The Companies Act 2009 requires every company to keep and maintain certain records. • Company records • Share register; and • Accounting records.
Note: Many small businesses choose to have their accountant, solicitor or business advisor hold and maintain these records for them.
What are the main record keeping obligations of a company?
A company must keep a share register that records the shares issued by the company and states:
• In alphabetical order, the names, last known address and the number of shares held by shareholders over the previous 7 years
• Details of any share issues, repurchases, redemptions or transfers of shares.
The share register must be able to tell the story of who, in the last 7 years has owned what shares and how any change in ownership of the shares has happened.
A share register is very important to the shareholder because it is proof that the shareholder actual owns legal title to their shares.
An agent may maintain the share register on behalf of the company.
A company must keep a variety of documents at its registered office, including the company rules, minutes of meetings of shareholders and directors for 7 years, accounting records, copies of communications to shareholders and the share register.
The directors of a company must keep accounting records which:
• correctly record and explain the transactions of the company,
• allow at any time, the financial position of the company to be determined with reasonable accuracy,
• enable the directors to ensure that the company complies with the Companies Act and regulations, and
• will enable the financial statements to be readily and properly audited.
The annual return contains the basic details about the company such as shareholder and director details. In return for benefitting from having a company structure, the government requires companies to make certain information available to the public and to keep that information up to date. Submitting this document ensures that the most up to date company details are made available to the public.
The company registrar will allocate each company a month of the year when it must submit an annual return to the Registrar. The annual return must be in the prescribed form, signed by a director, legal practitioner or chartered accountant, and any fee must be paid within the prescribed time limit, otherwise late charges may apply.
Immediately after the registration of the company, a company must issue to any person named in the application as a shareholder, the number of shares specified in the application. Further shares may then be issued in accordance with the company’s rules, or if all shareholder approve of the issue.
Any issue of shares, including the first issue, must be notified to the registrar within 10 working days of the issue.
In certain circumstances, namely, that the company is solvent, a company may purchase its own shares or may redeem shares. A company is solvent when it is able to pay its debts as and when they fall due, and where the value of the company’s assets is not less than its liabilities.
Making distributions to shareholders
Except in the case of community companies, the directors of a company may authorize a distribution by the company at any time, of any amount, to any shareholder it sees fit. However, the company must be solvent after the proposed distribution.
No distributions may be made to shareholders for community companies.
Company charges and security interests
Under the old companies legislation, companies had to maintain a register of charges. This is no longer applicable under the new Companies Act. Company charges over moveable property are now registrable on the Secured Transactions Filing Office website.
Security interests over moveable property, such as secured loans, leases or hire purchases, can also be searched for in the online Office.
Filing of documents
As noted above, some of this information must also be recorded and maintained with Company Haus. Interaction with Company Haus is predominantly through the use of online services. For the small number of instances where there is no online service available, there are forms available for filing documents at Company Haus.