Company secretary
CA2006 specified that a private company is not required to have a secretary however a public company must have one
A private company may continue to appoint a company secretary if it so wishes
The directors of a public company have a duty to take all reasonable steps to ensure that the secretary of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary to the company and has a qualification, such as being a member of a professional body such as ICSA
In many offshore jurisdictions it is still a requirement that private companies appoint a company secretary
It is common for professional service providers to appoint one of their in-house subsidiary companies as the corporate secretary of companies which they administer for their clients, alternatively CSPs may elect a member of staff to act in this capacity
In the majority of offshore jurisdictions it is unlikely that they are any statutory provisions referring to the appointment of the company secretary and it is usually the articles of the company that will provide for this appointment and which also determines the powers and functions or duties of the company secretary
The board of directors must bear the responsibility for selecting a suitable person who is of reasonable experience, integrity and competence
Where a private company appoints a secretary then the secretary's particulars must be placed on public record and the secretary will have the same status in relation to the company as the secretary of a public company
Role of company secretary
The company secretary is said to have an ostensible authority (an apparent authority because of position held) on behalf of a company to enter into contracts which are of na administrative nature
If the secretary has express authority (in writing) from the board, they may enter into contracts of both an administrative and managerial nature on behalf of the company and the company will be bound by their acts
When the secretary has no express authority, their ostensible authority will allow them to enter into contracts of an administrative nature on behalf of the company and the company will be bound by such acts
If the company secretary acts beyond their ostensible authority and without an express authority, the position appears to be that the company will be bound by their acts but the secretary may be held personally liable by the company for any resultant loss
The company secretary should be able to advise, guide and warn the directors of the danger of disqualification and possible personal liability. They must be a competent and reliable person and must be able to assist the directors in carrying out their duties
It is common for the company secretary to have considerable managerial responsibilities within a company. A company secretary can be described as forming the backbone of the company
Qualifications of secretary of public company
CA2006 imposes a duty on the directors to ensure that the secretary of the company is a person who appears to them to have the requisite experience and knowledge and to fulfil the role who has one or more of the following qualifications
have held the office of secretary of a public company for at least three of the five years preceding their appointment as secretary
are a member of a profession body such as ICSA and ICAEW or another accountancy body authorised in the UK
are a barrister, advocate or solicitor called or admitted in any part of the UK
are a person who, by virtue of their holding or having held any other position or they being a member of any other body appears to the directors to be capable of discharging the functions of secretary of the company
Register of secretaries
CA2006 states that a company must keep a register of its secretaries
In the case of an individual the register must contain the following particulars
Full name and any former name
Full address
Date of appointment
Date of resignation
In the case of a corporate secretary, the register must contain the following particulars
Full name of company
Full registered office address
Date of appointment
Date of resignation
The register must be kept at the company's registered office or if kept at another place the company must give notice to the local Company Registrar of the place
Must be open to inspection by any member of the company without charge and by any other person on payment of such fee as may be prescribed
In some jurisdictions it is a requirement to notify the Company Registrar of any change in secretary. Offshore administrators will need to ensure that they check the relevant laws of any company that they administer to ensure that they do not fall foul of such requirements.
Liability
The secretary is also an office of the company and as such is liable to various penalties incurred if they fail to comply with the requirements of CA2006
Duty of the secretary to draw the director's attention to any action which is required to be taken and they may be liable for damages resulting form any negligence, default, breach of duty or of trust
Court can relieve a company secretary from liability for negligence, default, breach of duty or breach of trust. If it appears to the court hearing the case that the officer is or may be liable but that acted honestly and reasonably they ought fairly to be excused, the court may relieve them either wholly or in part from their liability
Duties
Generally the duty of the secretary to ensure that the board of directors act in accordance with company legislation and the company's constitution
The secretary should act on the instructions of the director in the filing of all formal returns as required by CA2006 and maintaining the prescribed registers and records, as well as the minute book, notices of GMs and the company's report and financial statements
The relationship of the secretary to the board of directors and to the individual directors will vary according to the size of the company and whether the directors hold executive or non executive office
The secretary will provide guidance to the board on all points of governance, the company's legislation and any changes
May assist with the induction of newly appointed directors and may also assist with their professional development as and when required
Must be able to carry out their duties in a satisfactory manner without being biased towards any one director as they are ultimately responsible for the performance of most of the duties imposed by CA2006 which are generally delegated to them by the directors
May include
Registrar functions including maintenance of statutory registers of the company and the issuance of share certificates
To file certain documents with the Registrar of Companies, eg annual return
Co-ordinate and attend meetings of the directors and of the company
Preparation of meeting agendas and notices for meetings and preparation of minutes after a meeting of members or directors. This could include advising on and coordinating the preparation of member's circulars, financial statements and other reports
Ensuring that the meetings of the company are quorate and conducted in accordance with CA2006 and the articles of association
Ensure the company meets the requirements of CA2006 and any other relevant requirements for example, those of the stock exchange
Providing independent advice to the board on any governance matters
Facilitating the flow of information to the board and NEDs (if appointed)
Entering into contracts of an administrative nature (as authorised by the board), on behalf of the company, such as taking on staff, ordering machinery and stationery
Signing on behalf of the company
Counter signing/witness the affixing of the seal of the company
Issuing share certificates to the members of the company
Powers
Has the power to complete their duties
Power to witness and countersign every document to which the company has affixed its seal
Included on the authorised signatory list and can or provably will validate all documents executed by the company and sign correspondence on behalf of the company