Since the Companies Act 2006 was introduced, private companies are no longer required to have a formal company secretary appointed. Yet, whether the company is a public company or a private company, the company secretarial services still need to be carried out. Despite this people sometimes overlook this critical area of company law with the view that it is merely an administrative burden with little real effect. So what exactly are the benefits of quality company secretarial services?
A company secretary has a wide range of responsibilities but the core ones can be broken down as follows:
The company secretary will normally maintain the company’s statutory registers including the register of members. This is the document that ultimately determines who owns the company. It’s not the share certificate, a contract or the records at Companies House that determine this, but the register of members. There have been numerous occasions where poorly maintained records have lead to confusion as to the ownership of a company sometimes with disastrous consequences.
A good company secretary will be there to advise the directors on the key aspects of company law. This will generally include the requirements for declaring a dividend; issuing new shares or taking different decisions. Without this advice, the actions of the directors may be invalid or quite possibly illegal and criminal in nature.
Good corporate governance is key to ensuring that the company runs as it should and the interests of the shareholders are properly protected. Professionally delivered company secretarial services will ensure that the directors decisions and their engagement with the shareholders is run, not just legally, but as a matter of best practice.
The company secretary will often be in charge of the company’s records. In smaller and less developed companies these can often be left to chance with the unfortunately consequence that the company relies on the (fading) memory of one or two individuals rather than well maintained records.
The role of company secretaries varies hugely from company to company and they can often end up being a lot broader than the above, but irrespective of their eventual role their are inevitably key to the successful running of a company.