When you establish your limited company, you’ll appoint a director, and in some cases, nominate a company secretary. Bringing a secretary on board can help alleviate directors’ tasks, although it’s not always compulsory to have one.
Whether it’s mandatory or not will depend on what type of limited company you have – private, or public. We’ll take a look at who needs a company secretary as well as the difference between being private or public.
Do all limited companies need a secretary?
The answer to this question varies. According to section 270 of the Companies Act 2006 you don’t need a company secretary for a private limited company, unless the articles of association require you to appoint one.
It’s different if you operate a public company, which does need to appoint a company secretary. Section 271 of the Companies Act 2006 literally, word-for-word, reads “a public company must have a secretary.”
What’s the difference between a private limited company, and a public limited company?
Private limited companies are the most common type of company to be incorporated in the UK (meaning most limited companies don’t require a company secretary). They’re ‘private’ because they’re owned by private shareholders who have invested in the business, rather than being listed on the stock exchange.
In a public limited company there are still directors and shareholders, but the company is listed on the stock exchange and anyone can buy shares.
There are other major differences between the two types of company. For example, a public company must have a minimum of £50,000 in share capital, whereas no minimum is required for private companies. If you’re just starting out on a small scale, it’s highly likely you’ll setting up be a private limited company!
Read more on the differences between a Private and Public Limited Company.
What is a company secretary?
Company secretaries are seen as ‘officers’ or the ‘head of governance’ of the company and are crucial members of the management team. They’ll typically spend their time ensuring the company is operating within all financial, legal, and statutory regulations. In most cases, they’re the ones shareholders will come to – as well as being responsible for administration duties.
If you’re a private limited company that doesn’t require a secretary and chooses not to have one, the responsibilities that would usually fall on a secretary belong to the director – or a person ‘authorised generally, or specifically in that behalf by the directors’. Because of this, you’ll find many private companies opt for a company secretary anyway to take some of the workload off the directors.
What are the main duties of a company secretary?
Company secretaries have lots of duties and are a vital part of any business. Here are some of their key responsibilities:
- Administration duties as well as filing confirmation statements and Company Tax Returns
- Looking after the company’s statutory records
- Setting up and being responsible for all directors’ and shareholders’ meetings
- Letting Companies House know if any company details have changed (for example the company address or following the resignation of a director)
- Managing the registered office address (this involves informing Companies House of the registered office address as well as checking it is correctly disclosed on the website, emails, etc)
- Make sure the business is compliant with all legal, financial, and statutory regulations
- Keeping all legal documents safe
- Being the communication point for shareholders
- Signing any legal documents
It’s worth noting that even though a secretary has lots of responsibility, the director of the company is always legally responsible for anything that happens.
What is the main difference between a company secretary and a director?
While the role can feel very similar, a director will be responsible for the overall management of the company, while the company secretary will focus more on administrative duties.
Should I hire a secretary for my limited company?
If you’re a private limited company, a company secretary could help with any tasks your director doesn’t have the time to do. While it’s not a legal requirement, it is an option that many companies take.
You will need to ensure you appoint someone appropriate for the role according to HMRC’s guidelines though. For example, they can’t be an ‘undischarged bankrupt’, or be the company’s auditor.
You’ll need someone with excellent communicative and administrative skills that can really hold the company together while the directors and shareholders run the other tasks. A secretary is the secret backbone doing all the ‘behind the scenes’ bits for your business!
How do I appoint a secretary?
You can appoint a secretary online via the GOV website, or by filling out paper forms (APO3) – it will take longer to complete if you send them through the post, and your business cannot use this method if your company is in the protected online filing (PROOF) scheme.
If you need to remove a company secretary, you’ll need to let Companies House know within 14 days from the date of removal (this is the same time period for appointing a secretary too). If any of your secretary’s details have changed, you’ll need to file form CH03 to Companies House.
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