Company secretary. The position and the role

Is it compulsory for every company to have a company secretary?

No it is not, though it was until 6th April 2008. The position now is that every public company must have a company secretary, but the position is voluntary in every private company.

Who decides whether or not there will be a company secretary of a private company?

Unless the articles say differently (which is very unusual) the directors decide, and they can change their mind from time to time.

Is the last answer really true in all private companies?

Yes it is. The UK's largest private company has an annual turnover in excess of two billion pounds and the directors do not have to have a company secretary, though they choose to do so.

It is possible for a private company to have a single shareholder, with the same person as the sole director, no company secretary and (if it is a small company) no audit.

Who chooses the company secretary?

The first secretary (if there is one) is chosen by the subscribers to the memorandum and notified to Companies House on Form IN01 Application to register a company. After this, unless the articles say differently (which is very unusual) it is a matter for the directors.

Who can be the secretary of a public company?

Section 273 of the Act states that:

'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.'

This duty only relates to public companies and could lead to criticism of directors if an unsuitable appointment is made. In addition the secretary must be:

a barrister, advocate or solicitor called or admitted in any part of the United Kingdom or

a member of one of the following bodies:

The Institute of Chartered Accountants in England and Wales.

The Institute of Chartered Accountants of Scotland.

The Chartered Association of Certified Accountants.

The Institute of Chartered Accountants in Ireland.

The Institute of Chartered Secretaries and Administrators.

The Chartered Institute of Management Accountants.

The Chartered Institute of Public Finance and Accountancy.

There are exceptions to these requirements and these are explained in the answer to the next question.

Are there any exceptions to the requirement for the secretary of a public company to be a member of one of the bodies specified in the answer to the last question?

A person may also hold the position if for at least 3 of the 5 years prior to the appointment he held the office of secretary of a public company.

In addition section 273 states that the directors may appoint:

'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.'

This last point might seem to suggest that in practice the directors can appoint almost anyone, but there is the overriding requirement to take reasonable steps spelled out in the answer to the last question. In practice, the directors of public companies almost invariably do make suitable appointments and in most cases the person appointed holds one of the specified qualifications.

Who can be the secretary of a private company?

The choice of company secretary is made by the directors. The articles may impose restrictions but otherwise they have a free choice. The following points are relevant:

The company secretary may be a director.

The company secretary may be an employee.

The company secretary may be an outside professional, such as an accountant, solicitor or chartered secretary in practice.

The company secretary can be another company.

The company secretary can be a partnership. In England and Wales this has the legal effect of making all the partners joint secretaries. In Scotland it does not have this effect and the partnership stands in its own right.

There are no age restrictions.

 
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