Who can act as a company secretary?

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In the first of this series of articles we looked at the questions “does my company need a company secretary?” and “what are the core duties of a company secretary?”  We now move on to consider who you can appoint to the role of company secretary and what qualifications they must possess.

Who can act as company secretary in a private limited company?

There are very few restrictions when considering who can and cannot undertake the role of company secretary in a private limited company. Your company auditors cannot also act as your company secretary and the appointee must not be an undischarged bankrupt unless given leave by the court. Otherwise, an individual, partnership or another company (including another group company) are all allowable and it is common for a director of the company to act also as the secretary. In addition, there are no legal requirements for the company secretary of a private company to have relevant professional qualifications or previous experience.

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Who can act as company secretary in a public limited company?

For a public company there are extra requirements as set out in s273 of the Companies Act 2006. Any appointment to the role of company secretary for a public company should satisfy one or more of the following qualifications:

  • 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 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.

  • 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.”

The last “catch-all” condition allows directors to use their own discretion and appoint an individual that has not held the office of company secretary before and does not hold one of the listed qualifications. However, this discretion is limited by the overriding requirement of s273 which conveys a duty on the directors to take “all reasonable steps” to ensure that the appointee has sufficient “knowledge and experience to discharge the functions of secretary of the company” and the directors of a public company must be able to demonstrate that they have satisfied this requirement.

 

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:

  • A 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.
  • 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.
  • 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.
  • 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.
  • Confidence: 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.
  • 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.

 

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.

 

Notice of appointment or removal of a company secretary, or changes to their details, must be filed with Companies House within 14 days of the change. In addition to informing Companies House, you must also update the statutory Register of Secretaries for any changes.

To inform Companies House of the appointment of an individual to the role of Companies House, you can complete paper Form AP03. For the appointment of a corporate body to the role you should complete Form AP04. If you have terminated the appointment of a company secretary, be they a natural person or a corporate body, you can use Form TM02 to inform Companies House.

Similarly, amendments to the details of a company secretary (such as a new service address or change to their name) must be submitted to Companies House within 14 days of the change. Paper Form CH03 can be used to inform Companies House of any changes to the details of a company secretary who is a natural person, whilst Form CH04 applies for a corporate body undertaking the role.

A speedier alternative, which avoids both the need to select the correct paper form and the vagaries of the postal system, is to process all of these changes online using Inform Direct. Our FREE records management tool will automatically submit the appropriate filing with Companies House, saving you the time and effort of completing any paper forms. It will instantaneously update the statutory Register of Secretaries, saving you the separate task. 

Further information:

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.

 


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