A company secretary is a senior official in a company. The company secretary directly helps and supports the Company’s board and directors and has a general obligation to assist a company to comply with its legal obligations. A company secretary’s responsibilities are contained within the Corporations Act 2001 (Cth) (Corporations Act).
Does a company secretary have to be qualified?
There are no strict legislative requirements for a company secretary, except that the secretary must be over the age of 18 and a natural person (a human). There are certain people that are disqualified from managing a company, and these people are unable to be appointed as a company secretary, unless they have received prior approval by either the Australian Securities and Investments Commission (ASIC) or a Court. A person who has been disqualified from managing a corporation under the Corporations Act Part 2D.6 is disqualified from being a secretary. Under Part 2D.6 of the Corporations Act, a person is disqualified from managing a company (and being a company secretary) if they have convicted of a crime of dishonesty (i.e. fraud) which is punishable by imprisonment for a period greater than 3 months, have been convicted of a crime under the Corporations Act that is punishable by imprisonment for a period of greater than 12 months or are bankrupt.
Many companies are now looking for secretaries with a legal background, given that a secretary helps to ensure that the company abides with its legal obligations. many educational institutions offer courses in governance, which provide individuals with information and qualifications to handle the duties of being a company secretary.
Company secretary roles require skills such as time management and professional communication.
A public company must have at least one company secretary under section 204A(2) of Corporations Act. The company secretary must live in Australia.
Do I need a company secretary?
The size of your organisation will determine whether your business needs a company secretary. If your business is relatively small, then it is unlikely you require an appointed company secretary. However, it is important to note that if a company does not have a secretary, then the duties and responsibilities of a secretary are then passed to the directors of that company.
What are the duties of a company secretary?
Traditionally, the duties of a company secretary were administrative. However, this has changed overtime. Now, companies have increased the responsibilities required of a company secretary.
Under the Corporations Act, a secretary is an ‘officer’ of a company. As a result, a company secretary must abide by the Director’s Duties under the Corporations act as outlined in Sections 180 to 184 of the Corporations Act. Examples of these duties are:
- (Section 180) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:
- (a) were a director or officer of a corporation in the corporation’s circumstances; and
- (b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.
- (Section 181) A director or other officer of a corporation must exercise their powers and discharge their duties:
- (a) in good faith in the best interests of the corporation; and
- (b) for a proper purpose.
In conjunction with these statutory Director Duties, a company secretary has specific administrative tasks that they must complete. These tasks are outlined in the Corporations Act. Some examples of what a company secretary is responsible for include:
- Maintaining a registered office (Section 142);
- Keeping the registered office of a public company open to the public (Section 145);
- Lodging and keeping annual returns (Section 345); and
- Lodging notices with ASIC (Section 205B).
How do you appoint a company secretary?
The Corporations Act provides for requirements when appointing a company secretary. Under Section 204D of the Corporations Act, a company secretary must be appointed by the directors of the company. Directors may determine the renumeration of the company secretary (Section 204F) and the terms and conditions of the company secretary’s role.
ASIC must be notified of a company secretary’s appointment within 28 days of the appointment to this role using ASIC Form 484. You can submit this form online through ASIC, or learn more about appointing a company secretary here.
A company secretary must give the directors a signed consent to act as a secretary document before their appointment. This is a legal document kept by the company in its company register. It is an offence under Section 204C if a company fails to obtain, or keep, the consent to act form.
Can a company secretary resign or retire?
A company secretary can be removed from their position by resolution of the directors of the company. Alternatively, a company secretary may resign or step down from their role with the company.
Typically, a company constitution will have provisions which detail the process of resignation or retirement of the company secretary. If the constitution does detail a procedure, this provision should be strictly adhered to.
If there is no set procedure in the company constitution, the following should be followed:
- The secretary should produce a written note of resignation to the company. Often a company will require a resignation letter which contains a clause that confirms the secretary does not intend to bring any claims against the company or directors. A company or secretary can submit an ASIC Form 370 “Notification by Officeholder of Resignation or Retirement” to ASIC. However, the company must still lodge an ASIC Form 484 (see point 2 below).
- The company must notify ASIC. The company must lodge an ASIC Form 484 “Change to Company Details” within 28 days of the resignation or retirement.
It is important for the company to remember to notify any relevant third parties and their relevant bank that the secretary is no longer with the company to ensure that they cannot access these third parties or the bank accounts on behalf of the company.
Can a company’s directors remove a secretary?
A company’s constitution will likely have a provision dealing with the process to remove a secretary.
If there is no procedure, the following should be followed:
- The directors should pass a resolution to remove the secretary. The resolution to remove the secretary should be signed and documented.
- The company should notify ASIC. The company must lodge ASIC Form 484 “Change to Company Details” within 28 days of the date of removal.
If you need more information regarding company secretaries, or would like a company constitution or consent to act form for a fixed fee, contact the Bolter Team here.