The shareholders of a company are commonly recorded in two main locations; the public register at Companies House and the internal register of members held by the company as part of its records.
Historically, anyone looking to the public register for a detailed breakdown of the number, and holders, of shares in the company could obtain this information through the latest filed Annual Return. However, as the Annual Return was filed annually, it may not always have been an up-to-date and accurate record. If the company issued any new shares, there was a requirement to file details at Companies House. However, in the event of a share transfer, Companies House would not be notified until the next Annual Return, which could be several months away.
From 30 June 2016, the Annual Return was replaced with the Confirmation Statement. While the Confirmation Statement must be filed at least once a year, it can be updated regularly through each relevant 12-month period. This is intended to help keep the public register up-to-date and more accurate.
How does this affect you? Well, it might impact in a few ways, including:
- More regular updates; you will need to notify Companies House if the shareholding in your company changes for any reason (e.g. for both newly issued and transferred shares).
- No standard list of shareholders; the Confirmation Statement, unlike the Annual Return, will not always contain a list of shareholders because (except in respect of first time filing) it records changes only. This means, for example, that if you are looking into a company whose shareholders have remained constant for some time, a list of shareholders will not be readily available in the last filed Confirmation Statement. Instead, it will be necessary to look back over previously filed paperwork to identify who were the last known shareholders, who are treated as still being the current shareholders by the fact no change has been recorded by the Confirmation Statement. This might be relevant when conducting research on customers or suppliers, or if you are considering a potential acquisition of another company.
- Transparency; you can opt to keep your company’s register of members on the public register, rather than maintaining it internally. This puts more information into the public domain (including additional shareholder information) and gives greater transparency to the company.
- Cancellation of shares; if your company buys back any of its shares (or if there is a forfeiture or surrender of shares) it will be necessary to issue a statement of capital to be filed at Companies House.