Make your company 'due diligence ready': UK secretarial basics for founders

Understanding Your Company Secretarial Responsibilities for UK Startups

For early-stage founders in the UK, company secretarial duties can feel like a distraction from the real work of building a product and finding customers. It's often treated as an administrative task to be dealt with later, managed ad-hoc via spreadsheets and scattered documents. However, establishing good corporate governance from day one is not just about compliance; it's about building a solid, fundable foundation. When investors conduct due diligence, they are not just evaluating your pitch deck; they are scrutinising the legal and administrative health of your company. Getting these company secretarial responsibilities for UK startups right from the start prevents costly, time-consuming clean-up exercises down the line and signals to potential partners that you are building a professional and durable organisation.

The 'Single Source of Truth': Why Your Internal Records Matter Most

What is the ‘single source of truth’ for your company’s ownership and governance? Many founders assume it’s the information publicly available on Companies House. This is a common and critical misunderstanding. The definitive legal record of your company is its internal statutory books, also known as the statutory registers. While you must file information at Companies House, those filings are merely a public reflection of what is held in your private registers.

Think of it this way: your statutory registers are the master document, and Companies House is a public summary. If there is a discrepancy between the two, the internal registers are legally paramount. This is why maintaining company records accurately is a fundamental director responsibility. An error discovered during a funding round, such as a shareholder not being properly recorded in the Register of Members, can delay or even jeopardise the entire deal. These records are the ultimate evidence of who owns shares, who the directors are, and who holds significant control.

Your Statutory Registers Explained: The Core of Good Governance

Your statutory registers are the core record of your company's structure and history. They must be kept meticulously up-to-date, as they are the first thing investors' lawyers will ask to see during due diligence. Inaccurate or incomplete registers are a major red flag. The key registers you must maintain include:

The Register of Members (Shareholders)

This is the definitive list of your shareholders and legal proof of ownership. It must detail who owns which shares, the amount paid (or to be paid) for them, and the date they became a member. While a cap table spreadsheet is a useful working tool for modelling dilution, the Register of Members is the legally binding document. Every time a share is issued or transferred, this register must be updated immediately to reflect the change.

The Register of Directors

This register lists all current and past directors of the company. For each director, you must record their full name, service address (which can be the company's registered office), country of residence, nationality, date of birth, and business occupation. It must also show the dates of their appointment and, if applicable, their termination. Keeping this accurate ensures clarity on who has the authority to make decisions on behalf of the company.

The Register of PSCs (People with Significant Control)

This register identifies the individuals who ultimately own or control your company. According to the Companies Act 2006, "A Person with Significant Control (PSC) is anyone who holds >25% of shares or voting rights, or has other significant influence." For example, if two co-founders start a SaaS company and each holds 50% of the shares, both are PSCs and must be recorded. This register requires specific details, including the nature of their control, and must be kept current. For a summary of related duties, see these company secretaries' core responsibilities.

Documenting Decisions: What Makes Board Minutes 'Due Diligence Ready'?

Properly documented decisions provide the narrative of your company's development and prove that directors are fulfilling their legal duties. This is what makes board minutes 'due diligence ready'. They are not just formalities; they are the legal evidence that key decisions, such as issuing new shares, taking on a loan, or approving a key contract, were made correctly and with proper authority.

For a document to withstand scrutiny, it should clearly record:

• The date of the meeting or resolution.
• Who was present (the attendees).
• The key points of discussion and the rationale behind decisions.
• The specific decisions made, recorded in clear, unambiguous language.
• Any conflicts of interest declared by directors.

The reality for most pre-seed startups is more pragmatic: you may not be holding formal board meetings. In these cases, written resolutions signed by all eligible directors or shareholders are a perfectly valid and efficient way to document decisions. As you grow towards Series A and have a more formal board with non-executive directors, the expectation for detailed, formal board minutes will increase significantly. Whether using formal minutes or a written resolution, the goal is the same: create a clear, contemporaneous audit trail of your company's governance.

Staying Compliant: The Rhythm of Companies House Filings

Missing Companies House filing deadlines can lead to penalties, the company being struck off, and it signals poor administration to outsiders. To stay on top of your obligations, it helps to understand the difference between event-driven versus time-based filings.

Time-Based Filings: The Annual Requirements

These are the core annual compliance tasks every UK company must complete. Diarising these dates is essential.

1. The Confirmation Statement (CS01): This filing confirms that the information Companies House holds about your company is correct at a specific point in time. It covers details like directors, PSCs, and your registered office address. "The Confirmation Statement (CS01) is due one year after incorporation or the last statement date" (Companies House).
2. Annual Accounts: This is a financial summary of your company's performance over its financial year. For private limited companies, "Annual Accounts are due 9 months after a company's financial year-end" (Companies House). Filing late has direct financial consequences, as "Late filing penalties for Annual Accounts start at £150 and increase based on the delay" (Companies House).

Event-Driven Filings: Responding to Change

These filings are triggered by specific corporate actions. They are often time-sensitive and must be filed within a strict deadline after the event occurs.

• Share Allotment (SH01): After you raise a funding round or issue shares to an employee, you must report it. "A form SH01 for issuing new shares must be filed within one month of the allotment" (Companies House). This is a frequently missed deadline for busy founders.
• Director and Secretary Changes (AP01, TM01, CH01): When you appoint a new director (AP01), terminate an appointment (TM01), or change a director's details like their service address (CH01), you must notify Companies House within 14 days.
• Registered Office Change (AD01): If you change your company's registered office address, you must file a form AD01. This can be done online and takes effect when Companies House registers the form.

Key Takeaways for Building a Fundable Company

Managing your company secretarial responsibilities does not need to be overwhelming. By focusing on a few core principles from the start, you can build a strong foundation for growth and future fundraising.

First, establish and maintain your statutory registers as the single source of truth for your company's structure. Do not rely on Companies House as your master record. Update your registers immediately after any change, not just when a filing is due.

Second, create a clear audit trail of major decisions through board minutes or written resolutions. This discipline prevents future disputes and will be invaluable during any due diligence process.

Finally, diarise your key time-based filing deadlines and understand the triggers for event-driven filings. Acknowledging these simple but essential tasks is a key part of good governance and is fundamental to building a clean, fundable company from day one.

Frequently Asked Questions

Q: What is the difference between a cap table and the Register of Members?
A: A cap table is a working spreadsheet used to model ownership percentages and dilution, which is essential for financial planning. The Register of Members is the official, legally binding document that serves as the definitive legal record of who owns the company's shares. While your cap table should reflect the register, the register is legally paramount.

Q: Do I need to hire a professional company secretary as a UK startup?
A: Private limited companies in the UK are no longer legally required to appoint a company secretary. However, the responsibilities still exist and fall to the directors. Many founders manage these tasks themselves initially, but as the company grows, they may hire a professional firm or individual to ensure compliance and good governance.

Q: How do I fix historical errors in my company records?
A: Fixing historical errors often involves a "clean-up" or "rectification" process. This may include passing board and shareholder resolutions to ratify past actions, updating the statutory registers to correct the information, and making corrective filings at Companies House. It is best to seek legal advice to ensure the process is done correctly.