A key element of effective corporate governance will always be the keeping of appropriate company records. However, a balance must be struck between complying with legal requirements and not getting bogged down with red tape, to the expense of everyday business operations. It begs the question of what the bare minimum requirements are for company records.

As a company director, you will want to focus on making your business a success, rather than having to spend time on record keeping. However, there is a minimum level of statutory records that must be kept, making it important to determine what is essential so as to only spend minimal time and effort in this area.

Under the Companies Act 2006, all companies are required to keep a register of members, such as shareholders, as well as a register of directors and company secretaries, if they have one. Also necessary is a register of charges, which can consist of details of persons or organisations, such as a bank, with rights over a company’s assets, usually as security. Your company will also be required to keeping accounting records and minutes of directors’ and shareholders’ meetings and resolutions.

However, while it is your responsibility as a director to ensure the keeping of proper company records, not doing so doesn’t attract any financial penalties from Companies House (CH), HMRC or other government agencies, and accounting records aside, these bodies are also unlikely to inspect the statutory records of small private companies. This might lead one to ask whether such record keeping is needed at all.

Indeed, keeping company records is simply a necessary evil if you are a company’s sole director and shareholder. But you may want to rely on such records at a later date for example in the event of insolvency or a dispute with a fellow director over remuneration levels, where, in the absence of minutes of board meetings, you won’t be able to prove beyond doubt what was agreed. Simply depending on continued good relations with your colleagues is insufficient, given that even the most harmonious boardrooms tend to run into dispute from time to time.

This is where company secretarial firms like London Registrars can be invaluable. Our highly experienced and capable company secretaries can handle your statutory records on your behalf, even processing your company’s annual return, so that you are left with no worries about this area of corporate governance.