There are at least two important reasons for maintaining corporate records: to comply with the company's obligations under the UK Companies Act 2006 (the "Act"), including the records being available for inspection and to be well-prepared for a potential investment or acquisition.
Taking the latter reason first, when your start-up needs capital or is looking to exit, potential investors and buyers will want to see everything and know everything about your company since its inception. By maintaining accurate corporate records, you can show potential investors or buyers a clear picture of the company’s actions and ownership. Corporate records are also required to back up the key warranties the company will give on an investment or the key employee shareholders will give on any exit, ensuring that the warranties are true, accurate and complete.
With regard to the company's obligations under the Act, to the extent the company fails to comply with its record keeping obligations, the directors who are in default will be deemed to have committed an offence.
Learn More: