A company secretary is usually appointed to reduce the workload of directors by assisting them with their day-to-day management duties and responsibilities. Whilst they remain mandatory for public limited companies (PLCs), the Companies Act 2006 abolished the requirement for private companies to appoint one, unless their articles of association states otherwise.
The secretary of a private limited company does not need any formal qualifications, but they must be suitably competent and knowledgeable to bear such a high level of responsibility. PLCs are legally required to have an appropriately qualified secretary at all times.
If a company secretary fails to effectively carry out their statutory duties, the directors can be held personally accountable for these shortcomings because, ultimately, legal responsibility falls upon company directors.
What does a company secretary do?
Whilst the Companies Act 2006 does not set out the formal duties of a company secretary, typical responsibilities include:
- Ensuring the company is managed in accordance with the Companies Act 2006 and the articles of association
- Maintaining statutory company records and registers, including a PSC register
- Making company records and registers available for public inspection at the registered office address or SAIL address
- Notifying Companies House about changes to the company’s registered details
- Preparing and filing annual confirmation statements (previously called an annual return)
- Maintaining accurate and up-to-date accounting records
- Monitoring the financial position of the company
- Preparing and filing annual accounts
- Notifying the directors and shareholders of any financial problems or discrepancies
- Preparing and filing Company Tax Returns
- Paying Corporation Tax.
- Registering the company for VAT, if and when required
- Managing PAYE and payroll
- Arranging board meetings and general meetings
- Notifying relevant parties about meetings
- Arranging or taking minutes of meetings
- Distributing minutes to those who are entitled to receive them
- Maintaining company stationery
- Signing internal contracts and prescribed documents on behalf of the company and its directors
- Maintaining possession of the company seal
- Issuing share certificates
- Filing resolutions with Companies House
- Maintaining copies of minutes and resolutions
- Appointing an auditor, accountant or solicitor, if required
Do I need to appoint a company secretary to register a private limited company?
No. The appointment of a secretary is optional for all private limited companies incorporated after 8th April 2008, unless the articles explicitly states the requirement of a secretary. This provision can be added or removed from the articles at any time by the shareholders.
What is the difference between a company secretary and a company director?
A director is ultimately responsible for ensuring the company is managed lawfully and meets all statutory requirements, but secretaries can still incur personal responsibility if they fail to comply with the requirements of the Companies Act.
Directors have the power to appoint and remove secretaries and decide which duties to delegate. Therefore, whilst directors and secretaries may interchangeably carry out the same duties, directors are ultimately liable for these responsibilities and can be held personally accountable if the secretary fails to uphold their statutory duties.
Who can and cannot be a company secretary?
The secretary of a private limited company can be an individual person, including a director or shareholder. This role can also be held by another company or organisation, the firm’s accountant or solicitor, a professional chartered secretary, or a company that provides administrative services.
A secretary may not be the company auditor, any employee of the auditor, or any person who is an undischarged bankrupt or disqualified director.
Can a director also be the company secretary?
Yes. There are no statutory restrictions that prevent a director from also holding the position of company secretary. However, because a secretary is usually appointed to reduce the workload of directors, there is not a great deal to be gained in practice from a director also being the secretary, especially if the company has only one director.
Furthermore, certain documents that require the signatures of two people cannot be signed by a sole director and a secretary if these roles are held by the same person.
Can a shareholder also be the company secretary?
Yes, a shareholder can also be the secretary of a company, provided they are at least 16 years old, are not the company auditor or employee of the auditor, and have not been declared bankrupt or disqualified as a company director.
How to appoint a company secretary
A company secretary can be appointed by a resolution of the board of directors or by the members, following receipt of a letter of ‘consent to act’ from the prospective person. Thereafter, Companies House should be informed of the appointment as soon as possible on Form AP03, which must include the following:
- Date of appointment
- Title, full forename(s) and surname, including any former name(s)
- Service address – residential or other
- Signature of new secretary and a director
This information can be submitted online through WebFiling or 1st Formations’ free Online Company Manager.
The secretary’s details will be placed on public record and added to the company’s statutory register of secretaries. Therefore, a residential address should not be used as a contact address if the secretary wishes to keep this information private.
How to remove a company secretary
A secretary can be removed from a private limited company at any time by a simple majority vote of the directors or by ordinary resolution of the members, subject to any service contract in force. Likewise, a secretary may resign by giving notice in writing, subject to the terms of their service contract.
- Directors must approve a resolution to remove a secretary – this can be done at a board meeting or by written resolution
- Record the removal or resignation in the company’s statutory register of secretaries
- Notify Companies House on Form TM02 within 14 days of the removal or resignation. This can be delivered online via WebFiling or 1st Formations’ free Online Company Manager.
- If applicable, notify the bank that the secretary is no longer an authorised signatory on the business bank account
- Appointed a new secretary at any time, if required
What secretary details are displayed on public record?
All details registered at Companies House at the time of a secretary’s appointment will be displayed on public record – full name, service address, and date of appointment. For this reason, many secretaries do not use a private residential address as their service address.