Companies Act 2006 - Register of members

[karenw80]

Morning all. It'd be great if someone can help with my query.

We requested a copy of our company register two weeks ago but none has been forthcoming which, under Cl 118, means that an offence has been committed by the company and by every officer who is in default.

Further, that a person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 and that the court may compel the company to comply with the request.

What procedure do we have to follow to hold the company and its officers to account in respect of this default?

 

[fisicx]

Engage a solicitor to act on your behalf. Let them determine the best procedure.

Do some research on this topic and you will soon realise it’s complex and you may not even be granted access.

 

[karenw80]

Thanks.
Yes, we intend to speak with a solicitor tomorrow but I thought someone on here might be knowledgable, or even have experience, of such a procedure.

 

[fisicx]

There is no one procedure. It all depends on the company and your reason for making the request. The chances of this ever ending up in court is very slim. And even if you did get access to the register you probably won’t get the information you seek.

 

[Ozzy]

We requested a copy of our company register two weeks ago but none has been forthcoming

I obviously don't know your involvement in the company, you say "our company" so if you're a director of the company then you could be equally liable for a register not being maintained or made available.

Do you know if the register is not being made available under the rights for the company to make a filing to not hand over the register on the terms the request is not being made for proper purpose?

In a nutshell yes you should be able to see it, and no it is extremely unlikely that any legal proceedings would come of this delay. If the company feels the question is not being made for proper purpose then they can apply for you to not be granted access to the register.
Very few companies maintain their registers properly, practically none end up being fined for it. Yes they should be properly maintained, our solicitor maintains ours for us.

 

[WaveJumper]

Are we dealing with a 'company" or some form of association / club. I also believe that it can also be an offence for a person knowingly or recklessly to make a request under section so I would strongly recommend you take the advice above and seek out some proper legal advice on this action and the best way forward.

 

[Gyumri]

I would write, or email or telephone to follow up on your request before assuming the worst and then see where the issue lies. There might be an innocent explanation.

 

[karenw80]

Thanks for all the replies. I thought I'd wait until we'd spoken to a solicitor before responding.
I'm just back from that meeting.

I would write, or email or telephone to follow up on your request before assuming the worst and then see where the issue lies. There might be an innocent explanation.

Good idea.
We had a reply yesterday within the hour. That reply was simply confirmation that our formal request had been received.

They appear not to have acted on it as is required. Pretty stupid really because it means they've committed an offence.

118 Register of members: refusal of inspection or default in providing copy
(1) If an inspection required under section 116 (register of members: right to inspect and require
copy) is refused or default is made in providing a copy required under that section, otherwise than
in accordance with an order of the court, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(2) A person guilty of an offence under this section is liable on summary conviction to a fine not
exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not
exceeding one-tenth of level 3 on the standard scale.
(3) In the case of any such refusal or default the court may by order compel an immediate on or, as
the case may be, direct that the copy required be sent to the person
requesting it.

 

[karenw80]

Are we dealing with a 'company" or some form of association / club. I also believe that it can also be an offence for a person knowingly or recklessly to make a request under section so I would strongly recommend you take the advice above and seek out some proper legal advice on this action and the best way forward.

It's a social club and a company. We have over 700 members.

 

[karenw80]

I obviously don't know your involvement in the company, you say "our company" so if you're a director of the company then you could be equally liable for a register not being maintained or made available.

Do you know if the register is not being made available under the rights for the company to make a filing to not hand over the register on the terms the request is not being made for proper purpose?

In a nutshell yes you should be able to see it, and no it is extremely unlikely that any legal proceedings would come of this delay. If the company feels the question is not being made for proper purpose then they can apply for you to not be granted access to the register.
Very few companies maintain their registers properly, practically none end up being fined for it. Yes they should be properly maintained, our solicitor maintains ours for us.

I'm a member.
We have no idea why they've not complied with our request.
They've neither provided a copy of the register nor applied to the court which puts them in default meaning they have committed an offence. They're really very silly to have just ignored the request.

 

[fisicx]

@karenw80 - why do want to see the register? Do you have a legitimate reason. It’s possible they have not allowed you access because they do not feel your reasons are valid.

The chances of anything happening are virtually zero. You could get sufficient support to call an EGM but even then you may not get what you want as the register could have been withdrawn or amended.

Why do you want to see the register?

 

[karenw80]

why do want to see the register? Do you have a legitimate reason. It’s possible they have not allowed you access because they do not feel your reasons are valid.

Our request for a copy of the Register was submitted in full compliance with Cl 116 which included stating the purpose for which the information was to be used. That purpose, for the time being, will be between us and the company.

If the company viewed our stated purpose for requesting the information was improper they should have applied to the court within five working days. They didn't.

It's not for the company to decide whether or not the stated purpose was a proper purpose its for the court to decide. That is clear.

 

[The Resolver]

Can you gather support from the holders of 5% of the membership? If so you can force the directors to hold a meeting of all members and to distribute a written statement beforehand. . In the statement and at that meeting you can notify all members that the company is liable for refusal to provide the Register so will lbe fined . That reduces club funds. .

 

[fisicx]

@karenw80 - I’m working with someone right now who has even more issues with the directors. They refuse point blank to even comply with court directives and are willing to bankrupt the sports club in legal fees. Unless you have the support of other members and financial clout to mount a legal challenge I fear you aren’t going to win this one.

 

[The Resolver]

But if Karen can indeed generate a majority of members then legal action is not required invthat with a majority in support she can remove the directors and replace. It requires lobbying. Maybe thats why the Register is required. I have just succeeded in doing that for clients in a members club company.

 

[fisicx]

It’s getting that majority support where it can be a struggle. The sports club I’m helping have some very bullying directors and very few of the members want to cause trouble. They know about the legal action (bills in tens of thousands) but still voted them back in at the AGM. Maybe they need your help.

 

[karenw80]

My initial query was in respect of the directors' failure to comply with the requirements of Cl 118 which, automatically, renders them all as having committed an offence.

What procedure do we have to follow to hold the company and its officers to account in respect of this default?

Having spoken to a solicitor that query's been answered. It's to apply to a magistrates’ court to bring a private prosecution. Of course that costs money so we'll be considering our options.

@fisicx

I’m working with someone right now who has even more issues with the directors. They refuse point blank to even comply with court directives

They refuse point blank to even comply with court directives? Wow, that's crazy.
What court directives are they refusing to comply with?

 

[Gyumri]

It's a social club and a company. We have over 700 members.

I doubt that the members of the social club are also members of the company unless they each own a share of the company ie., they are also shareholders. In which case they will be listed at companies house on the last confirmation statement that shows the shareholders?

 

[fisicx]

They refuse point blank to even comply with court directives? Wow, that's crazy.
What court directives are they refusing to comply with?

Can’t discuss the details here but is all about misconduct.

The court can order a director to do something but they can appeal. This is why it could well cost you a lot over many years. In the cast of the club I’m working with bills are heading towards £50,000. All paid for by the club. Member’s money.

 

[fisicx]

I doubt that the members of the social club are also members of the company unless they each own a share of the company ie., they are also shareholders. In which case they will be listed at companies house on the last confirmation statement that shows the shareholders?

Many clubs of this sort issue a single share to each member. Shareholders don’t have to be listed at companies house.

 

[The Resolver]

I doubt that the members of the social club are also members of the company unless they each own a share of the company ie., they are also shareholders. In which case they will be listed at companies house on the last confirmation statement that shows the shareholders?

The common arrangement, if its not a Registered Society under the Co-operative and Community Benefit Societies Act 2014 , then the club is likely run by a company limited by guarantee. Such a company does not have shareholders but members. Members have similar rights as shareholders in a limited liability company.. They are not to be confused with people who take out membership to be able to access the premises and facilities.

.

 

[Gyumri]

Shareholders don’t have to be listed at companies house.

Isn't that what the confirmation statement is for? The changes need to be notified if there are any in the shareholdings. The shareholders are Listed on the confirmation statement at least for the companies I'm looking at.

 

[Gyumri]

I’m working with bills are heading towards £50,000. All paid for by the club. Member’s money.

It would surely be a lot cheaper just to disclose the members register which would normally be overseen by the company Secretary. Perhaps that issue is just the tip of the iceberg.

 

[fisicx]

Isn't that what the confirmation statement is for? The changes need to be notified if there are any in the shareholdings. The shareholders are Listed on the confirmation statement at least for the companies I'm looking at.

A confirmation statement doesn't have to include shareholder information:

Filing your company's confirmation statement

What the confirmation statement is and how to send your statement to Companies House.

www.gov.uk

The company register is a totally different thing and doesn't need to be a public record.

It would surely be a lot cheaper just to disclose the members register which would normally be overseen by the company Secretary. Perhaps that issue is just the tip of the iceberg.

This case isn't about the company register. My point was that legal action can be expensive and drawn out if the directors choose to be awkward.

 

[Gyumri]

"The confirmation statement has an additional information section. You can complete this if there have been changes to your:
statement of capital"

• trading status of shares
• shareholder information

 

[Gyumri]

My point was that legal action can be expensive

You're quite right but the point of the thread is that the directors are dragging their feet about disclosing the register of members.

 

[Gyumri]

The company register is a totally different thing and doesn't need to be a public record.

Your right. A company can elect not to file a register of members or even directors at companies house. So much for transparency.

 

[fisicx]

"The confirmation statement has an additional information section. You can complete this if there have been changes to your:
statement of capital"

• trading status of shares
• shareholder information

The operative word is ‘can’. It’s not required.

You're quite right but the point of the thread is that the directors are dragging their feet about disclosing the register of members.

Yes. But the only way to force compliance is legal action. Which the OP needs to decide if they can afford.

 

[Chris Ashdown]

How does the list access comply with the GDPR presumably you are looking for names and address or contact details
Also we assume that the list would be on a computer file, but that may not be the case and unrealistic to copy 700 files if say a card index (even if unlikely these days)
They could also believe that you are trying to market their member to another club

 

[fisicx]

@Chris Ashdown - the 700 members aren’t listed on the document so there is no GDPR issue. The register is simply a written record of the company details and directors. Doesn’t have to be made public. If you want to see the record you make a request and can go see it at the company offices.

 

[WaveJumper]

Interesting just reading up on this and it would seem if they don't want to handover the info as they feel the reason is not justified and then you take them to court and the judge agrees with the company you are going to be liable for all the costs (no legal expert) but as others I think have already indicated this could quite easily get very expensive

Companies Act 2006

An Act to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other forms of business organisation; to make provision about directors' disqualification, business names, auditors and actuaries; to amend Part 9...

www.legislation.gov.uk

 

[karenw80]

This thread is solely about the Register of members as described in the Companies Act 2006, not the confirmation statement nor anything else.

113 Register of members
(1) Every company must keep a register of its members.
(2) There must be entered in the register—
(a) the names and addresses of the members,
(b) the date on which each person was registered as a member, and
(c) the date at which any person ceased to be a member.

Further,
121 Removal of entries relating to former members
An entry relating to a former member of the company may be removed from the register after the expiration of ten years from the date on which he ceased to be a member.

 

[karenw80]

Interesting just reading up on this and it would seem if they don't want to handover the info as they feel the reason is not justified and then you take them to court and the judge agrees with the company you are going to be liable for all the costs (no legal expert) but as others I think have already indicated this could quite easily get very expensive

The scenario you describe is incorrect. If you read through the thread you will see why.
I repeat:
Our request for a copy of the Register was submitted in full compliance with Cl 116 which included stating the purpose for which the information was to be used. That purpose, for the time being, will be between us and the company.
If the company viewed our stated purpose for requesting the information was improper they should have applied to the court within five working days. They didn't.
It's not for the company to decide whether or not the stated purpose was a proper purpose its for the court to decide. That is clear.

That is why they have now committed an offence, by failing to either provide the requested register or apply to the court within 5 working days.

 

[WaveJumper]

The scenario you describe is incorrect. If you read through the thread you will see why.
I repeat:
Our request for a copy of the Register was submitted in full compliance with Cl 116 which included stating the purpose for which the information was to be used. That purpose, for the time being, will be between us and the company.
If the company viewed our stated purpose for requesting the information was improper they should have applied to the court within five working days. They didn't.
It's not for the company to decide whether or not the stated purpose was a proper purpose its for the court to decide. That is clear.

That is why they have now committed an offence, by failing to either provide the requested register or apply to the court within 5 working days.

Yes correct so whats you next move going to be to force their hand

 

[karenw80]

As stated earlier:
Having spoken to a solicitor that query's been answered. It's to apply to a magistrates’ court to bring a private prosecution. Of course that costs money so we'll be considering our options.

A non leagal option is to publicise to other members that their directors have deliberately broken the law and committed an offence for which the club and the individuals can be convicted and fined. I suppose I mean, try to embarrass them into acting properly.

 

[fisicx]

You can do that. But will most club members really care that you haven’t had access to the register?

Note for the uninformed: members of the club are not the same as members of the company. Two different things.

 

[The Resolver]

As I said above if you can gather the support of 5% of the members (35) you can issue notice on the Directors requiring them to call a meeting of all members to discuss the situation and a resolution - you could also include, with the appropriate longer (28 day) notice a meeting to change the Board/Committee members. You then of course need 51%+ to pass the Resolution.

If you are worried that they will just ignore the law again and not call the meeting Companies Act gives you the power, should they not call the meeting to call it yourseves at the expense of the company. Of course therein lies the problem if you do not have the maling list to issue the notices to.

I would focus not on litigation but generating support for your point of view through social media, leafletting members etc

 

[Gyumri]

The first point to understand is presumably we are dealing with a social club run by a company limited by guarantee where the M&A dictates the how the company is run. The 700 "members" are presumably only members of the club and not the incorporated company so the register of members is likely to consist of just a few of the original subscribers if they're still alive.

I can't see otherwise how a club or society can be run with 700 members each having a share limited by guarantee.

The company hasn't done anything wrong if it believes that the purpose of the request to see the register is not for a proper purpose.

 

[Chris Ashdown]

@Chris Ashdown - the 700 members aren’t listed on the document so there is no GDPR issue. The register is simply a written record of the company details and directors. Doesn’t have to be made public. If you want to see the record you make a request and can go see it at the company offices.

I don't think that's the information he is seeking.

 

[The Resolver]

700 is a bit unwieldy I agree but I have handled over 200 in one case. They do not hold shares. If the company members, ax opposed to club members, are indeed a small number then all the easier to seek a supporting majority.

We need a lot more detail. Karen - you are welcome to book yourself into a free advice call through the link in my sig below