A company secretary is an important member of a business management team with a broad range of responsibilities and expertise. Amongst many roles, they ensure the business operates within legal, statutory and financial regulations as set out by the Companies Act 2006 and assist directors with their duties. No formal qualifications are required to be a company secretary; however, the position requires a high level of responsibility, so a competent person with knowledge of what is expected of the position is essential. Much like a director, a company secretary is appointed through Companies House.
The Role of a Company Secretary
There are no formally outlined duties in the Companies Act 2006, but some common responsibilities typical of the position include:
- The maintenance of statutory company records and registers and making these available for public inspection in the relevant places
- Ensuring compliance with the Companies Act 2006
- The preparation and filing of annual confirmation statements
- Notifying Companies House if any registered company details change
- Maintaining company accounting records and monitoring the company’s financial position
- Alerting directors to any financial issues
- The preparation and filing of Company Tax Returns and paying Corporation Tax
- Managing PAYE, payroll and VAT
- Organising board meetings, inviting the relevant parties, and providing meeting minute services
- Signing internal documents on behalf of the directors
This is not a definitive list, and any given company secretary may be responsible for some or all of the duties mentioned above, plus others.
Who Needs to Appoint a Company Secretary?
Appointing a secretary is optional for private limited companies incorporated after 8th April 2008 unless explicitly required in the company’s articles of association. A public company, on the other hand, must appoint a company secretary.
Despite no legal requirement for many private limited companies, many choose to appoint a secretary to assist the director with company secretarial services.
Who Can and Cannot be a Company Secretary?
If you appoint a secretary for a private limited company, the secretary can be an individual, including a director or shareholder. The position can also be held by an external company that offers direct CoSec services, like Company Registrations Online. However, a company secretary cannot be:
- A company auditor or an employee of the auditor
- Anyone with an undischarged bankruptcy (unless permission is granted by the courts for the individual to act as a company secretary)
Whilst there are no restrictions on the director being the company secretary, it is not recommended as the role of the secretary in a private limited company is usually to reduce the director’s workload by taking on many of the responsibilities listed earlier.
Section 273 of the Companies House Act 2006 outlines additional requirements for public limited companies. The appointed person must have the required knowledge and experience to carry out the role and meet at least one of the following criteria:
- Have held the office of the secretary of a public company for a minimum of three of the five years preceding the appointment as secretary.
- Is a member of a specified body (e.g. The Institute of Chartered Accountants)
- Is a barrister, advocate or solicitor
- Is “a person who, by virtue of his holding or having held any other position of his being a member of any other body, appears to the directors to be capable of discharging the functions of secretary of the company.”
Appointing a Company Secretary
There is no legislation mapping out the process for appointing a company secretary; however, it is common for the company directors to hold a meeting to determine a company secretary following a ‘consent to act’ from the person you wish to appoint.
Companies House need to be informed of the appointment. This is done through the completion form AP03 for the appointment of an individual. The following information will be required:
- Title and full name of appointee, including any former names
- Date of appointment
- Service address
- The signature of the new secretary and a director
To appoint a corporate body as your company secretary, you will require Form AP04. In either instance, you can complete this work yourself or enlist the help of ad hoc company secretarial services.
Removing a Company Secretary
There may come a time when you need to remove a company secretary, either because they are not performing their role adequately or they wish to resign from the position. To remove a secretary from a private limited company, all that is required is a majority vote from the directors through a board resolution without the need to consult shareholders. Of course, a company may have other requirements in their articles of association, so these should be checked first to ensure the proper process is followed. Generally speaking, the process is as follows:
- Directors approve a resolution to remove a company secretary either at a board meeting with a written resolution
- The removal or resignation is recorded in the company’s statutory register of secretaries
- Companies House are notified using the Form TM02 within 14 days of the removal or resignation
- If relevant, notify the bank that the person is no longer an authorised signatory
- Appoint a new company secretary if required.
There is also no mandatory process for the removal of a company secretary in a public limited company, and the above process is also applicable. However, public companies may need to comply with corporate governance codes, which may stipulate some additional conditions for the removal of a secretary.
In all cases, Companies House must be notified within 14 days of the removal of a company secretary.
Even if having a company secretary is not a legal requirement for your business, they are a valuable asset. However, if you are concerned about finding the right individual to fill the role, consider outsourcing to an experienced, CoSec company like Company Registration Online, where we do not just deal in online company registration – services like our company secretarial software help to improve efficiency and reduce costs. Contact us today for more information about how we can help your business.