The Company Secretary Role

While the Companies Act 2006 removed the obligation for private companies to appoint a Company Secretary, the duties associated with the role did not vanish, and the role of the Company Secretary has become more important through the years. Despite the name, company secretarial services do not involve the traditional duties of a secretary, instead, they refer to the administrative function that supports businesses in their setup and ongoing administration, ensuring that companies comply with relevant law and all regulations at Companies House regarding all laws, especially the Companies Act 2006 and more recently the Economic Crime and Corporate Transparency Act 2023. If a company chooses not to appoint a Company Secretary the directors assume these responsibilities.

The governance responsibilities of the company secretary were first set out in the 1992 Cadbury Code of Conduct: “The company secretary has a key role to play in ensuring that board procedures are both followed and regularly reviewed. The chairman and the board will look to the company secretary for guidance on what their responsibilities are under the rules and regulations to which they are subject and on how those responsibilities should be discharged. All directors should have access to the advice and services of the company secretary and should recognise that the chairman is entitled to the strong and positive support of the company secretary in ensuring the effective functioning of the board. It should be standard practice for the company secretary to administer, attend and prepare minutes of board proceedings.” (Cadbury Report, para 4.25)

Role of the Company Secretary

The role of the company secretary can cover all areas of a company’s activities, depending on the size and nature of the company. The duties of the company secretary are not specified in detail in the Companies Act, although as an officer of the company, the company secretary is liable, along with the directors, for any breaches of the regulations imposed by the Act.

The qualifications of a company secretary (of a public company) are prescribed in section 271(2) of the Companies Act, and it is the responsibility of the board to ensure that the person responsible for the Company Secretary work, meets the qualification requirements. It is the duty of the directors of a public company to take all reasonable steps to secure that the secretary (or each joint secretary) of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company, and has one or more of the following qualifications:

• Experience as company secretary for at least three to five years;

• Being a member of any of the professional bodies listed; the Institute of Chartered Accountants in England and Wales; the Institute of Chartered Accountants of Scotland; Association of Chartered Certified Accountants; the Institute of Chartered Accountants in Ireland; the Institute of Chartered Secretaries and Administrators; the Chartered Institute of Management Accountants, or the Chartered Institute of Public Finance and Accounting;

• Being a barrister, advocate or solicitor;

• Being capable of discharging the functions of the secretary.

The company secretary plays a central role in the legal operation of the organisation and, by ensuring high standards of corporate governance, shareholder relations and board effectiveness, the company secretary can contribute to the company’s performance. The UK Corporate Governance Code recognises explicitly and secretary’s responsibilities for corporate governance, particularly as an independent, impartial adviser.

Legal Obligations

Keeping up with changing legalisation can be challenging, but as a Company Secretary, either in-house or outsourced, they will ensure that all applicable returns and changes in the company, will be prepared and filed accurately and on time and that statutory records are maintained in accordance with relevant laws.

Under the Companies Act 2006, a Company Secretary, as well as the directors and shareholders, is legally obliged to perform specific tasks, such as filing confirmation statements, keeping accurate records (company registers), and providing information about the company’s directors and shareholders. They are also responsible for ensuring directors and shareholders comply with the law.

If a director or shareholder breaches their duties, the company secretary may be held liable for any associated damages. This could include failure to report a change a change in circumstances, making false statement, or acting fraudulently. In some cases, the company secretary may even face prosecution along with the directors of the company. These potential consequences underline the importance of the company secretary’s role in maintaining legal compliance.

The penalties for breach of the Companies Act 2006 can range from a simple fine, ranging from £250 to £2,000, to a prison sentence, depending on the nature of the offence and whether it is classed as a summary or indictable offence.

Authored by: London Team