Appoint A Company Secretary
Appointing a company secretary is not just a statutory requirement for some companies, but it also brings substantial benefits in maintaining corporate governance and managing administrative taste.
A company secretary is responsible for duties like maintaining company records and supporting the board of directors in fulfilling their duties.
While appointing a company secretary might seem straightforward, several legal requirements make professional guidance in these matters invaluable. As such, a corporate lawyer can help you understand your obligations and the specific duties of the company secretary within your business.
At Lawhive, we combine the power of technology with the expertise of a regulated law firm to offer high-quality legal services services at a fraction of the cost of traditional high-street law firms.
Our network of experienced corporate solicitors is on hand to provide comprehensive support and guidance through the process of appointing a company secretary, and beyond should you need it.
Contact us today to schedule a free case evaluation and get a no-obligation quote for our company secretary appointment services. With Lawhive, you can appoint a company secretary with confidence, knowing that you have expert legal support at every step of the way.
What is a company secretary?
A company secretary is a senior administrative officer responsible for ensuring that a company complies with legal obligations and maintains high standards of corporate governance.
Though not required for all companies, the role of a company secretary is important in many businesses, particularly public companies and larger private companies.
What are the legal requirements for appointing a company secretary?
Private companies
Appointing a company secretary is optional for private companies unless required by the company’s articles of association.
If the articles do not specify the need for a company secretary, private companies can still choose to point a company secretary to manage their administrative and compliance responsibilities if they wish.
Public limited companies
Public limited companies are legally required to appoint a company secretary.
The appointed secretary must be:
A member of a recognised professional body, such as the Institue of Chartered Secretaries and Administrators (ICSA);
A barrister, solicitor or advocate in the UK;
An individual with previous experience as a company secretary in another public company;
Someone who appears capable, through their qualifications or experience, of performing the functions of a company secretary.
Do all companies need to appoint a secretary?
The requirement to appoint a company secretary varies depending on the type of company and its specific governance needs. Here’s an overview of the legal requirements and practical considerations for appointing a company secretary in the UK:
Company Type | Legal Requirement | Considerations |
Private companies limited by shares of guarantee | No legal requirement. | The company’s articles of association might stipulate the need for a company secretary. If they do, the company must comply. |
Sole traders and partnerships | No legal requirement. | N/A |
Public limited companies | Legally required to appoint a company secretary by the Companies Act 2006. | The appointed company secretary in a PLC must have the necessary qualifications or experience to fulfill their role effectively. |
What are the primary duties of a company secretary?
The duties of a company secretary include:
Managing the filing of statutory documents with Companies House, including annual returns, confirmation statements, and changes in the company’s structure or officers;
Maintaining accurate and up-to-date statutory registers;
Providing guidance on corporate governance practices;
Preparing and distributing agendas for board meetings;
Attending board meetings to take minutes and record decisions;
Overseeing the maintenance and safekeeping of the company’s official documents and records;
Managing the company’s official correspondence with regulatory bodies, shareholders, and other stakeholders;
Ensuring that the company’s registered office address is properly maintained;
Organising general meetings and extraordinary general meetings;
Managing shareholder communications, including the distribution of dividends, annual reports, and other important information;
Overseeing the maintenance of the share register;
Ensuring the company meets its financial reporting obligations;
Assisting in managing corporate actions, such as share issues, dividend payments, and restructurings;
Acting as a liaison between the board of directors and stakeholders.
Can a director also serve as company secretary?
In private companies (limited by shares or guarantee) a director can also hold the position of company secretary.
However, it’s important to consider the practicality of one individual managing both roles and ensure that the director who also serves as company secretary has the necessary skills, qualifications, and time to fulfill the duties effectively.
In public limited companies, the roles of director and company secretary must be held by separate people. This reflects the need for higher governance standards and a clearer separation of responsibilities.
How do I officially appoint a company secretary?
The decision to appoint a company secretary typically requires approval from the board of directors first. Once the board has approved the appointment, you should then prepare a written contract or terms of appointment, which outline the company secretary’s duties, responsibilities, and terms of service.
After the appointment is confirmed, you must notify Companies House within 14 days. To do this, you should complete and submit the appropriate notification form.
Can a company secretary be a corporate entity rather than an individual?
Corporate secretaries often come from professional service firms that specialise in providing corporate governance and compliance services.
These entities typically employ teams of qualified professionals, including chartered secretaries and legal experts, who can provide expert advice and support.
Private companies in the UK are allowed to appoint a corporate entity, also known as a corporate secretary, as their company secretary rather than an individual.
Public limited companies can also appoint a corporate entity as their company secretary, provided the entity meets the qualifications and experience required to fulfill the role effectively.
When appointing a corporate entity as the company secretary, you must tell Companies House using Form AP04.
What is the process for changing or removing a company secretary?
Changing or removing a company secretary typically requires approval from the board of directors. This can be done during a board meeting by proposing a resolution to change or remove the company secretary.
If the company secretary is being removed or resigning, they should also be formally notified of the board’s decision. Then, once the change is confirmed, you must notify Companies House within 14 days by completing Form TM02.
If you are changing the company secretary and appointing a new one, you should follow the process as outlined in the official appointment procedure, including notifying Companies House of the new appointment using the appropriate form.
Can a company secretary be liable for company decisions or actions?
The primary liability for company decisions and actions typically rests with directors, however a company secretary can sometimes be held liable for:
Breach of statutory duties;
Breach of corporate governance codes;
Negligence;
Breach of fiduciary duties;
Vicarious liability;
Failure to comply with specific regulations (such as Market Abuse Regulations, GDPR, or employment law).
To mitigate the risk of personal liability, however, many companies provide Directors’ and Officers’ liability insurance, which can cover company secretaries. This type of insurance protects against claims arising from decisions and actions taken in official capacities.
How does the appointment of a company secretary affect small businesses?
Although not always legally required for small private companies, appointing a company secretary can provide lots of benefits that support the business’s growth and sustainability, such as freeing up time for directors and owners to focus on strategic decision-making and business operations.
Small businesses often need to balance the cost of appoinitng a company secretary with the benefits they bring. For many, the cost is justified by the value added in terms of compliance, governance, and operational efficiency.
What are the benefits of using a professional service for appointing a company secretary?
Professional service providers employ company secretaries with extensive knowledge of corporate governance, compliance, and administrative functions. They are often members of recognised professional bodies like the Chartered Governance Institute or have significant experience in similar roles.
By outsourcing the company secretary role, businesses can reduce the administrative load on their directors and senior management, allowing them to focus on strategic and operational priorities.
What’s more, professional services often provide company secretarial support at a lower cost than hiring a full-time in-house secretary.
What is the difference between a company secretary and a company administrator?
A company secretary is a senior officer within a company responsible for overseeing corporate governance, compliance, and administrative functions, while a company administrator (or office manager) typically handles the day-to-day administrative tasks that keep a company running smoothly.
The role of a company administrator is more focused on operational and clerical support rather than the governance and compliance responsibilities handled by a company secretary.
What should be included in a company secretary’s contract or terms of appointment?
A company secretary’s contract or terms of appointment should include:
The title of the position;
A detailed description of the company secretary’s duties and responsibilities;
The start date and duration of the appointment;
Provisions for renewal or extension of the contract;
To whom the company secretary will report;
A confidentiality clause;
Compensation, benefits, payment terms, and reimbursement of expenses;
Working hours and location;
Performance expectations and the process for evaluating performance;
Termination conditions and required notice period;
Severance pay or exit provisions;
Conflict of interest and non-compete clauses;
Indemnity and liability insurance clauses.
Lawhive offers expert legal support to help businesses draft comprehensive and tailored company secretary contracts. Our network of experienced corporate lawyers can draft or review company secretary contracts to ensure they are tailored to your specific needs.
Contact us today to schedule a free case evaluation and quote for the services of a specialist lawyer to draft or review your company secretary’s contract.
What are the risks of not having a company secretary in a company that requires one?
For companies that are legally required to appoint a company secretary, failing to do so can lead to penalties, including fines and sanctions from regulatory bodies. In some cases, the board of directors could be held personally liable for the company’s failure to appoint a company secretary.
Additionally, without a company secretary, a company may struggle to meet its statutory filing and reporting obligations. Failure to file these documents on time can result in late filing penalties from Companies House, which can build up and impact the company’s financial position.
Can a company secretary be an employee of the company, or must they be independent?
In many companies, particularly small to medium-sized enterprises and private companies, the company secretary is often an employee of the company.
However, larger companies, public limited companies, or those with more complex governance needs may choose to appoint an independent, external company secretary to leverage their expertise, impartiality, and flexibility.
When a company secretary fails to perform their duties, it can lead to significant legal, operational, and financial consequences for the company and potentially the company secretary themselves.
Consequences for the company can include:
Penalties and fines from regulatory bodies such as Companies House;
Being struck off the register;
Regulatory scrutiny and sanctions;
Reputational damage and loss of investor confidence;
Breaches of legal obligations under the Companies Act 2006;
Operational disruptions;
Legal disputes and litigation;
Erosion of stakeholder trust.
Consequences for company secretaries themselves can include:
Being held personally liable for penalties or damages resulting from their failure to fulfill their statutory or fiduciary duties;
Disciplinary actions from professional bodies, including revocation of professional memberships;
Termination of employment on the grounds of gross misconduct or negligence.
Get expert help with appointing a company secretary from Lawhive
Appointing a company secretary is an important step for many businesses. Whether you’re a small private company trying to understand the basics of statutory requirements or a large public company dealing with complex governance frameworks, having the right support can make all the difference.
At Lawhive, our network of experienced corporate lawyers offers tailored services designed to help you appoint a company secretary who will enhance your governance and compliance capabilities.
Expertise and professionalism
Our network of corporate lawyers has extensive experience and deep knowledge of company law, corporate governance, and compliance.
They provide expert advice and guidance to ensure your company appoints a qualified and effective company secretary.
Comprehensive support
From drafting and reviewing the company secretary’s contract to providing ongoing governance and compliance support, Lawhive offers a full suite of services to manage every aspect of the appointment and performance of your company secretary.
Cost-effective services
At Lawhive, we combine the expertise of a regulated law firm with the efficiency of a tech-driven platform, offering high-quality legal services at a fraction of the cost of traditional high-street firms.
Our transparent pricing means that you receive exceptional value without compromising on the quality of support, with no hidden costs in sight.
Contact us today to schedule a free case evaluation and discover how Lawhive can help you appoint a company secretary who will support your business’s growth, compliance, and governance needs.