Company secretaries are important professionals that play instrumental role for organizations. They are primarily responsible for ensuring that the organization is in compliance with the all the legal practices and is obliging with the necessary financial regulations. A company secretary takes care of maintaining good standing when it comes to corporate governance.
That’s why it’s crucial to only appoint a company secretary who has good understanding and knowledge of current corporate laws; ignorance of which may land the company in jeopardy.
Think of a company secretary as the point of interaction or the liaison between the shareholders, board of director, and the company itself. You need to communicate with these professionals to talk about anything related to company procedures and new developments.
A company with an extra executive management level will have the company secretary act like the point of communication between the executive level management and the board of directors.
Law requires every public limited company to have a company secretary. But, the same does not apply to private companies even though many of them do have secretaries. Almost all sectors and industries have company secretaries but you will particularly find them in non-for-profit sector and public companies.
In some companies, people carrying out the same responsibilities as that of a corporate secretary may be labelled differently. In some companies, they may have job titles like ‘head of democratic service’ or the ‘head of governance’. The idea behind these job titles is to better reflect/communicate their role in the organization.
What are the responsibilities of a company secretary?
Company secretaries work with the board of directors and usually report to the chairperson directly. This offers them the opportunity to provide advice and guidance on matters of agreement with the law and governance at the very top of the company.
The role of a company secretary covers a range of functions and specific tasks within the company. And it depends on the type and size of the company. Here are some of the most common tasks that they cover in their role:
The time taken by the company secretary to liaison between shareholders and members of the board as well as compliance responsibilities depends on the type and size of the company. For example, a large publicly traded firm has a large number of shareholders, so it can be very time-consuming to monitor and manage the register of the shareholders, pay dividends and manage share option schemes, and take a role in share issues, mergers, and takeovers.
In short and simple words, the work of a company secretary in a publicly listed company will be more specialized than in a smaller private company.
Here are some responsibilities that companies’ secretaries have to undertake within small businesses:
The role of a company secretary is mainly office based. Company secretaries generally work during the official office hours, although they need some flexibility. It may be necessary to work longer hours to accommodate lengthy meetings and to complete reports, such as the company Annual Report for meeting regulatory deadlines.
If you are running only a small business, then you don’t need to appoint a full-time secretary for it. For the role of a company secretary, you have the choice to employ a self-employed person on a freelance basis or to hire a person available on the part-time basis. For professional people who are running a sole private business including solicitors and chartered secretaries, this is a very common practice. Chartered secretaries are the people who are qualified via ICSA (Institute of Chartered Secretaries and Administrators). They provide the same services as found in larger organizations.
Do I need a company secretary in my private limited company?
The simple answer is: No. As a private limited company, you do not need to have one. As per the Companies Act 2006, since April 2008, it is no longer a legal necessity for private limited companies to appoint the company secretary, unless their articles of association demands so. Most of the private limited companies can manage their all tasks properly without having one.
Even if your article of association requires having a company secretary, it is relatively straightforward for the directors of a company to amend the provision. However, although there is no requirement for private companies to hire a company secretary, in practice many still choose to do so. The important tasks that would normally fall to a company secretary, including shareholder administration and communication, corporate governance and statutory compliance must still be done.
When there is no company secretary, the directors of the company must take on this responsibility. As a result, it is very important for a company to appoint a dedicated company secretary to manage all such matters easily. Many private limited companies continue to employ a company secretary in order to reduce the administrative and corporate governance burdens otherwise placed on their directors.
If you are not sure whether your company needs to have a company secretary or want some expert guidance on the same topic, then you can talk to our professional team at ZDK Formations. We will be more than happy to advise you anytime.
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