Q: I am starting my own company providing risk management solutions. I have been advised to hire a company secretary. I am aware of the role, but not sure that I need to hire one that right away?
A: Whether you need one at all will depend on the size of your company and the duties allocated to your staff members and the duties the directors assume. It is no longer a requirement to appoint a company secretary for a private company in England and Wales (CA 2006 s270).
However, although you do not need to employ a company secretary by law, the tasks usually allocated to a company secretary do need to be executed in an efficient manner whether you employ a company secretary or not.
Company secretary obligations include, but are not limited to:
- Filing annual returns
The company secretary usually takes on the responsibility of completing and filing the annual confirmation statement, along with various other returns such as the yearly accounts and director’s reports.
- Maintaining statutory books
The company secretary is often responsible for maintaining the company’s statutory books and records which is often a time-consuming task; because of this some companies tend to neglect to keep the registers up to date. This is not a good idea, as failure to do so can incur a fine of up to £5,000.
- Organising board meetings
An additional duty of a company secretary is to arrange board, shareholder and general meetings, including the AGM (Annual General Meeting). The company’s articles of association will determine the recognised prerequisites for organising meetings however it is the duty of the company secretary to make sure meetings comply with the notice requirements, as well as take minutes and file and update the records after the meeting if necessary.
The exact nature of a company secretary’s’ duties will depend on the company. For example working for a PLC (it is obligatory for Public Limited Companies to appoint a company secretary) the secretary will have a lot more responsibilities than if he were to work for a small private company.
Until your company gets off the ground, it is probably not in your best interests to have a company secretary on your payroll, because there is a way to take advantage of retaining the services of a company secretary without actually employing a person for the position within your company. The ideal solution in your position would be to contract a firm that offers company secretary services.
The contracted company will appoint a company secretary to your account, who will perform the same duties as an in-house company secretary. This is usually an excellent solution for start-up companies as the role of a company secretary needs to be undertaken by a skilled professional, and employing such a person requires a substantial financial outlay, which may not be economically ideal for you as a company owner during the first years of trading.