What Business Records Do I Need To Keep As A Company Director?
When you’re the director of a company, there are legal responsibilities you must adhere to. One such responsibility is record keeping for the company.
There are two types of records you must keep:
- Records about the company
- Records of accounting and finances
Part of this responsibility involves keeping the records for a certain time after the financial year ends. So let’s look at which records you need to keep and how long you need to keep them.
What records need to be kept about the company?
When you keep records about the company, they should be kept at the company's registered office. You should inform Companies House if they are kept at a different location.
Now you know where you’re keeping the records, let’s look at what records you’re keeping there.
You need to keep records pertaining to:
- Directors, shareholders and company secretaries
- Results of any shareholder votes and resolutions
- Loan repayment promise dates and who the loan must be paid back to
- Promises the company makes for payments if something goes wrong that is the fault of the company
- Share buying transactions
- Loans or mortgages secured against the company’s assets
As well as these, you will need to keep a record of people with significant control.
Register of people with significant control
The people of significant control (PSC) register needs to contain details of anyone in the company who:
- Has more than 25% voting rights
- Can appoint and remove a majority of directors
- Can influence or control the company
If there are no people of significant control, you will still need to keep a record of this.
What accounting records need to be kept?
If you fail to keep your accounting records, you can be fined £3,000 by HMRC. Alternatively, they can also disqualify you as a company director.
Given the serious repercussions that can happen, it’s important that you get this right. So let’s take a look at which records you need to keep.
You need to keep records of:
- All money received and spent by the company
- Details of assets owned by the comp
- Details of all debts, both those owed by the company and owed to the company
- Stock owned by the company at the end of the financial year
- Stocktakings used to work out the stock figure
- All goods bought and sold
- Who you purchased from and sold to (unless you run a retail business)
In addition, you will need to keep records, information and calculations you need to prepare and file your annual accounts and Company Tax Return.
These additional records include:
- All money spent by the company, including petty cash books, orders and delivery notes
- All money received by the company, including invoices, contracts, sales books and till rolls
- Any other relevant documents, for example, bank statements
How long should I be keeping these records?
You must keep these records for at least 6 years from the end of the financial period they relate to.
Additionally, you may need to keep them longer if one of the following applies:
- They show a transaction that covers more than one accounting period
- The company has bought something that is expected to last more than 6 years, like equipment or machinery
- You submitted your Company Tax Return late
- HMRC has started a compliance check into your Company Tax Return
There are a lot of things to consider when it comes to keeping records for your company, such as where you are going to keep them and how you are going to keep them.
While it might seem like a pointless effort, you need to keep them in case HMRC investigates you. So make sure they are kept as accurate as possible.
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