3.6 Obligations of registration

Once registered, a society must keep proper accounts, submit an annual return to the FCA, and let the FCA know of any change relating to its registered office. It must also apply to the FCA to amend any of its rules or to change its name. Amendments are not valid until they are registered and approved by the FCA. Societies are legally obliged to be run strictly in accordance with their registered rules, and to inform the FCA if they no longer wish to be registered.

Registered societies are required to make annual returns to the FCA. There is a standard form that should be completed by the society’s secretary and returned to the FCA within seven months of the society’s financial year end. The form must be accompanied by a set of accounts. The form must be accompanied by a set of accounts. There is now an online filing portal for annual returns and uploading annual accounts, as well as for submitting other documents and changes societies may wish to make (www.societyportal.fca.org.uk).   

On 6 April 2018 a new regulatory Order introduced new audit thresholds for societies.  If the turnover of the society exceeds £10.2m (or £250,000 if the society has charitable objects), or its assets exceed £5.1m, these accounts must be subjected to a full professional audit. This also applies to any society that is a subsidiary, any society that has subsidiaries, or any society engaged in deposit-taking activities. Where a society has one or more subsidiaries it must produce audited consolidated group accounts, or provide a reason to the FCA why group accounts are not required, subject to the FCA’s approval. 

Societies with a turnover not exceeding £10.2m, or assets not exceeding £5.1m, can, if their rules permit it, and a resolution has been passed at their AGM, get exemption from a full professional audit, and instead submit an accountant’s report verifying the accounts. Unaudited accounts, verified by the management committee, can be submitted if the turnover does not exceed £90,000. If the society’s turnover and assets are below £5,000, and it has fewer than 500 members, then it can resolve to submit a lay audit, verified by someone who is not a management committee member or officer of the society.

Societies must maintain an up-to-date register of members and officers. The members’ register must include the member’s postal address, electronic address (if provided), shareholding and any other property held in the society, and the date of joining and leaving membership. Members have the right to inspect a duplicate copy of this register, excluding details of the members’ shareholding and property in the society.  The officers’ register must include details of the offices held and the dates they took (and left) office. Unlike with companies, societies are not required to file these registers with their registrar. Societies must also keep records of any nomination of beneficiaries by members, in the event of their death. This detail could be incorporated into the members’ register. 

In Scotland, charitable community benefit societies must comply with the requirements of both the FCA and with the Scottish Charity Regulator’s monitoring arrangements, which includes the submission of annual accounts (see www.oscr.org.uk/charities/managing-your-charity/annual-monitoring). The Scottish Charity Regulator operates a consent and notification regime which charitable community benefit societies should make themselves familiar with. This includes seeking consent to change their name or purposes. (see www.oscr.org.uk/charities/managing-your-charity/making-changes-to-your-charity)

If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at communityshares@uk.coop