In April 2008, the law changed in relation to the Company Secretary and it is no longer a legal requirement to have one in place. If a company was registered after 6 April 2008, there won’t automatically be a provision in place that requires a Company Secretary to be appointed. Companies registered before that date are now able to remove the provision, thereby negating the legal requirement to have a Company Secretary in place. However, despite the lack of a legal requirement, the Company Secretary plays an important role which many people still wish to fill.
What does the Company Secretary do?
The role itself will vary from company to company, as will the decision as to whether the Company Secretary is also a director. Duties will usually be based around ensuring that the company and its directors fulfil all statutory responsibilities and duties. This may take the form of instructing and monitoring experts. It can also include reporting to HMRC, filing tax returns, keeping an eye on finances, arranging meetings and preparing reports. The list is almost endless and very much depends on which duties the directors decide to delegate.
Who else could do this if there wasn’t a Company Secretary?
The obligations that are carried out by the Company Secretary are effectively delegated by the directors. In a small company, directors may choose to do the administration and ensure compliance with statute themselves. They might also choose to outsource this role to an agency that can do it for them.
However, it is important to remember that any legal obligations will ultimately remain the responsibility of the directors, so it is important to appoint someone in whom you have absolute faith if you do decide to delegate. The benefit of a Company Secretary is that they will become jointly liable for any failures in relation to duties under the Companies Act. The exception to this is in relation to filing accounts which is solely the responsibility of the directors. Hence if the Company Secretary is also a director, they become liable for that as well.
So are they still needed?
If you are running a very small company and you have enough personal knowledge to ensure that you comply with requirements, a Company Secretary may not be needed. However, if you are unsure of your obligations or how to comply with them, it is worth appointing a Company Secretary or outsourcing the role. Ignorance is no defence to a breach of the law. This applies equally to company directors. Hence it is always better to be on the safe side and appoint an expert as the Company Secretary.
Goodwille advise UK companies on Corporate Legal matters and serve as Company Secretary for many overseas businesses. If you need help with ensuring legal compliance for your UK company or want Goodwille to act as Company Secretary for you, check out our Corporate Legal services or get in touch with us for more information.