By law every company must maintain a physical register containing certain information about it and its directors and shareholders. However, a change in the rules means that soon this might not be necessary. Changes to the rules in 2015 and 2016 mean that companies are now required to keep and report more information about their directors and shareholders. Much of this also has to be held on a company register, which should be kept up to date with changes such as the appointment of a new director. However, We know in practice this often doesn’t happen.
Registers are ignored
In our experience many companies, particularly smaller ones, fail to keep their registers up to date. Often it will sit in the corner or a shelve, or in the bottom of a draw gathering dust or the company will pay its accountant £50 a year to hold on to it. Not keeping a register up to date could land directors with a fine from Companies House, and while this is unlikely to be enforced the threat is always there.
Changes must be notified
Regardless of the state of their physical registers most companies keep the central register, the online database kept by Companies House up to date with statutory information, e.g. appointments and resignations of directors and shareholders. Companies House keeps this information in digital format for anyone to access online free of charge.
Switching to the central register
In June 2016 changes to company law will take effect to allow most companies to abandon the physical register and instead just maintain Companies House central version. this might alleviate any guilt you have about leaving the physical register to gather dust and rot. However, you’re not entirely off the hook.
You can’t throw away the old register. you must keep it just in case anyone asks to check it.
Election needed
Before you can abandon the physical register in favour of Companies House’s central one, all your company’s shareholders must agree. So you’ll need a signed statement from each of them to that effect. The next step is to send the statement plus an election to Companies House notifying it of the intension to switch to the central register only.
If you decide to switch to the central register you will need to take the physical register and attach to it a copy of the shareholder’s agreement plus a copy of the election, for any reason, you want to revert back to using the physical register you can just withdraw the election. New companies, i.e. those set up after the new rules take effect, will be allowed to skip ever having to maintain a physical register by making an election immediately at formation.