The company secretary has an important role within an organisation. They are responsible for making sure the company complies with all compulsory financial and legal practices, and ensures the company maintains a high standard of corporate governance. This is why when appointing a company secretary to your business, you should make sure they have a good up to date understanding of all the current laws that will affect their work.
The company secretary acts as the a main point of communication within a company between the shareholders and the board of directors. They are usually the person to report and communicate on company procedures and new developments. Where a company has an extra level of executive management, the company secretary will usually also act as the communication link between the board of directors and the executive management.
When you set up a public limited company, you are required by law to employ a company secretary. However, a private limited company no longer need to employ a company secretary, although many of them still do. You will find company secretaries employed across all sectors, especially within the public and not-for-profit sectors.
It is not always necessary for the person in the role to be called a company secretary. Some companies prefer to use job titles such as 'head of democratic services', or 'head of governance' as an alternative. These job titles are thought to better reflect the role played within the company.What are the responsibilities of a company secretary?Mainly, company secretaries will work closely with the board of directors, and report directly to the chairperson. This means that they can freely offer guidance and advice on governance and compliance with the law within the core management of the company.
Depending on the type and size of the company, a company secretary can cover a wide range of functions within the business. Some of the most common tasks that are covered within this role are:
- Preparing paperwork, reports and agendas for board meetings, annual general meetings (AGMs), and committee meetings, task force meetings, or focus group meetings.
- Submitting forms and required paperwork and annual returns with Companies House.
- Taking minutes, drafting resolutions, and following up on actions from meetings.
- Ensuring company policies are kept up to date, and referring necessary changes to policy to the appropriate committee for approval.
- Updating company registers and statutory books.
- Dealing with company correspondence, writing reports and gathering information, and making sure new guidelines and policy changes are delivered to company shareholders.
- Advising members on legal matters and governance during meetings as and when needed.
- Keeping on top of legislation changes or new rules that will impact the company, and ensuring action is taken by the company to respond and comply in a timely manner.
- Be the main liaison for external bodies, such as auditors and solicitors.
- Overseeing the health and safety of company employees and ensuring the correct insurance is in place to cover both employees and business property.
Again, depending on the size of the company, a company secretary may find the majority of their time will be taken up with liaising between board members and shareholders, as well as compliance responsibilities. For example, a very large publicly traded company may have many shareholders, so maintaining the register of shareholders and monitoring the changes in share ownership may become quite time consuming in itself.
There will also be more time needed to ensure that dividends are paid and share option schemes are managed, and the company secretary may also take a role in share issues, takeovers and mergers.
Within smaller companies, the role can be much more varied, so you can expect some company secretaries to also be responsible for:
- Overseeing insurance cover for business premises, equipment as well as employees.
- Overseeing the company pension scheme administration.
- Negotiating and signing contracts with customers and suppliers.
- Managing all public relations.
- Supervising property and office space requirements.
- Dealing with personnel administration.
- Financial management and salaries.
Although a company secretary role is usually office based, and they usually work during regular office hours, a company secretary will still need some flexibility to be able to work longer hours as and when needed to complete reports, especially those with a regulatory deadline, and accommodate meetings that may over-run.
If you are forming a very small company, you may not need to have a full-time company secretary in place. You could employ a company secretary on a part-time basis, or hire a self-employed company secretary on a freelance basis. This is not unusual practice amongst professionals running a sole private practice, such as a chartered accountant or solicitor. Chartered secretaries are qualified via ICSA (Institute of Chartered Secretaries and Administrators), and can offer the same services as those found in larger companies.
Do I need a company secretary in my private limited company?
As a private limited company, the simple answer is – no you do not. Since April 2008, the Companies Act 2006 no longer requires you to have a company secretary in place. Unless there is a strict requirement written within your articles of association that states you do need to appoint a company secretary, many private limited companies manage just fine without one.
Even when your articles of association state you must have a company secretary, it can be quite easy for the company directors to amend the provision. However, many small private companies still do employ a company secretary, and don't forget that corporate governance and statutory compliance are essential tasks that still need to be completed. Having a dedicated company secretary in place to take care of these matters will be much easier for many private limited companies to deal with. It may work out better than dividing up all the tasks and giving them to the board of directors to cope with on top of their existing duties.
If you are unsure about whether your company set up needs to have a company secretary, and would like some expert guidance on the matter, then why not call one of our friendly team at Your Company Formations today who will be more than happy to advise you.