What is the Role of the Company Secretary?

All UK public companies require a company secretary by law, under the Companies Act.

Private limited companies however are not required to appoint a company secretary, however the directors may still choose to do so, as there can be many practical benefits to the organisation of having a dedicated individual in this role.

Many important tasks can be taken on via the role of the company secretary, such as shareholder admin and comms, corporate governance and statutory compliance.

If the company does not appoint somebody to the role of company secretary, the responsibility for the completion of those tasks falls with the directors. Due to this burden, many companies choose to appoint a company secretary to ensure that directors can focus on adding value rather than being tied up in administrative tasks.

 

Who can take on the role of company secretary?

 

For PLCs, the company secretary is a legal requirement in PLCs and the person should be a member a recognised accountancy body, a chartered secretary or have previous experience as a secretary in a PLC.

The role of a company secretary can be held by an individual, director or shareholder, another company or organisation, an accountant or lawyer, or a chartered secretary. However, legally, the company secretary may not be the company auditor, a disqualified director, or a person who has been declared bankrupt.

Although there is nothing to stop a director from also holding the role of the company secretary, there is not a great deal to be gained in practice from a director also being the secretary as the person in the role is usually appointed to reduce the workload of directors. Also, legal documents that require two or more signatures cannot be signed by the same person acting as both company secretary and director. A shareholder can also be appointed to the role of company secretary, but they must be older than 16 years of age, and the same legal rules apply to that appointment.

Individuals with exceptional attention to detail, administrative experience and knowledge of the legal aspects of incorporating and running a business are generally stronger candidates.

For smaller companies, there is also the option to delegate excess work to 3rd parties, although the responsibility for that work still lies with the company secretary. You can use a professional chartered secretary, the company’s accountant (but not auditor), a solicitor or another provider of company administration services.

 

Company secretary duties

 

The following are the typical tasks taken on by this individual:

 

Filing Companies House and confirmation statements (what were once called annual returns):

The secretary is usually responsible for filing confirmation statements, including directors’ accounts, company audits and any other statutory statements that must be submitted at the end of the financial year.

Keeping the books up-to-date:

With a potential penalty of £5000, it is crucial that companies keep all statutory book and registers up to date. Due to the administrative nature of this task, this normally falls the company secretary to complete.

Scheduling meetings for shareholders and directors:

Board meetings, annual general meetings and meetings to update shareholders are all generally scheduled by the company secretary. They are also usually responsible for the distribution of supporting information, the planning of meeting agendas and the taking of meeting notes.
 
Updating Companies House on changes to company details:

Any changes to the company details such as director or shareholder information, newly allocated shares, or the resignation of directors must be sent to Companies House. This task usually falls within the role of the company secretary.

Maintaining the registered company address:

It is a legal requirement to have the registered company address and registration number on all stationary, and to keep Companies House updated with any changes. The company secretary can also add directors’ names to the stationary, but if they wish to do so, they must legally include all directors.

The handling of legal matters:

he role of the company secretary includes having good knowledge of the company’s articles of amendment alongside the Companies Act 2006 to ensure that they are able to effectively deal with any legal requirements or disputes within the business.

Legal company document security:

The memorandum, articles of association, certificate of incorporation, and share certificates should all be kept securely, and this responsibility normally falls with the company secretary.

Shareholder communication:

Usually, the company secretary is the first point of contact for shareholders within the business. All meeting arrangements, changes and new appointments should be communicated to the shareholders by the person in this role.
 
Signing legal documents on behalf of the company:

There is a chance that the company secretary will often be asked to sign legal documentation on behalf of the company’s directors. It is important that the company secretary checks which documents he or she can sign on appointment, as the liability in this case still falls with the directors.

Annual General Meetings

Annual general meetings are no longer compulsory for limited companies, unless otherwise stated in the articles of association. If the articles state that the company must hold an AGM, the first meeting must be held within 18 months of the formation of the business, with following meetings held annually no longer than 15 months apart.

Depending on how immersed in the business the company secretary is, they might take on other responsibilities such as:

a. PAYE and payroll

b. VAT issues

c. Business insurance

d. Pensions

e. Communication with accountants and lawyers

 

Are company secretaries paid?

 

Company secretaries are paid a salary dependant on experience, location and the sector the company operates within. Company secretaries in larger firms such as those within the FTSE 100 can be paid six figure salaries alongside large bonuses.

In many companies, the role may be taken on in addition to other tasks by another person within the business.

 

What are the legal duties of the role of a company secretary?

 

In a private company, if a company secretary fails in his or her duties, the directors may be held responsible as, ultimately, legal responsibility falls upon the them and not the secretary. Directors have responsibility for the delegation of tasks to the secretary, and can appoint or remove a secretary at will.

Under the Companies Act, the company secretary shares various responsibilities alongside the directors of the business, which may also have legal ramifications. Those responsibilities include:

 

a. There are penalties associated with the late filing of accounts and submission of confirmation statements

b. Directors can be personally prosecuted and fined, and the company secretary’s actions can lead to this if they fail to adhere to legal requirements

c. In some instances, the company can be struck from the register and this can be a costly administrative and legal process to have the company name restored, further adding to the company secretary’s duties

d. Directors normally turn to the company secretary for advice on legal matters, matters relating to the articles of association, contractual agreements and accounts queries
As a company secretary, you might be asked to sign legal documents on the behalf of directors

e. Company secretaries are often involved in discussions and negotiations with 3rd party providers, such as legal professionals and accountants

f. In private companies, primary legal responsibility lies with the company’s directors.

 

However, it is still possible that secretaries may be held jointly responsible with directors for failure to complete legal tasks and requirements, which could result in fines or prosecution for all individuals involved.

This does not include the filing of company accounts for which the directors are solely accountable.