There are very few legal restrictions to consider when looking to appoint to the role of company secretary for a private limited company. However, identifying the best candidate – one that will offer a set of skills and experience that perfectly compliments this important role, is essential.
Who can act as company secretary in a private limited company?
Legislation no longer requires private limited companies to have a company secretary, but many companies still do – reflecting the importance of this role. There are, however, some individuals that can never act as your company secretary:
- Your company auditor.
- Undischarged bankrupts – unless given leave by the courts to so act.
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Otherwise, an individual, partnership or another company (including another group company) are all allowable, and it is common for the director of a company to also act as the secretary.
Note also, that there are no legal requirements for the company secretary of a private limited company to have relevant professional qualifications or previous experience.
Who can act as company secretary in a public limited company?
The first point to note is that the directors must ‘take all reasonable steps’ to ensure that the candidate
is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company
In addition, the appointee must satisfy one or more of the following criteria:
- have held the office of company secretary of a public company for at least 3 out of the 5 years immediately before their appointment as secretary;
- be a barrister, advocate or solicitor;
- be a person who “by virtue of his holding or having held any other position or his being a member of any other body, appears to the directors to be capable of discharging the functions of secretary of the company.”
- be a member of any of the following bodies:
- Institute of Chartered Accountants in England and Wales;
- Institute of Chartered Accountants of Scotland;
- Association of Chartered Certified Accountants;
- Institute of Chartered Accountants in Ireland;
- Institute of Chartered Secretaries and Administrators;
- Chartered Institute of Management Accountants;
- Chartered Institute of Public Finance and Accountancy.
Whatever professional qualifications a potential candidate may possess, the directors of a public company must be able to demonstrate that they have satisfied the overriding requirement of s273(1)(a). That is, they must take ‘reasonable steps’ to appoint a company secretary with the ‘requisite knowledge and experience’.
What qualities should I look for in a company secretary?
If you have already read our earlier guide explaining the core duties of the company secretary, you’ll appreciate that any appointee needs to possess a broad range of skills. When assessing applicants for the role of company secretary, you might find the following checklist of key skills and experience useful:
1 Good working knowledge of business law, finance and corporate governance
Whilst the company secretary would not be expected to deal alone with all issues arising in these areas, they should have sufficient knowledge to ask the right questions and seek advice from and work with appropriate professionals. In a small private company, it is not uncommon for the company secretary to also undertake some tax work, such as the administration of payroll and submission of VAT returns.
2 Excellent organisational skills
The successful company secretary must always be one step ahead. They will ensure that the agenda of a board meeting is circulated in advance and to everyone who needs it, helping generate an efficient and productive meeting. And they will have a firm grasp of the annual corporate governance timetable ensuring that any work required is completed well ahead of filing deadlines.
3 First-rate communication skills
The company secretary often acts as one of the main channels of communication for the company. They must be able to deal with enquiries from and deliver information to a diverse range of people, tailoring their terminology to suit. They should expect to deal with directors, shareholders, employees, professionals and sometimes journalists.
4 Honest and reliable
The role of company secretary carries with it great responsibility. With access to confidential company information which they must ensure is kept secure, they must also be able to deal with individuals’ personal details sensitively.
The position of the company secretary is unique within the company. Whilst as a company officer they have a duty to act in the best interests of the company they are also the key point of contact for shareholders. A company secretary is therefore of most value to the company if they can act as an independent opinion, with enough confidence to offer their own view to the board.
6 Attention to detail
Recording accurate and complete board minutes, ensuring timely compliance and providing correct information to varied applicants all require steadfast concentration and attention to detail.
Whilst the list above is in no way exhaustive, it demonstrates how the best candidate for company secretary will come with wide ranging experience and a whole toolbox of skills.
Take time to appoint the best company secretary
Investing the time to find a candidate with all the qualities outlined above plus enough experience is essential as the company’s directors share joint liability with the company secretary for any Companies Act breaches. For example, if the company secretary fails to file the confirmation statement this is considered a criminal offence and can result in all the company’s directors (and the company secretary) being fined personally in the criminal courts. In this instance the registrar may also make moves to strike the company off the public record.
How do I appoint or remove a company secretary?
The appointment or removal of a company secretary will generally be governed by the company’s articles of association and would normally be a matter for the board of directors, or a subset of the board – as provisioned in the articles. The CA 2006 does not provide any guidance as to how a company should appoint or remove the company secretary. However, for public companies section B.5.2 of the UK Corporate Governance Code states that the
appointment and removal of a company secretary should be a matter for the board as a whole.
Every time the company appoints, removes or changes the details of a company secretary, this must be reported to Companies House within 14 days. Companies House may impose fines if this 14 day notice period is exceeded.
To inform Companies House of an appointment to the role of company secretary use:
- Form AP03: for an appointee that is an individual.
- Form AP04: for an appointee that is a corporate body.
If you have terminated the an appointment to the role of company secretary use:
- Form TM02: for an appointee that is either an individual or a corporate body.
For amendments to the details of a company secretary (such as a new service address or change to their name) use:
- Form CH03: for changes made to the details of a natural person.
- Form CH04: for changes made to the details of a corporate body undertaking the role.
Don’t forget that in addition to informing Companies House, whenever you appoint, remove or change the details of a company secretary you must also update the statutory Register of Secretaries for the changes.
Making it simple to manage the role of company secretary
Whether you need to appoint, remove or change the details of a company secretary, there is a speedier alternative to the submission of handwritten paper forms. You can process all these changes online using Inform Direct and feel relaxed that as you fill in the basic details of the change, the appropriate form will be chosen and sent electronically to Companies House, avoiding the vagaries of the postal system. The details of the changes are saved, giving you an audit trail and the statutory Register of Secretaries is instantaneously updated, saving you the separate task.
Having looked at who can act as a company secretary and the process of appointing to the role, you may wish to read our article entitled “Does my company need a company secretary?” This considers whether your company is required to appoint a company secretary before looking at the core duties that go hand in hand with the role. You can also obtain further information from the Institute of Chartered Secretaries and Administrators (ICSA) via its web site at www.icsa.org.uk.
All companies are required to maintain up to date company records. Inform Direct is the perfect tool to help you easily keep everything up to date.
A previous version of this article was originally published on 17 July 2014.