Role of company secretary: Why you need one for your business?

When we think of a company secretary, we picture a person answering calls and managing appointments. However, responsibilities of a company secretary include lot more than this. Considered an officer of an organisation, he shares several legal duties with company directors. It is his responsibility to file annual returns and other documents, usually on an annual basis. Besides, he is responsible for scheduling board meetings as well as other internal administrative matters.

Considering the heavily administrative nature of the role played by a company secretary, it is needless to say that the professional you choose should be motivated, organised and should be well versed with the internal working of your organization, and its legal duties.

Apart from filling annual returns, a company secretary takes charge of director’s reports. This includes a document containing the state of the company, along with the names of the secretary and director approving the accounts. This document is filed annually and all the financial statements, along with the details of the company’s liabilities and assets are included. Besides, the company secretary is also responsible for filing auditor’s reports, but that would be needed if your business’ annual turnover is more than a specific amount that depends on the location of your business.

The other duties of company secretary include:

Maintaining the company’s registered office

This is necessarily not the address from which the company actually operates. It is company secretary’s responsibility to ensure that you receive all correspondence sent to that address. He needs to make sure that the registered name of the company clearly appears outside the registered office and other places of business. Any change in company’s registered address is informed to ASIC by the company secretary.

Taking care of important legal documents

Legal documents include constitution, share certificate and share transfers, any certificates related to the change of name, the company’s seal and director’s service contracts. All these documents have to be carefully taken care of by the secretary.

Maintaining the company’s statutory needs

It includes minutes of general and board meetings, a register of shareholders, a register of directors, any charges applicable to the company’s assets as well as a register of debenture holders. It is the duty of Company Secretary to look after all statutory needs and ensure everything is in place.

Informing important changes

ASIC needs to be informed when certain changes are made in the company. This includes allotment of new shares, change to the make-up of the board of directors and more. When such changes are made in the company, it is the duty of company secretary to inform the ASIC about the same.

What other ways can a company secretary serve your business?

Be it a full time or part time Company Secretary, he plays an important role in effective administration of business. Particularly, his duties include scheduling board meetings and ensuring that precise minutes of meeting are taken as well as signed. Besides, he is also responsible for arranging Annual General Meetings (AGM). Although such meetings are no longer needed for privately listed companies, they are required if a company has traded shares.

When appointed in smaller companies, the secretary takes on some additional responsibility for things such as PAYE and payroll, GST registration, pensions, taking care of company’s offices and legal matters. Besides, he has to take responsibility for signing off documents, such as those related to accounts and leases, on board’s behalf.

A company secretary is an important part of a company, whether large or small. The duties performed by him can help a business grow. Companies that cannot afford services of a full time secretary can opt for part time company secretary services. Professionals offering such services perform duties of a full time secretary, but charge relatively less for the same.

For any company appointing a secretary, it is important to provide him some training and advice to help him understand the duties involved in the role.

Feb 26 2016

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Understanding the duties of a Company Secretary

Holding a senior position in a public or private sector organization, a Company Secretary is responsible for effective administration of a firm, particularly in terms of ensuring adherence to statutory and regulatory needs and to ensure implementation of decisions taken by the Board of Directors.

It is the duty of a Company secretary to ensure that the company adheres to relevant regulation and legislation, informing the board members about their legal responsibilities. Serving as names representatives on legal documents for a company, they make sure that the organization, as well as the directors, function within the law. Their duty requires them to register and interact with stakeholders to ensure payment of dividends and to maintain records of an organization, such as lists of shareholders and directors, along with annual accounts.

Appointing a company secretary is a law in many countries that the private companies have to comply with and the chosen professional usually becomes a senior board member. According to Companies Law, only a listed firm is required to have a full time secretary while a single member company that is not a public company needs to appoint a secretary.

Functions of a Company Secretary

Duties generally performed by a Company Secretary include:

Secretarial Functions

The wide set of responsibilities undertaken include:

  • To make sure that the rules and bye-laws of a company are strictly adhered to
  • To ensure that company’s affairs are managed as per its objects described in the articles of association and provisions of companies law
  • To prepare the agenda after discussion with the Chairman and on the basis of other documents for all meetings of the Board of Directors
  • To attend board meetings to ensure all legal needs are met, and to provide necessary information
  • To arrange annual and extraordinary meetings for an organization, with the consultation of chairman, and attend the same to ensure adherence to legal requirements and to maintain accurate record thereof.
  • To arrange and hold meetings of the board and to prepare accurate records of proceedings
  • To deal with the matters related to allotment of shares and issue of share certificates, including maintenance of statutory share register and conducting relevant activities related to share transfer.
  • To prepare, approve and seal lease agreements, legal forms, along with other official documents on company’s behalf, after they are authorized by Board of Directors or the executive responsible.
  • To advise on legal matters, in conjunction with company solicitors, to the chief executive as and when required.
  • To defend the rights of an organization in Courts of Law.
  • In addition to secretarial functions, a Company Secretary performs legal duties, including:

  • Filling of returns and documents as needed by the Companies Law
  • To ensure legal requirements for allotment, issue and transfer of share certificates, mortgages have been adhered to
  • To arrange meetings of directors, as needed
  • To inform each director of the company about the agenda of board meetings
  • To record minutes of proceedings of meetings
  • To ensure accurate implementation of policies formulated by the directors
  • To deal with and maintain correlation between the company and shareholders
  • To inform the shareholders about the agenda of meetings
  • To handle payment of dividend within stipulated time as stated by the Companies Law
  • Indubitably, company secretary services are vital for any company, regardless of its size. Even though a Company Secretary enjoys certain rights and power, depending on the terms of his contract with the company, there are some restrictions to his power, such as:

    Distribution and transfer of shares

    A Company Secretary does not hold the right to distribute or transfer any share if he is not authorized to do so by the Board of Directors.

    Duty as company agent

    He cannot be a part of any meeting as a company agent without the approval of Board of Directors. He would need their consent to sign any contract for the company.

    Loan

    He cannot take loan in the name of the company and if he does so, the company does not take any responsibility for it.

    The duties performed by a Company Secretary are manifold. He is one of the most important professionals in a company. Many firms have the confusion of choosing between full time and part time company secretary services. Each option comes with its own set of advantages and disadvantages. Consider your needs and preferences prior to making the final decision.

    Feb 5 2016

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