The importance of keeping company records
For many small and medium-sized enterprises (SMEs), company record-keeping can feel like a low-priority administrative task. However, maintaining accurate and up-to-date corporate records is not only central to strong governance and reducing risk, but a crucial legal obligation.
Our corporate and commercial lawyers regularly advise SMEs, directors and shareholders on their corporate responsibilities. We’re often told, “Well, there’s no need to have records of our decisions as it is just my spouse and me as directors/shareholders.” Or “We don’t have statutory books, all the information is at Companies House”.
In this blog, we outline why maintaining company records matters and how it can protect you and your business.
Why do I need to keep company records?
1. It’s a legal requirement
Under the Companies Act 2006, every company incorporated in England and Wales is required to keep specific statutory records. These include:
- Registers of members (shareholders)
- Minutes of board meetings
- Records of shareholder resolutions, minutes of general meetings and details of decisions by a sole member
- Accounting records
Failure to keep these records (and, in certain instances, make them available for inspection on request) can amount to a criminal offence for the officers of the company.
For SMEs with limited internal administrative resources, ensuring these obligations are met may seem challenging or unnecessary, but overlooking them can carry significant consequences in the future, depending on the path of your company, beyond just strict compliance with the Companies Act 2006.
New rules for company registers
The register of members (shareholders) is how a shareholder demonstrates it has legal title to shares, and is one of the most important documents a company should therefore have in place and keep up to date.
Private companies are currently able to keep the information that must be included in a register of members (shareholders) on the public register maintained at Companies House only, and not maintain a separate register. However, this is only possible where the required election has been made (which most companies we come across have not done), and this option will be removed when reforms introduced by the Economic Crime and Corporate Transparency Act 2023 come into effect.
The requirement to keep a local register of directors, register of directors’ residential addresses, register of secretaries and PSC register was removed by the ECCTA with effect from 18th November 2025. These registers are now held centrally at Companies House, with enhanced filing requirements to ensure these are accurate and up to date.
2. Strengthening corporate governance
Effective governance is vital for any business, regardless of size. For SMEs, where directors often wear multiple hats (and the lines between the individual owner and the corporate entity are often blurred in practice), clear and accurate company records help demonstrate:
- The basis on which decisions were made
- Evidence that directors have complied with their statutory duties
- Proper management of conflicts of interest
3. Essential for investment and transactions
Whilst on a day-to-day basis, the keeping of corporate records may not seem important, if you are seeking investment, planning to bring in additional shareholders or preparing for a company sale, the company records will form a key part of any due diligence process.
Potential buyers and investors will expect to see:
- Complete and up-to-date statutory registers
- Minutes evidencing major decisions
- Filings made on time and accurately at Companies House
Incomplete records can delay a transaction whilst errors are rectified and give the impression of poor management, which can impact perceptions of risk and perhaps even the value realised.
4. Reducing risk
Company records serve as the legal evidence of how your business has been run. They help demonstrate that decisions were properly considered and authorised correctly and in accordance with:
- The company’s articles
- Statutory duties
- Any shareholder agreements
In the event of a regulatory query or legal dispute, well-maintained records significantly strengthen the company’s position, and the directors must be mindful at all times of their duties. This becomes even more important if a company is in financial distress, where, in a worst-case scenario, an insolvency practitioner may pore over historical records and examine actions taken, particularly around dividends paid to shareholders or loans from the company to directors.
How Barcan and Kirby can help
Our Corporate and Commercial and Commercial Litigation teams advise SMEs, directors and shareholders on governance, compliance and corporate structure.
We can:
- Review and update your statutory registers
- Conduct a ‘health check’ of your corporate records
- Assist with board minutes, resolutions and company filings
- Provide ongoing governance support
- Advise on shareholder disputes and director disputes
- Support with restructuring, investment rounds or company sales
Get in touch with our corporate lawyers
If you’re unsure whether your company records meet the required standard, we’re here to help. Call us on 0117 325 2929 or fill out our enquiry form and we will be in touch.
