries
The following accounting records must also be kept:
– All company assets, liabilities, and credits
– All types of income and expenditure
– Business and VAT records (If VAT registered)
– Company goods and services bought and sold
– Details of those from whom goods and services were purchased and sold (excluding retail sales)
– Inventory of all stock and assets owned at the end of each financial year
– Pay-As-You-Earn (PAYE) records (employer-registered companies only)
– The stock reductions used to calculate the inventory figures
Where Should I Keep My Records?
When a company is incorporated Companies House will by default assume that all records and registered will be stored at the company’s registered office address.
If it is not possible to hold the records at the company’s registered office address it is possible to register a separate address as the Single Alternative Inspection Location (SAIL) address. You must inform Companies House when any documents are held at the SAIL address and detail exactly records are being held there. This information must also be confirmed when your annual confirmation statement is filed.
How Long Do I Need to Keep My Records?
Company registers must be kept permanently whilst records of accounts must be maintained for at least six years from the end of the relative financial year. Minutes of meetings and company resolutions should be kept for at least 10 years from the date of the relative meeting per The Companies Act 2006.
Most limited company records can be maintained digitally however the following records must be kept in their original form:
– Bank interest certificates
– Construction Industry Scheme (CIS)
– Dividend vouchers
Who can Inspect my Records?
Companies are required to make their records available to be inspected on any working day. The public are entitled to inspect a company’s statutory records so long as it is for a “proper purpose”.
Any person who wants to inspect a company’s register of members or PSCs must state in the request their name and address, whether the information will be disclosed to any other person and, crucially, the purpose for which the information is to be used.
A minimum of 2 days’ notice is required if the requested inspection date coincides with the notice period of a general meeting of the shareholders, or a written members’ resolution. In all other cases, the required notice period is 10 working days.
What If I do not adhere to the record keeping requirements?
Failure to adhere to the record-keeping requirements constitutes an offence by both the company and the company officers. The level of fine or punishment differs depending on the requirement being broken:
Requests made for a “proper purpose” must be met within five working days or else risk the penalty of a fine under Section 118 of The Companies Act 2006. The company will receive a fine not exceeding level 3 (maximum £1000), and for continued contravention, a daily default fine not exceeding one-tenth of level 3.
Failure to keep records required to be held in their original form may constitute a fine of up to £3000 by HMRC.
Under the statutory regulations in Part 21A of The Companies Act, failure to comply with information duties can result in imprisonment for a term not exceeding two years or a fine (or both).
If you have any queries relating to your company’s record-keeping compliance please contact us online or give us a call on 028 9055 9955. If required, we can provide you with the required company registers to keep you on track.