Role of the Company Secretary

With many clubs considering incorporation the question of the need for a Company Secretary is often raised as there is no longer any legal requirement for one. However, company law imposes certain administrative duties and obligations on all companies and, whether or not a company has a formally appointed company secretary, these need to be carried out. They can be delegated to an internal company secretary or an external service provider but the primary responsibility remains with the directors.

As previously noted a private limited company is no longer required to appoint a company secretary, except when their articles of association contain a provision requiring a mandatory appointment. If the company was registered before April 6^th 2008 your articles will contain this provision but you can remove it at any time by passing a special resolution of the company members (shareholders or guarantors). If you do not remove this clause, you will legally need a company secretary. Companies with no such provision can choose to appoint or remove a secretary at any time.

The company secretary of a Company Limited by Guarantee needs no formal qualifications. It is up to the directors to ensure that a person has appropriate knowledge and experience to act as a secretary of the company. Disqualification as a director either by order of court or through bankruptcy will prevent an individual acting as a company secretary unless a court specifically allows this.

Except for occasional restrictions imposed by the government on the activities of certain foreign nationals a director or secretary can be of any nationality and can live anywhere in the world.

The rights of a Company Secretary will depend on his or her contract with the company. The secretary has no special rights under the Companies Act but the secretary is permitted to sign most of the forms prescribed under the Companies Act.

The job of company secretary in any company does involve some potential liabilities but in practice it is the qualified company secretaries, employed by public companies, with employment contracts which spell out all the responsibilities, who are most likely to be prosecuted for any serious wrongdoing. An unqualified company secretary, employed by a small Company Limited by Guarantee, is unlikely to be prosecuted unless he or she is knowingly involved in serious wrongdoing. In any company, it is the company’s directors who have primary legal responsibility. Directors and company secretaries could be held jointly liable for failures to meet the provisions of the Companies Act (except for filing company accounts, for which directors alone are responsible).

The duties of a company secretary are not specified by the Companies Act but the following are usually his or her responsibility: –

• Facilitating the smooth operation of the company’s formal decision making and reporting requirements; organising board and board sub-committee meetings; formulating meeting agendas with the chairperson and advising management on content and organisation of memoranda or presentations for the meeting; collecting, organising and distributing such information, documents or other papers required for the meeting; ensuring that all meetings are minuted and that the minute books are maintained with certified copies of the minutes and that all board committees are properly constituted and provided with clear terms of reference.

• Ensuring that an annual general meeting is held in accordance with the requirements of the Companies Act and the company’s Memorandum and Articles of Association; obtaining internal and external agreement to all documentation for circulation to company members; preparing and issuing notices of meetings, and distributing proxy forms. At meetings, ensuring that proxy forms are correctly processed and that the voting is carried out accurately; co-coordinating the administration and minuting of meetings.

• Ensuring that the company complies with its Memorandum and Articles of Association and, drafting and incorporating amendments in accordance with correct procedures.

• Maintaining the following statutory registers:

1. members
2. directors and secretary
4. directors’ interests

• Filing information with the Registrar of Companies to report certain changes regarding the company or to comply with requirements for periodic filing. Of particular importance in this regard are:

1. annual returns
2. report and accounts
3. amended Memorandum and Articles of Association
4. notices of appointment, removal and resignation of directors and the secretary
5. notices of removal or resignation of the auditors
6. change of registered office
7. resolutions in accordance with The Companies Act.

The relevant forms to file the above can be obtained from the Companies House website.

• Coordinating the publication and distribution of the company’s annual report and accounts, in consultation with the company’s internal and external advisers, in particular, when preparing the annual directors’ report. Supplying a copy of the accounts to every member of the company and every person who is entitled to receive notice of general meetings. You must send accounts at least 21 days before a meeting at which they are to be laid.

• Continually reviewing developments in corporate governance; facilitating the proper induction of directors into their role; advising and assisting the directors with respect to their duties and responsibilities, in particular compliance with company and charitable law.

• Companies no longer need to have a company seal but if they do, the secretary is usually responsible for its custody and use.

• Establishing and administering the registered office; attending to the receipt, co-ordination and distribution of official correspondence received by the company, sent to its registered office; ensuring the provision of facilities for the public inspection of company documents.

• Ensuring that all business letters (including email correspondence), notices and other official publications of the company show the name of the company and any other information as required by company statutes and that company name plates are displayed in a conspicuous place.

• Monitoring and laying in place procedures which allow for compliance with relevant regulatory and legal requirements, particularly under the Companies Acts including legal requirements on retention of documents; retaining the minimum set of records required; ensuring that procedures are in place to allow adequate historical archive to be maintained.

Company secretaries are also often asked to take on responsibility for legal matters in general. They might be required to advise the directors on their duties, and to ensure that they comply with corporate legislation and the Memorandum and Articles of Association of the company. A company secretary might also be asked to ensure that they comply with other legislation, including data protection and health and safety legislation. They might be asked to sign leases on behalf of the board, or to act as signatory for the board more generally, for example on the bank account or statutory documents. A company secretary might be asked to take responsibility for arranging adequate insurance to protect the company and the directors. Company secretaries are also frequently involved in negotiations with outside advisers, including accountants and lawyers.

This article is prepared for guidance and is accurate at the date of publication only. The GCMA will not accept any liability (in negligence or otherwise) arising from any member or third party acting, or refraining from acting, on the information contained in this document.

By GCMA