What is a register of members?
As a company owner or director, you are responsible for maintaining certain statutory registers. One of the most important registers to keep up to date is the register of members. If your company issues shares, the register of members is also known as the register of shareholders.
Before the advancements of modern technology, companies would keep all of their statutory registers in paper form, usually a a single bound book or loose-leaf binder for example. However, keeping electronic records is just as acceptable and can be a lot easier to update. As long as the register of members can be printed off and put into a hard copy, then you will be fine.
What needs to be listed in a register of members?
The register or members, or register of shareholders, is a record of the individuals who own the company and the details of the shares they hold. You should ensure that your register of members includes the following information:
- The name of each member / shareholder
- The contact address for each member / shareholder
- The number and classes or types of share held by each shareholder
- The amount paid or agreed to be paid on each share
- The date that each shareholder became a member of the company
- The date each shareholder ceased to be a member of the company (where applicable)
To make it easier to find information, some companies will also record other details about members alongside the register, such as contact details etc. While this may prove to be convenient for admin purposes, you need to take care with what extra information you record on the register. Each shareholder or member has the right to view the register of members, so it may not be very appropriate for them to see personal details about other members listed on the register.
Who should or shouldn’t be listed on the register of members?
Obviously, this is a statutory register of your company members /shareholders, so you should list every single individual who holds shares. Even when a corporate body holds shares within your company, their company details should also be listed.
Having said this, there are certain rules about who should and should not be listed as a member:
If company shares are being held in a nominee account, then the register should only list the name of the nominee and not the actual name of the beneficial owner.
Trusts, pension schemes or settlements do not have any legal capacity, so therefore it is usual for most of the trustees to be listed on the register as the registered shareholders.
A normal unincorporated partnership holding shares cannot be listed as shareholders, but a registered limited liability partnership has its own legal identity, so therefore can be a registered shareholder and be listed as such in the register.
If you have joint holders of shares, they can be recorded, but each name would have to be entered on the register separately, but only one address needs to be recorded.
Holders of a public office can be registered.
Should a company decide to hold its own treasury shares, it should be included in the register of members.
Unexercised share options should not be listed on the register of shareholders.
Does the number of members you have affect things?
If you have just one member or over fifty members, there are particular requirements for companies to take on-board.
For a company with just one single member, your members register must include this information as an extra note. The note will have to be amended of course in the future as and when you gain more members, but should a company that starts off with more members reduce down to a single member company at any time, a note detailing this must be added.
When a company has over fifty members, your index of names of members should be maintained and amended as numbers go up or down. Having a separate index will be useful for your paper register-of-members, but one will not be needed if you already keep it in an indexed form, such as an electronic shareholders list that is sorted alphabetically by name.
Your register-of-members is normally held at your company’s registered office address, and Companies House will assume your register will be kept there at all times, unless you inform them otherwise. You can arrange for your register-of-members to be made available for inspection somewhere else. This is known as a Single Alternative Inspection Location, or SAIL for short.
Who is responsible for maintaining the register of members?
The responsibility of keeping an up to date register of members falls to the company’s officers. This basically means the company directors and the company secretary, if one exists. The task of keeping the register up to date may be quite simple, especially where there are very few shareholders involved. It may never need to be updated should there be no change whatsoever.
The task of updating and maintaining a register of members really only becomes more demanding should your company have lots of shareholders. A close eye should be kept on the record should your company shares be transferred frequently. For much larger companies it can often be easier to outsource the job to a specialist company to act as a registrar. This would help to ease the burden of having to constantly update your register, however this may come at a costly price and you would have to be careful to choose a registrar with a proven track record and good customer feedback. This is an important statutory register so should be handled correctly.
How often should we update the register of members?
You will record your first entries into the register of members when your company is first incorporated. This will include details of the subscriber shareholders and the shares taken.
Once you are up and running you should swiftly update your register of members when any of the following occurs:
- Should shares ever pass from one person to another, whether by a normal share transfer or
- transmission on the death of a shareholder
- When a shareholder changes their address
- When a shareholder changes their name
- Your company issues new shares to a new or existing shareholder
- Your company’s shares are reorganised, such as on a share split, share redemption, share consolidation, cancellation of shares, conversion of shares etc.
Should someone cease to be a shareholder, their name will remain on the register of members but a note will be recorded alongside with the date they ceased to be a member. The name of the former shareholder will remain on the register of members for ten years after the date they ceased being a shareholder. After this date their name can be removed from the register.
You do not have to report each and every update or change on the register of members to Companies House immediately. However, certain changes do need to be notified such as share allotments, share splits and share consolidations. There are forms to be filed with Companies House for this and you will also need to update your register of members.
While regular share transfers do not need to be filed with Companies House, most of the details recorded in your members register will need to be included on your next annual Confirmation Statement.
Your register of members is your primary source of who holds shares in your company. It is a requirement of the Companies Act 2006, that you keep your register of members up to date. Failure to do so can see your company officers facing a fine.
Your register of members can be inspected by all shareholders and others can also make a request to view it. If any inaccuracies are found it could make your company look disorganised and your shareholders could swiftly lose faith and trust in your company and about how well it is being managed.