What is the role of a company secretary?

A company secretary is usually appointed to reduce the workload of directors by assisting them with their day-to-day management duties and responsibilities. Whilst they remain mandatory for public limited companies (PLCs), the Companies Act 2006 abolished the requirement for private companies to appoint one unless their articles of association state otherwise.

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The secretary of a private limited company does not need any formal qualifications, but they must be suitably competent and knowledgeable to bear such a high level of responsibility. PLCs are legally required to have an appropriately qualified secretary at all times.

If a company secretary fails to effectively carry out their statutory duties, the directors can be held personally accountable for these shortcomings because, ultimately, legal responsibility falls upon company directors.

What does a company secretary do?

Whilst the Companies Act 2006 does not set out the formal duties of a company secretary, typical responsibilities include the following:

• Ensuring the company is managed in accordance with the Companies Act 2006, the articles of association, and any shareholder agreements
• Maintaining statutory company records and registers, including a PSC register
• Making company records and registers available for public inspection at the registered office address or SAIL address
• Notifying Companies House about changes to the company’s registered details
• Preparing and filing annual confirmation statements (previously called an annual return)
• Maintaining accurate and up-to-date accounting records
• Monitoring the financial position of the company
• Preparing and filing annual accounts
• Notifying the directors and shareholders of any financial problems or discrepancies
• Overseeing company tax-related requirements
• Arranging board meetings and general meetings
• Maintaining meeting minutes and company resolutions
• Signing internal contracts and prescribed documents on behalf of the company and its directors
• Issuing share certificates
• Appointing an auditor, accountant or solicitor, where required

There are several modern variations to a company secretary’s role, too. If they possess the right skills and experience, they can assist with a variety of administrative and office management tasks and offer strategic business support.

They can also oversee financial errands, such as managing share schemes, payroll, VAT, insurance, and pensions.

Do I need to appoint a company secretary?

Section 270 of the Companies Act 2006 states that “a private company is not required to have a secretary.” That is unless the articles explicitly state that a secretary must be appointed. Any duties that would require a secretary’s authorisation may be delegated to a director or a person authorised by the director(s).

The shareholders can alter the articles at any time to add or remove this provision via a special resolution. This type of resolution requires at least 75% of eligible votes in favour in order to pass.

Public companies, however, must legally have a company secretary appointed at all times.

While private companies are not obligated to appoint a secretary, it’s worth doing so if there is someone suitable for the role. This individual can primarily help companies stay compliant, ensure timely filings, and assist directors with their legal responsibilities, in addition to various other tasks we mentioned earlier.

A secretary’s skills and abilities are wide-ranging, and considering that a director’s legal duties are rather extensive, these can prove to be incredibly useful for running a business compliantly, effectively, and efficiently.

What is the difference between a company secretary and a company director?

A director is ultimately responsible for ensuring the company is managed lawfully and meets all statutory requirements. However, secretaries can still incur personal responsibility if they fail to comply with the requirements of the Companies Act 2006.

Under the law, directors have the power to appoint and remove secretaries and decide which duties to delegate. Therefore, whilst directors and secretaries may interchangeably carry out the same duties, directors are still liable for these responsibilities and can be held personally accountable if the secretary fails to uphold their statutory duties.

Who can and cannot be a company secretary?

The secretary of a private limited company can be an individual person, including a director or shareholder. Another company, accountant, solicitor, or professional chartered secretary can also hold this role.

However, the company auditor, any employee of the auditor, or any person who is an undischarged bankrupt or disqualified director cannot be a company secretary.

Furthermore, for a person to be eligible to act as secretary of a public company, they must have qualifications set out in section 273 of the Companies Act 2006. They must have the knowledge and experience to carry out the role and either:

• Have been a secretary of a public company for the last three of the five years immediately preceding their appointment;
• Are a member of a professional body, such as the Chartered Governance Institute or Institute of Chartered Accountants in England and Wales;
• Are a barrister or solicitor in any part of the United Kingdom; or
• As a result of holding any other position of another body, appears capable to act as secretary.

Can a director also be the company secretary?

Yes. There are no statutory restrictions that prevent a director from also holding the position of company secretary. However, because a secretary is usually appointed to reduce the workload of directors, there is often not a great deal to be gained in practice from a director also being the secretary, especially if the company has only one director.

Furthermore, certain documents that require the signatures of two people cannot be signed by a sole director and a secretary if these roles are held by the same person.

Can a shareholder also be the company secretary?

Yes, a shareholder can also be the secretary of a company. That is, as long as they:

• Are not the company auditor or employee of the auditor
• Have not been declared bankrupt or disqualified as a company director

How to appoint a company secretary

You can usually appoint a company secretary by a resolution of the board of directors or by the members following receipt of a letter of ‘consent to act’ from the prospective person. Thereafter, Companies House should be informed of the appointment as soon as possible on Form AP03, which must include the following:

• Date of appointment
• Title, full forename(s) and surname, including any former name(s)
• Service address
• Confirmation that the appointee has consented to act as a secretary
• A director’s signature

This information can be submitted online through WebFiling or 1st Formations’ free Online Company Manager.

The secretary’s details will be placed on public record and added to the company’s statutory register of secretaries. Therefore, a residential address should not be used as a contact address if the secretary wishes to keep this information private.

How to remove a company secretary

You can usually recome a secretary from a private limited company at any time by a simple majority vote of the directors. Alternatively, by ordinary resolution of the members, subject to any service contract in force. Likewise, a secretary may resign by giving notice in writing, subject to the terms of their service contract.

The procedure:

• Directors must approve a resolution to remove a secretary – this can be done at a board meeting or by written resolution
• Record the removal or resignation in the company’s statutory register of secretaries
• Notify Companies House on Form TM02 within 14 days of the removal or resignation. This can be delivered online via WebFiling or 1st Formations’ free Online Company Manager.
• If applicable, notify the bank that the secretary is no longer an authorised signatory on the business bank account
• Appoint a new secretary at any time, if required

Secretary details are made public

All details registered at Companies House at the time of a secretary’s appointment are visible on public record. This includes their full name, service address, and date of appointment. For this reason, many secretaries do not use a private residential address as their service address.

Summary

A company secretary is somewhat of a jack of all trades. From helping with compliance, statutory filings, and recording keeping to administrative, financial, and strategic business assistance, a secretary is an integral part of any company.

While private companies don’t legally need to have them, their roles are highly valuable, so it’s a good idea to appoint a secretary if there is someone suitable.

Thanks for reading. If you have any questions, please post them below, and a member of our team will get back to you. Don’t forget to browse the 1st Formations blog for more useful tips and advice.