The Abolition Of The Company Secretary

Abolishing the role of company secretary is a government initiative to reduce the red tape and administration for companies. But will it?

Since 6 April 2008 under the Companies Act 2006, private limited companies are no longer obliged to appoint a company secretary except where the company’s Articles of Association specifically require or assume such a position. These Articles can be amended to remove such provisions.

The role of the company secretary varies, but generally speaking the secretary acts as the chief administrator for the company ensuring, amongst other things, that documents are filed at Companies House and the statutory books are up to date. Whilst under the new law the position of company secretary is no longer mandatory their duties still need to be carried out and have now become the responsibility of the directors.

These duties should not be underestimated. Miss a couple of deadlines and a company can face substantial fines and find itself struck off. So retaining the company secretary position will, in most cases, take the pressure off directors and leave them to concentrate on running the company.

In addition if a company is looking for investment or the shareholders are gearing up for a sale it is vital that all returns and the statutory books are up to date, not least because it gives potential investors or buyers the impression of a well run company.

The law relating to how a company can validly execute a document has also changed. A company can now execute a document by affixing its common seal or, by the signature of two authorised signatories (i.e. two directors or one director and the company secretary) or by a director in the presence of a witness.

This is particularly useful where it is inconvenient to get two directors or a director and company secretary to execute a particular document at any one time.

If a company has more than one director, the company’s Articles of Association can be changed to protect the company from the solitary acts of one director. This ensures that, as was the position prior to 6 April 2008, two directors or a director and secretary are required to execute certain types of document.

Companies are therefore strongly advised to retain or adopt a fully comprehensive registered office address and company secretarial service. Usually the service provider has a nominee company which becomes the company’s secretary and takes on the responsibility for things such as ensuring the company’s annual return is submitted in time and the statutory books are kept up to date.

For more information on the abolition of the company secretary or the company secretarial service offered at Foot Anstey please contact Rebecca Diebner at rebecca.diebner@foot-ansteys.co.uk or (01392) 685225.

Published 29/05/2008.