Myth busting - the elusive statutory book and stock transfer form

Some clients have received advice that statutory books are not required for private companies and stock transfer forms (“STF”) are a thing of the past… however, this simply isn’t true!

Statutory books can be hard copy or electronic and are required by the Companies Act 2006 to provide information on company members, directors, secretaries, directors’ interests and charges.  The company should also record minutes and resolutions of board/shareholder meetings, which should be retained for a minimum of 10 years.  Failure to produce the statutory books if requested could incur fines up to £1,000 for the register of members and £5,000 for each of the registers of directors and charges.  Failure to notify the Registrar of changes to the secretary and failure of a director declaring an interest in a transaction could also incur liability of up to £5,000 each!  The register of members is the primary authority on the shareholders of the company and the register can only be updated once a completed STF has been received, on which stamp duty has been paid (if applicable), making the STF invaluable.

We have acted on the sale of numerous companies without statutory books where there have been issues, uncertainty, increased legal fees and the reconstitution of the statutory books.  If you are thinking of selling your company and this sounds familiar, you may wish to act now to avoid delays.