After setting up a company for your accountancy company, you must keep and maintain certain business records and company information for relevant authorities such as HMRC and the wider public. Under the Companies Act 2006 (‘the Act’), company records are defined as any index, register, agreement, accounting record, minute, memorandum of any other document the Act requires to be maintained by a company and any register it keeps of its debenture holders. UK companies must therefore keep a variety of records that can be used to collect company data. In this article we outline how types of records a company must keep, in what form and for how long for your accountancy company.
A Certificate of Incorporation is proof that a company is registered with Companies House under the relevant law. The certificate, also known as the birth certificate of a company, will be sent to the business owners following a successful company registration. The certificate will also contain information such as the company number, the type of company that has been set up (for example a private limited company), the location of the company (for example England and Wales) and the date of incorporation.
A Memorandum of Association is a document affirming your intention to form a accountancy company and to become its members on formation. Your accountancy company must have Articles of Association (‘Articles’) that contain its constitutional rules and act as your personal and internal rulebook.
You must ensure that you keep records of both of these. Given that your Articles outline how processes are to be carried out it is not only a legal requirement to have copies but it is prudent to do so.
If your company structure involves share capital, you will also have share certificates that certify the date upon which a certain person becomes the registered owner of shares in the company. You must keep records of these certificates in order to show ownership.
You must also keep documents which relate to the company using its capital to redeem or purchase shares in itself as well as any contracts that relate to the purchase of its own shares.
You must also keep records of the members (shareholders or guarantors in limited companies) of your accountancy company so that they can be identified. You must also keep a register of company directors and the directors’ service contracts as well a register of company secretaries if your accountancy company has one. You should also store any of the Directors’ indemnities, such as security against liability claims or legal costs. You also need to keep records of PSC as they, like officers of the company, will be on the register of members on the public record on gov.uk.
You are required to keep minutes of all board and general meetings that occur. These materials should outline what was discussed in the meetings and provide for justification of the decisions taken.
You should also ensure that you keep a register of any holders of debentures and a register of charges such as secured loans or mortgages your accountancy company holds.
Companies are also required to keep certain accounting records for: all forms of income and expense; services and goods bought and sold by the company, and; an inventory of assets and stocks every financial year with explanations.
These records of company accounts, along with the business bank account statements help prepare the company’s annual accounts and annual returns for tax return purposes, VAT (of which there should also be records) and in order to calculate corporation tax.
If you have registered your accountancy company as an employer, you must also ensure you store and maintain all PAYE records relating to your employees. These records are important to calculate the amount of National Insurance Contributions, annual PAYE returns and to ensure that the employer is paying their employees in line with laws and regulations.
Company records can be stored as hard copies or in electronic forms. If the latter is chosen, it must be possible for hard copies of the electronically stored records to be replicated. Generally speaking, records must be kept at the company’s registered office. However, if this is inconvenient, the company can make records available and keep some of them at a single alternative inspection location (SAIL), provided Companies House has been notified of any statutory records kept here.
When filing your annual confirmation statement, you must disclose the location of your records.
Company registers should be kept for the company’s entire life. Accounting records must be kept for at least 6 years from the end of the relevant accounting period or financial year. Documents such as minutes of meetings and company resolutions must be stored for at least 10 years from their creation.
These records can be stored digitally or electronically, with a few exceptions. Original dividend vouchers, bank interest certificates, and Construction Industry Scheme (CIS) vouchers must be kept.
If you fail to keep your records as instructed HMRC can fine you up to £3,000.
Statutory records must be available to inspect on any given working day. Members of the public, where they have a ‘proper purpose’ can ask to inspect the company’s statutory records and these requests must be met within 5 working days in order to avoid a fine.
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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.