Since 6 April 2008, private companies have not had to appoint a company secretary. The Companies Act 2006 (sections 270 and 271) states that a PLC must have one while private companies are not required to do so.
The objective of the introduction of the reform and new Companies Act was to simplify and modernise company law, guaranteeing higher flexibility and in general streamline any bureaucratic and administrative burden on companies, with a special look at smaller size entities.
Appointing a secretary for a limited company has become a matter of choice. Where the choice is not to appoint, the directors must be aware that someone will need to take on the responsibilities and duties traditionally taken on from the secretary.
The answer is, it depends on whether you are a limited company, a plc. Let’s look at PLCs first because there are stricter rules here.
Public limited companies have qualifications of their company secretaries dictated by s273 Companies Act 2006. Here’s a summary of
Since 6 April 2008, private companies have not had to appoint a company secretary. However, where one isn’t appointed it is a legal responsibility of the directors to ensure the duties are fulfilled. Failure to do so is a personal liability.
Unlike for PLCs. There are no rules governing this. Anyone can be a company secretary of a UK limited company except the company auditor, any employee of the auditor, or any person who is an undischarged bankrupt or disqualified director. However, just because anyone can be the company secretary, there are factors worth considering, which we look at next.
A person or a company can be appointed to a limited company. Limited companies are not obliged to have a company secretary however you will need someone to carry out the key functions of a company secretary. Certain functions are sometimes bolted on to a finance director or general council role, with a separate minute taker function allocated elsewhere. There are risks with this approach:
A company along with its board of directors may be better served by use of a company secretarial service provider who will stay ahead of changing legislation and best practice governance such as Elemental.
Qualified and quality company secretaries have a broad skill set – corporate law, finance, governance, strategy and corporate secretarial practice – and they advise a company’s board in these key areas, providing support to the Chair, CEO and non-executive directors.
For a company, public or private, it would be the directors who would have the authority to approve the appointment of a company secretary. When deciding they should consider we can be a company secretary and who should be a company secretary.
In case of an LLP, it would be the LLP members who would have the authority to appoint a company secretary.
In case of a limited partnership, it would be the partners who would be authorised to appoint a company secretary.
Once they have decided on the successful candidate, there are two ways directors can approve the appointment of a company secretary: