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Role of the Company Secretary

Posted: Wednesday, August 11, 2010

by James Ash
Wimpole House Company Services

If you accept appointment as a company secretary, you will become an officer of the company, sharing legal responsibilities with the directors for certain tasks required by the Companies Act. It is in everyone's interest to ensure that you are the right person for the job, and that you get adequate support in doing it.Since 6 April 2008, it has not been obligatory for a private company to appoint a company secretary, although most companies continue to do so. The company secretary is often also appointed as a director, but does not have to be.

This briefing looks at the role of the company secretary and covers:

What qualifications you need, and who can appoint you.
What your duties are, and when they have to be exercised.
How to make the most of your role.
What can go wrong, and what the consequences will be.

1. The Best Person

A company secretary is the chief administrative officer of the company, responsible along with the directors, for certain tasks under the Companies Act. You have power to enter into certain contracts on your company's behalf under the law generally, and may also have additional duties defined in your contract of employment.

1.1 You are normally appointed by the directors.

In a new company, the company secretary is automatically appointed by being named on Form 10, filed on incorporation.
You need no formal qualifications to act as company secretary to a private company.The requirements are more stringent for public companies.
You need no formal qualifications to act as company secretary to a private company.The requirements are more stringent for public companies.
Whether the company for which you are working is private or public, you must understand your obligations as an officer of the company.The Companies Act contains many requirements and around 150 offences.
In many smaller private companies, the company secretary is also a director.

1.2 Some people cannot be appointed as the company secretary. These include:

The company's auditor.
Undischarged bankrupts (unless given court leave).

1.3 The company secretary may delegate work to a third party, but remains responsible and must check and sign paperwork.

You can use a professional chartered secretary, the company's accountant (but not auditor), a solicitor or another provider of company administration services.
his typically costs between 200 and 1,000 per annum.

2. Filing Annual Returns

As company secretary, the task of filing the company documents at Companies House will normally be delegated to you.

2.1 You will have to complete and submit a standard form Annual Return to Companies House every year.

You may also need to include additional information on the form, for example on share capital and on the current directors.
The form must be returned to Companies House within 28 days of the 'return' date which must be within twelve months of the 'return date' of the last annual return.

2.2 Other documents which must be filed include:

A directors' report to the members of the company (unless your turnover is less than 6.5 million).
Financial statements, including details of the company's assets and liabilities.
An auditors' report, unless the company's turnover is less than 6.5 million (or has fixed and current assets below 3.26 million) and you are claiming an audit

2.3 The timing is prescribed by law.

The first Annual Return can be filed at any time within 12 months of incorporation. Subsequent returns must be filed at intervals of not more than 12 months.
The first annual accounts will have to be made up to a date not more than 18 months after the formation of the company.
For private companies, the accounts must then be filed within nine months of the accounting year end and the first accounts must be filed with 21 months of incorporation.

3. Further Legal Requirements

You carry much of the responsibility for maintaining the company's existence as a legal entity.

3.1 You are responsible for establishing and maintaining the company's registered office as the address for any formal communications.

The registered office must be a physical location, and not just a post office box.
It need not be the place at which the company's business is normally conducted, but you must make provision for ensuring you receive documents sent there.
The company's name must be shown outside the registered office and every other place of business.
Shareholders (and others) have the right to inspect various registers maintained by the company at the registered office or other convenient locations (see 3.2).
You must notify Companies House of any change of your registered office address, using the appropriate form.

3.2 The directors usually delegate responsibility for maintaining the company's statutory books and records to you. These should include:

A register of present and past directors and secretaries.
A register of all shareholders, past and present, and their share holdings.
A register of any charges on the company's assets.
Minutes of general meetings and board meetings.
A register of the debenture holders (typically banks).

3.3 You are normally required to ensure the security of the company's legal documents. These documents include:

The Certificate of Incorporation, recording the formation of the company.
The Memorandum and Articles of Association (the company's constitution).
Share certificates and stock transfers.
The company's seal (if it has one).
Certificates of the company's change of name (if any).
Directors' service contracts (if any).

3.4 As company secretary, you are responsible for informing Companies House, on the appropriate form, of any significant changes in the company's structure or management. For example:

Information on any new shares allotted must be notified within 28 days.
Appointments, resignations and changes (eg home address) of directors or secretaries must be notified within 14 days using Forms 288a, b and c respectively.

4. Other Responsibilities

You normally take responsibility for summoning meetings of the directors and shareholders, and for ensuring that the proceedings are properly recorded.

4.1 You must arrange a board meeting, if any director asks for one.

You must give reasonable notice to the other directors, often 14 days, otherwise the proceedings may be invalid.
You must take formal minutes, and keep them in the company's minute book.Once approved, they should be signed by the chairman of the meeting, or the chairman of the next meeting of the board. They form the only official record of the business transacted.

4.2 AGMs are no longer obligatory for most private companies, although they must hold an AGM if the company has traded shares, if a director asks for one or if 5 per cent of members request one. If there is to be an AGM:

You must send written notice to the directors and shareholders usually 21 days in advance, unless a resolution has been passed to reduce the notice period to not less than 14 days and electronic voting is available to all members.
there are any special resolutions, you must file them with Companies House.

Wimpole House Company Services offers secretarial services where they will provide any of the above services. You can appoint WHCS as your company secretary during the company formations process for as little as 100 per annum.

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