📣CALLING ALL ACCOUNTANTS
“Why do lawyers have such an obsession with statutory books?” 🙄 We heard an accountant say during due diligence.
Well, we do understand the sentiment. We dislike them too. Everything is at Companies House right? 🤔 No.
Legally, a person does not hold the legal title in the shares until it’s written in the company books. “But the transferor signed the stock transfer form?” 🖊️ Beneficial ownership in the shares passes at that point. They may have even signed a power attorney giving the buyer voting rights etc until the stock transfer form comes back stamped and can then be added to the members register. If that never gets written up, arguably legal title has not passed and there could be arguments. 😤
Also, if the company books are written up incorrectly and need rectifying, this may require court intervention, from the Companies Court…in London. So, they should be kept up to date with any changes as they happen to avoid inaccuracies down the line.
So please, all accountants, we implore you. Complete the statutory books every transfer or allotment. It’s not just about gearing up for a sale, it’s about avoiding disputes during the life of the company too. It’s also a legal requirement.
It’s not just lawyers wanting MORE documents. If they’re not updated, there could be an argument a person is not the legal owner which is usually a fundamental warranty given by a seller.
Everyone makes sure they register land transfers at the land registry, please ensure you register share transfers in the statutory books. 🙏
#accountants #legaladvice #companybooks #sharetransfer #shareallotment
