The role of the company secretary has transitioned from being known as an administrative support to becoming one of the key governance positions with considerable influence within an organisation. The company secretary role continues to evolve as regulation continues to increase and regulators become tougher.
The company secretary is the critical conduit between the board, its shareholders and Companies House and ensures that the Company is directed and controlled in accordance with a set of policies, procedures, processes and rules.
Company secretaries have legal responsibilities for certain tasks that are required by The Companies Act 2006 such as corporate governance framework, shareholder communication, statutory compliance, general administration and other UK rules and regulations.
There are potential liabilities of the company secretary. Although they may not be a director, as an officer of the Company, the company secretary can still be held liable for breach of duty in the same way as members of the board and they owe a duty to act in good faith and in the best interests of the Company. A number of provisions within The Companies Act 2006 set out that where there is a failure to file or comply, ‘an offence is committed by every officer of the Company who is in default’.
Where the company secretary is the person with leading responsibility for the task undertaken, they will be the sole person in default and could be liable to a fine so it is important that delegation of tasks by the company secretary be directed to a competent person(s).
The duties of the company secretary can vary depending on the size of the organisation. Typically, such duties would include:
Maintenance of Statutory Registers/Co-ordination of Inspection of Registers
-register of members
-register of directors and officers
-register of directors’ residential addresses
-register of charges
-records of directors/shareholders meetings/resolutions
-register of interests in shares (public companies only)
-register of people with significant control (“PSC”)
The statutory registers are normally kept at the Company’s registered office address or at a single alternate inspection location (“SAIL”). If using a SAIL address, the company secretary must make necessary filings with Companies House.
The company secretary should be aware of the information contained in each register and ensure they are always kept up to date. For example, if the register of members is not updated this may cause serious consequences as a shareholder is only allowed to vote if that shareholder’s name is included in the register of members.
The company secretary is also responsible for ensuring that requests made by members of the Company (as well as the general public) to inspect certain statutory registers is completed within the required time limits.
It would be their duty to co-ordinate such requests and to be familiar with the procedural requirements as well as which registers are open to the public and the fee to charge for complying with such requests. Failure to comply with requests to inspect the registers within the timeframe may put the company secretary at risk to a fine.
Filings at Companies House
Under the Companies Act 2006, certain information is required to be filed at Companies House including:
-alterations to the articles of association
-details of directors, secretaries and people with significant control
-significant changes in company share capital including transfer of shares
-resolutions passed by members
-registration of charges
The company secretary is responsible for ensuring all filings are made at Companies House within the required time limits. This is imperative, for example should the Company grant a charge to a third party, if this is not filed by the company secretary at Companies House within 21 days, the charge will become void against the liquidator, creditor of the Company. Therefore, the role of the company secretary is vital in ensuring that companies registered with the Registrar of Companies comply with UK company law.
Assistance in relation to board and shareholder meetings and related paperwork
Company secretaries also have administrative responsibilities where they follow best practice in respect of the organisation of meetings of the directors and shareholders, circulation of agendas and other documentation within the required time limits, as well as producing accurate minutes of shareholder and directors’ meetings and resolutions.
The procedures and document requirements for calling general meetings/passing written resolutions of shareholders are rigid and the company secretary should be aware of the requirements to ensure that the company complies with all the legal procedures. Failure to comply could invalidate the business of the meeting.
Company Secretary who is also registered as a director of the company
Should you be appointed as both the Company Secretary and a director of a company, it is important to be aware whether you are acting as the secretary or a director for each task being undertaken.
Importantly, where an act is required to be done by a director and the secretary (for example, signing a document), it is not possible for one person to sign in his or her respective capacities as director and secretary, unless that person is the sole director and also the sole secretary of the company.
Written by a member of Dominion’s London Corporate Services Team
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