Private limited companies are not legally required to appoint a company secretary. Although there is no obligation to have one, we’ll explore the reasons why it’s worthwhile appointing a secretary for your private limited company.
We’ll also highlight a company secretary’s key roles and responsibilities and advise how to find a suitable candidate to take up this position.
Does my company need a secretary?
When forming your company, you’ll have the option to appoint a secretary for your private limited company. However, there has been no legal requirement to do so since the introduction of the Companies Act 2006 (the “Act”). Before the introduction of the Act, companies still had to have a secretary appointed at all times.
Specifically, section 270 of the Act provides that no secretary is required. It also explains that in the case of a private company without a secretary, relevant duties are to be undertaken by the company itself, a director, or a person authorised generally or specifically on behalf of the directors.
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A private limited company may still choose to include a provision within its articles of association that specifically requires the appointment of a secretary. If such a provision is in place, then a secretary must be appointed at all times, regardless of what the Act says.
However, if the company is incorporated under Model articles (the default articles prescribed by the Act), then there is no requirement to do so.
Unlike private companies, public limited companies (PLCs) must have at least one secretary. They also need to have at least two directors and one shareholder.
It is not possible to remove the requirement for a PLC to have a secretary appointed at all times. Furthermore, the secretary appointed must be suitably qualified, with the required qualifications being set out in section 273 of the Act.
Benefits of appointing a company secretary
A company secretary holds a vital position in a business and there are many benefits of appointing one in a private limited company. Firstly, they have a broad skillset, covering areas like corporate law, finance, and governance. This means they can provide professional and legal support to the business, making sure it remains compliant and follows lawful procedures at all times.
Secondly, secretaries are generally responsible for ongoing obligations such as legal record keeping and reporting changes to Companies House. These can be time-consuming and strenuous tasks (and costly if using external services), especially for a single-director business.
A company secretary can take on some of the above director’s duties and act on behalf of the board. This helps to alleviate a lot of the pressure and ensures efficient and compliant administration.
Finally, as well as maintaining legal and statutory compliance, secretaries are instrumental in the growth of the company. They bring crucial expertise and knowledge that can help identify new opportunities and guide a new business through the start-up phase into an established organisation.
A company secretary’s roles and responsibilities
As a company secretary is not legally required in a private limited company, the Companies Act 2006 does not set out any specific duties of this role. However, they typically include the following:
Maintaining statutory records
Limited companies must update and look after their statutory records. This includes documents like the Certificate of Incorporation, the articles of association, share certificates, and the Register of People with Significant Control.
In the absence of a secretary, the director(s) become solely responsible for fulfilling this duty.
If a company has both officers (this is the collective term for directors and secretaries), they both have a legal duty to maintain these records. It is considered a criminal offence to breach this duty and it could lead to prosecution.
Maintaining the registered office address
The registered office address is the official address of the company, listed on Companies House public register of companies. It is where its statutory records must be kept (unless they are stored at a SAIL address).
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Company secretaries are responsible for maintaining the registered office address and the documents within it, making sure they are ready for public inspection as and when requested.
Should the registered office address change, this must be reported at Companies House.
Filing documents to Companies House
One of the administrative duties of a company secretary is filing certain documents and reports to Companies House. This includes the annual accounts, the purpose of which is to notify Companies House of the company’s financial activities during its financial year.
Another key filing is the annual confirmation statement. This document confirms general information about the company (such as its name, registered office address, and shareholder details) and ensures that the information held on the public record is correct and up to date.
As well as confirming certain information, a secretary is also in charge of reporting changes within the business to Companies House. This includes the appointment or termination of directors, changes to share capital, and alterations to the articles of association.
Arranging board meetings
Secretaries are normally responsible for arranging board meetings when requested by a director. They must ensure that an agenda is distributed in advance, accurate minutes are taken throughout, and that the meeting adheres to regulatory requirements.
This duty may extend to annual general meetings (AGMs). However, AGMs are usually only needed in public limited companies or in private limited companies that are specifically required to do so by their articles of association.
Legal and financial compliance
One of the main responsibilities of a company secretary is to assist in ensuring the business remains compliant with the Companies Act 2006, the articles of association, and any other relevant legislation. The secretary oversees that the company and its officers act within their powers as per these governing regulations, and that financial transactions like dividend distribution are carried out correctly.
To maintain legal and financial compliance, a secretary must have a solid understanding of the Companies Act 2006, as well as the company’s internal constitution, and remain up to date with new company laws.
Internal and external communications
Secretaries have to communicate effectively with the board of directors and shareholders. They are responsible for advising directors of their individual and collective duties, as well as ensuring that they adhere to them. They are also the main point of contact for shareholders and external regulators.
Additionally, a company secretary can sign (or co-sign) legal documents on behalf of the director(s). This includes documents such as share certificates, the confirmation statement, and financial documents such as cheques, and formal company contracts.
Additional duties
In small companies, secretaries often take on additional responsibilities, such as:
- Managing payroll
- VAT registration (if and when required)
- Insurance
- Pensions
- Health and safety
- Paying Corporation Tax
Key skills a company secretary should have
If you’re considering appointing a company secretary, there are some important skills to look out for. They should have:
- A solid understanding of company law
- Good knowledge of financial compliance
- Excellent organisational skills
- Excellent communication skills
- Attention to detail
- Good note-taking abilities
- Critical thinking skills
- Decision-making skills
- Confidence
If you are looking for a qualified company secretary, ensure they are a chartered company secretary ratified by the Corporate Governance Insitute UK & Ireland.
Thanks for reading
A private limited company does not require a secretary. However, there are many benefits of appointing someone to take on this role.
This person can help ensure that your business stays compliant, bring valuable knowledge and expertise to the business and drive it forward, and take a lot of the administrative pressure from the directors.
We hope you found this article helpful. If you have any questions or comments about company secretaries, please post them below.
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