Does your business neglect or embrace the role of the Company Secretary?
Who is your Company Secretary? It’s a role required by law for PLCs and optional for private companies limited by shares, but the responsibilities if overlooked by directors, create legal and compliance issues. Many of these issues come to light when a business is being prepared for sale or if the owners are seeking investment into the business to help it to grow.
The governance of a company is important, and the responsibilities of the Company Secretary should be seen as ensuring corporate integrity and ensuring the board of directors operate within the law. Failure to do so may mean notices haven’t been properly served, and meetings may not be properly held as a result. The directors may need to seek ratification from the shareholders as a result of easily avoidable mistakes, which won’t give the shareholders confidence in the company’s day to day management. Good governance will give shareholders and investors’ confidence in the business.
The Company Secretary will ensure accurate and timely filings are made to Companies House and they will stay on top of the legal issues that might need additional, professional support. They can also advise the board on governance strategy and ensure correct notice is given for certain meetings.
By law a company is required to maintain:
- Register of Members which provides the evidence of the legal ownership of company shares.
- Register of Mortgages and Debentures, which registers charges against company assets created before 6 April 2013, and which is now optional.
There are also non-statutory registers which should be kept up to date such as the Register of Allotments and Transfers.
Since 4 March 2024, as part of the Economic Crime and Corporate Transparency Act 2023, various registers previously required to be maintained internally must be maintained centrally via Companies House, including:
- Register of Directors and Register of Secretaries which lists current and past directors and secretaries.
- Register of Residential Addresses which records the residential addresses of directors (not visible to the public).
- Person with Significant Control Register, to identify individuals or entities with significant control over the company.
Financial and or criminal sanctions might be faced by company officers who fail to maintain the statutory records.
The Company Secretary is also responsible for maintaining a compliance calendar for the Confirmation Statement (previously known as the annual return) and ensuring the filing of accounts.
Depending on your business growth strategy, it might be helpful to appoint a specialist solicitor to act as Company Secretary who can support you with all these issues and also support board and shareholder meetings and if you have one, the Annual General Meeting. This will ensure meetings are run following governing documents and they can answer questions if needed.
Appointing a Company Secretary can significantly impact on your business success, as it allows the directors to focus on the day-to-day running of the business rather than dealing with compliance and governance issues, so consider reviewing how your company prioritises this role.
Toby Walker is an Associate Solicitor at Taylor Walton Solicitors www.taylorwalton.co.uk
