Monday, 24 March 2014

Record keeping can be simplified

Small businesses struggling to keep up with time-consuming admin will be relieved to hear it can be kept to a minimum.

Tina Chander, from our employment law team, said keeping accurate company records was vital in order to stay on the right side of the law.

“You need to keep statutory records of course, but it’s about knowing what’s essential and how to keep on top of things with as little of your precious time taken up as possible.”

Tina said The Companies Act 2006 set out the rules for exactly what information every company needed to keep.

“You’ll need a register of members/shareholders, a list of directors and company secretaries, details of anyone who has a right over assets of the company such as a bank, minutes of directors’ and shareholders’ meetings, and accounts. And if you don’t keep proper records, as a director of the company you will be held personally responsible, so it’s important to know where you stand.”

Tina said for anyone who was the sole director and shareholder of a company, records were just something that had to be dealt with.

“But if there are other people involved, the importance of your company records is greater, as you may need to rely on them if a dispute ever occurs. Minutes of your board meetings will prove beyond a shadow of a doubt what was agreed, and so the records will protect you – this is something to take into consideration even if you don’t believe you are ever likely to disagree with your fellow directors.”

Tina said anyone who detested dealing with paperwork, or who was just too busy to find the time to keep the records up-to-date, could look at alternative arrangements.

“You can now use free or cost-effective software that will guide you through your record keeping electronically, which will reduce the time it takes, and which also ensures your records are in the right format. Or you could appoint an external company to handle your requirements, although this of course will be at an extra cost, but you might decide it’s worth it to have one less thing to worry about.”