Record Keeping After Company Registration

Following your company registration there are a number of obligations and filings to Companies House that you are required to complete

. Many of these do not occur immediately following formation but action may be needed from an early stage in your companys life.

The company records are used in the preparation of the annual accounts, a compulsory filing responsibility for all limited companies. As a legal requirement, it is important that these accounts are filed accurately to represent the companys position. This highlights the vital importance of precise record-keeping on a regular basis.

The basic record-keeping obligation for companies is to document their day-to-day transactions after the date of company registration. Even in the event that a company is dormant, meaning not trading, they are still required to keep these records. This includes expenditure relating to incorporation, for example money from the transactions of shareholders from the beginning. The records produced must be enough to show a true and fair view of the companys financial position. This enables the directors to ensure that any statutory annual accounts comply with legal requirements.

Although there is a necessity to keep financial records, the nature of these is not specified in the guidelines. Simply, a company is required to record all day-to-day expenditure and receipts of trading. In addition, they must document all of their assets and liabilities, including stock at the end of the year if the company deals in goods. Except for goods sold by way of ordinary retail trade, the accounting records of a company which deals in goods must also contain a statement of all the goods sold and purchased, identifying the goods, buyers and sellers in each case.

Financial records must be kept at the companys registered office address, or another address that has been agreed as suitable by the directors. The documents for a limited company after company registration must be retained for at least three years, according to the Companies Act 2006. However, it is possible that records should be kept for a longer period than this for corporation tax purposes, normally a minimum of six years.

The accounting records must be available for inspection by the companys officers at any time after company registration. A common mistake is the belief that this is also the case for shareholders, who do not have an entitlement to inspect the records. If the accounting records are kept outside the UK, accounts and returns with respect to the business must also be kept at a place within the UK. Those accounts and returns must disclose, with reasonable accuracy, the financial position of the business in question at intervals of no more than six months. They must also be sufficient to enable the directors to ensure that any statutory accounts are prepared in accordance with the legal requirements.

It is a criminal offence, for which the directors are responsible, if a company does not keep sufficient accounting records. This includes not keeping the records in the correct, agreed place and may cause the director to be liable to a fine and/or imprisonment unless they can show that they acted honestly and that, in the circumstances of the companys business, the default was excusable.

by: John Bregar

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