Corporate Governance for SMEs: Why compliance matters
By Amy Kafetz, Founder Adaptable Legal Counsel
When I started my own business, one of my key concerns was protecting my personal address. I needed to pick a registered address service that not only kept my home address off the public register but also ensured that my company’s statutory registers would be accessible for public inspection. If you use a registered address agent and the agent can’t make these records available, or your registered address doesn’t have the ability to facilitate inspections of your registers, you may need to list a SAIL address (Single Alternative Inspection Location). However, if you pick your home address, this could expose your personal address to the public domain via Companies House.
It’s important to note that some statutory registers, such as your company’s directors and PSCs (People with Significant Control), may be available on Companies House. However, private registers like directors’ residential addresses and the register of members (shareholders) are usually not publicly available. For privacy reasons, you may not want this sensitive information made public, so it’s essential to select a trustworthy registered address agent. Ensure they can store your records digitally and make them available for inspection when required.
If you need guidance on selecting the right registered address service, please reach out for more information.
Who can inspect your records?
Anyone with a legitimate interest, for example shareholders, creditors, or the public, can inspect your statutory registers. You must provide access to these records in a timely manner, usually within five working days of a request. The registers include information on your directors, members (shareholders), and PSCs. Failing to make them available can result in penalties.
What are the fines for non-compliance?
If you fail to comply with your obligations under the Companies Act 2006, such as not providing access to statutory registers, you could face fines ranging from £200 to £5,000. More serious violations, such as not maintaining accurate records, may lead to larger penalties, legal consequences, or even director disqualification.
New financial penalties under the ECCTA 2023
With the Economic Crime and Corporate Transparency Act (ECCTA) 2023, Companies House has gained more powers to enforce compliance. From 2024 onwards, the registrar can impose fines of up to £10,000 for violations deemed fraudulent under the Companies Act, as an alternative to criminal prosecution. This means companies must ensure all records are accurate and up-to-date to avoid severe consequences.
Additionally, Companies House has raised its filing fees to fund these enforcement measures showing an intention to make sure enforcement funds are available. For example, digital incorporations now cost £50 (up from £12), and services like name changes and share capital reductions have also seen increases. These changes reflect the registrar’s expanded role in monitoring and ensuring company compliance.
What Corporate Governance requirements can we help with?
At Adaptable Legal Counsel, we understand that navigating corporate governance can be overwhelming for SMEs and SMBs. That’s why we offer flexible legal services to help you comply with key requirements, such as:
Board/Shareholder Meetings & Minutes: Helping ensure your meetings are properly called, run, and documented with minutes recorded and filed.
Resolutions: We can draft and circulate both board and shareholder resolutions to ensure they are correctly handled and filed.
Updating Statutory Registers: We can assist with keeping your registers of members, directors, and PSCs up-to-date which is crucial for compliance.
Companies House Filings: We help with filing confirmation statements, annual returns, and other essential documents.
Our cost-effective legal solutions are designed to keep your business compliant without the heavy fees associated with traditional law firms.
What is Adaptable Legal Counsel?
Adaptable Legal Counsel offers a flexible, affordable alternative to traditional law firms. Leveraging changes in regulation, we provide flexible legal solutions tailored to the needs of SMEs and SMBs, ensuring you only pay for the support you need. We also offer legal overflow support, providing flexible resources for in-house legal teams facing heavy workloads or complex projects.
Who am I?
I’m a qualified solicitor in England and Wales with a law degree from the University of Southampton and an LPC LLM from the University of Law. After starting my career at Panasonic and later working as legal counsel at RX, part of the FTSE 100 RELX Group, I now provide flexible legal support through my consultancy. With government-issued hourly rates for lawyers of my level between £190 and £233, you can get me for a full day at the cost you may pay for just 2-3 hours on the billable rate model.
How to get in touch
For more information, visit www.adaptablelegalcounsel.co.uk or email me at amy@adaptablelegalcounsel.co.uk.
For a free consultation, fill out this link: Free Consultation, and I’ll be in touch to arrange a time to speak.
