duties of a company secretary - dsc.org.uk · duties of a . company secretary. london. 17 july...

Duties of a Company Secretary

London17 July 2018

Facilitator: Alan Clarkin1

Objectives for the day

By the end of the day participants will:• understand the role of the company secretary• know the legal requirements relating to

Companies House and Charity Commission filings.

• Understand the typical tasks of the company secretary

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Structure• Overview• Introduction to roles• Filing and reporting• Articles, members and General Meetings• Boards, directors and meetings• Other roles and responsibilities• Hints and tips• Resources

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OverviewWhat is a Company Secretary?

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What is a Company Secretary?

In pairs or small groups please consider:

1. What are the principle roles of a company secretary?

2. What are the qualifications/requirements to be a company secretary?

3. What are the qualities required of a company secretary

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The Company Secretary Role

The company secretary is a strategic position of considerable influence at the heart of governance operations within an organisation.

ICSA The Governance Institute

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The Company Secretary

- is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the board of directors are implemented.

Institute of Directors

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In reality

• Complying with company and charity law• Supporting the board and its members• Managing the membership• Overseeing meetings and facilitating the

process of meetings• Handling membership issues• Helping the charity to be effective and

efficient

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Qualifications

No formal qualifications necessary – Unless Public Limited Company (Plc) where

company secretary must have formal qualification or have experience

• May be paid or unpaid role

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Is responsible for:

• the efficient administration of a company

• ensuring compliance with statutory and regulatory requirements

• ensuring that decisions of the board of directors are implemented.

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• Company secretary is an “officer” of the company responsible for statutory compliance under Companies Act 2006

• Shares legal responsibility with company directors

• Does not have a right to attend meetings

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Introduction to the role

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Roles

• report to the chairman and often liaise with board members

• organise and prepare agendasand papers for board meetings, committees and annual general meetings (AGMs)

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Roles

• take minutes, • draft resolutions, • follow up on actions from

meetings

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Roles

• lodge required forms and annual returns with Companies House and the Charity Commission

• maintain statutory books, including registers of members, directors and secretaries

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Roles• monitor changes in relevant legislation and

the regulatory environment and take appropriate action

• liaise with external regulators and advisers,such as lawyers and auditors

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Roles• oversee policies, making sure they are kept up

to date and referred to the appropriate committee for approval

• take responsibility for thehealth and safety of employees

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Roles

• manage office space and property as well as deal with personnel administration

• oversee and renew insurance cover for employees, equipment and premises

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Roles

• develop and oversee the systems that ensure the company complies with all applicable codes, in addition to its legal and statutory requirements

• contribute to meeting discussions as and when required, and

• advise members of the legal, governance, accounting and tax implications of proposed policies

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Roles

• deal with correspondence, collate information and write reports,

• ensure decisions made are communicated to the relevant company stakeholders

• monitor the administration of the company's pension scheme – (may be a requirement in some smaller companies)

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Roles• enter into contractual agreements with

suppliers and customers• oversee public relations and aspects of

financial management.

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Non charity roles

• pay dividends and manage share option schemes

• take a role in share issues, mergers and takeovers

• maintain the register of shareholders and monitor changes in share ownership of the company - in a publicly listed company

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Filing and reporting

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Know the legal requirements relating to Companies House

and Charity Commission filings

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The law

What are the principle laws relating to your role regarding filing and reporting ?

What do you have to send, to whom and when?

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The Law

• Companies Act 2006• Charities Act 2011

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Laws

• The Charitable Incorporated Organisations (General) Regulations 2012

• The Small Business Enterprise and Employment Act 2015

• The Companies (Disclosure of Address)Regulations as amended by the Register of People with Significant Control Regulations 2016

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Laws

• Company Directors Disqualification Act 1986• Mental Health Act• Small Business, Enterprise and Employment

Act 2015

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Companies House

Annual Return

Annual Report (with accounts)

Event driven filing

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Companies House –Annual Return

• Due date - within 28 days of the return date (based on last years return date)– Company details– Details of officers

Late filing penalties

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Companies House –Annual Report

• Within 9 months after financial year end• To include:

• Chairman’s statement• Report of the directors• Annual accounts• (Notice of AGM and agenda)• Auditors statement• (Statement of compliance with Corporate

Governance code)

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Companies House –Event Driven Filing

• Changes in officers of the company e.g. directors or company secretary – within 14 days

• Changes to governing document provisions e.g. name of organisation or objects – within 15 days of the change

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Charity Commission

• Annual Return

• Annual Report

• Event driven reporting

• Serious incident reporting

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Filing obligations – Charity Commission

What you report is based on the size and type of your organisation:• a company, a charitable incorporated

organisation (CIO) or an unincorporated organisation

• income for the current financial year• the value of assets• large enough to be registered as a charity with

the Charity Commission

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You need to know:• what type of accounts must be prepared• what information is needed in the trustees’

annual report • whether the accounts need an independent

examination or audit• what information must be sent to the

Commission

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• all charities must prepare accounts and make them available on request.

• all registered charities must prepare a trustees’ annual report and make it available on request.

• all CIOs (irrespective of income) and registered charities with a gross income exceeding £25,000 must file their accounts and an annual report with the commission.

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Types of accounts:• Receipts and payments

– Under £250k and not a company

• Accruals– All charitable companies– Non companies over £250k

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• £0 to £10K – update online

• £10k to £25k – submit annual return online

• £25k to £250k – submit annual return online with accounts and trustees’ annual report (external scrutiny required)

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• £250k to £1m (assets below £3.26m) – submit annual return on line with accounts and trustees’ annual report (external scrutiny required)

• Over £1m (or assets over £3.26m and over £250m income) – submit annual return online with accounts and trustees’ annual report (with external scrutiny and full audit)

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• 10 months after financial year end• Public benefit reporting • Event driven filings – Constitutional changes –

Serious incident reporting• Electronic filings

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Reporting Serious Incidents

A serious incident is an adverse event, whether actual or alleged, which results in or risks significant:• loss of your charity’s money or assets• damage to your charity’s property• harm to your charity’s work, beneficiaries or

reputation

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Record keeping –statutory registers (1)

• Register of directors (and directors’ home addresses) and company secretaries if any-past and present

• Register of members (and shareholding if relevant) – past and present

• Register of people with significant control since April 2016

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Record keeping –statutory registers (2)

• Any charges on the companies assets

• (Register of debenture holders)

• Minutes of meetings and copies of resolutions

• Register of directors’ interests in the company

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Record keeping –central register

• From June 2016, companies can maintain publicly accesable registers of members, directors (and directors’ residential addresses, secretaries, and people with significant control(PSC))

• Unanimous approval of members’ required for existing companies

• Conclusive evidence of meeting obligations• Available to companies registered under the

Companies Act only

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People with Significant Control

(Various provisions regarding share holdings)….

………. Otherwise having the right to exercise, or actually exercising, significant influence or control.

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Record keeping –other records

• Audit• Key legal documents (leases, mortgage deeds,

title deeds, contracts, etc)• Meetings and related matters

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Information Disclosure

• The company secretary is usually responsible for establishing and maintaining the registered office

• Display of registered name and other particulars• Charitable status disclosure (where income

exceeds £10,000)• Dealing with requests for inspection or copies of

company registers (be mindful of time limits, vexatious requests, and protected information!)

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Financial Reporting

• Charity SORP (statements of recommended practice) for accounting years starting on or after 1 January 2015

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Articles, members and General Meetings

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Constitutional compliance

• Compliance with governing document and charitable objects

• Management of matters relating to trustees/directors, members and PSCs

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Who are our members

• The subscribers to the Memorandum of Association and “every other person who agrees to become a member of the company, and whose name is entered in its register of members” (Section 112 Companies Act 2006)

• Procedure for admission is usually contained in the Articles

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Identifying members in practice

• Update the register – Look at past paperwork and minutes

• Be clear about the status• Do they have rights to vote at a general meeting?• Trustees as members

– Ensure appropriate appointments/resignations – Change the Articles to make automatic

• Charities Act 2011-power to determine who members are

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Members’ rights

The rights of company members include • To amend the Articles • Company meetings

– To require the calling of general meetings – To receive notice of, attend, appoint proxies for, speak

and vote at general meetings• To appoint (generally) and remove trustees • To appoint and remove auditors • To be sent the report and accounts

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General Meetings

• Needed if company wishes to dismiss a director or auditor before the end of their term

• 14 days “written” notice needed (subject to Articles)

• Access to accounts before filing (but not necessarily at the AGM.)

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General MeetingsMinutes

• Formal minutes must be taken • Minutes should be approved and signed by

the Chair of the meeting • These minutes become part of the official

record and can be requested by shareholders/members

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Preparing for a general meeting

• Notice – To all members– Venue, date and time– Special resolutions – Rights to appoint proxies

• Length of notice – “Clear days” – 14 day notice can be waived

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Conduct of general meetings

• Chair • Quorum • Voting rights • Voting majorities • Practical issues

– Quorum – Size of venue – Polls

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General meetings -Proxies

• Rights to appoint • Manner of appointment • Timing of appointment • Revocation of appointment • Rights of proxies

– Counted in the quorum? – What may they vote on?

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Modern voting methods

• Voting in advance • Remote attendance • Electronic voting

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Company Decisions

• A resolution is an agreement or decision made by the members, a class of members, or the directors of a company to carry out certain changes.

• This could include resolving to change the name of the company or to change its articles

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Resolutions

• Ordinary resolutions (decisions) may be passed by simple majority

• Special resolution by 75% majority of those eligible to vote (e.g. Change of name, objects etc)

• Special resolutions must be filed at Companies House within 15 days and at the Charity Commission

• Written resolutions, instead of resolutions at meetings, passed by members electronically or hard copy (but not to remove auditor or director)

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Alternatives to membership

• Distinguish between “company law” membership and “associate membership” – Friends – Supporters – Associates – Advisory Board or Council

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Boards, directors and meetings

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Engaging a trustee/director

Eligibility• Real person (Corporate no longer an option)• Over 16• Not disqualified• Not sectioned under Mental Health Act• Not undischarged bankrupt (subject to court)• Not auditor of company• Neither beneficed clergyman or convict

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Eligibility

. . . . .and subject to the provisions contained in the Articles of Association

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• If a trustee is to be paid or receive a benefit of some kind, the remuneration must be authorised:– in the charity’s governing document– under the statutory power to pay trustees

contained in the Charities Act 2011, if it applies– by the Charity Commission, in advance (not

retrospectively)

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SBEEA 2015 changes to directorships

• New offences added since October 2015 :– Disqualification for certain convictions abroad – Disqualification of persons instructing unfit

directors

• Corporate directors abolished with limited exceptions from October 2016

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Board Meetings

• Notice• Quorum• Conflicts of interest• Remote attendance• Decision-making without a meeting

– Written resolutions

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Decision Making: what should be recorded

• Who attended the meeting (is it quorate?) • Any conflicts of interest or conflicts of loyalty

(did anyone withdraw from the discussion?)• What the trustees decided & the reason for

the decision• The factors the trustees considered or decided

to disregard

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Decision Making: what should be recorded

• Whether the trustees took advice, and from whom

• Key points of any discussion• If the matter went to vote, the results of the

vote• Whether any trustee(s) disagreed with the

decision

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PSC regime

• Must maintain a PSC register and file with Companies House

• Records details of individuals or legal entities that have control

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Significant influence or control

• “Significant influence” and “control” are alternatives.

• “Significant influence” –where a person can ensure that a company adopts the activities which they desire

• “Control” -where a person can direct the activities of a company

• Does not have to be a person seeking to gain economic benefits from the policies or activities of the company

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Identifying PSCs

• Review register of members • Review Articles of Association • Review Statement of Capital • Review agreements e.g. shareholding

agreements • Monitor voting patterns (families or groups)

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Other roles and responsibilities

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Other Responsibilities • Information requests and disclosure

requirements • Financial reporting • VAT • PAYE • Insurance and pensions

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Other Responsibilities • Managing premises and facilities

• Health and safety compliance

• Data protection

• Risk register

• Other policies

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Data Security

Assess risks associated with breach. A breach can result from:

a theft of equipment or data a deliberate attack on your systems unauthorised use of personal data by a member of staff accidental loss equipment failure

Serious or substantial adverse consequences for individuals May need to notify ICO.

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Risk Management

Your risk policy should:-• identify risks • assess impact • indicate action• include a risk register/risk log• monitor actions• be reviewed regularly

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Policies• Business continuity• Confidentiality• Use of equipment• Safeguarding• Hospitality and gifts• Home working• Wellbeing• Reserves• Investment• Risk Management

• Social responsibility• Lone working• Conflicts of interest• Recruitment (Board)• Recruitment (Staff)• Volunteers• Performance• Discipline• Special leave• Communication

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Hints and tips

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Top Tips to take away

1. Ensure that your Articles are appropriate to your organisation

2. Understand the content (and impact) of the Articles

3. Make sure that all the trustees know and understand the relevance and importance of the Articles.

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Top Tips to take away

4. Create an organisational calendar/diary to ensure that you and the board are aware of planned significant events and activities

5. Know your role, the role of the board and the role of trustees – consider role descriptions for each

6. Know where to go for help and support

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What to include in an organisational calendar/diary

1. Dates of board meetings2. Date of AGM3. Financial year end dates and quarterly (or

other fixed dates) for financial reviews.4. Deadlines for submission of documents to

regulators (and timescales of activities leading up to these dates)

5. Schedules for review of policies

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What to include in an organisational calendar/diary

6. Schedule for review of risks7. Schedule for strategic and annual planning8. Schedule for budgeting and forecasting

future expenditure9. Review of governing document10.Review of performance of board and

individual members

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Resources

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Sources of more information

• Charities Act 2011 • Companies Act 2006 • The Charitable Incorporated Organisations (General)

Regulations 2012 • Charity Commission website for model constitutions • Community Interest Company (CIC) Regulator and

company interest companies [email protected]

• The Small Business Enterprise and Employment Act 2015

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Sources of more Information

• Companies House website https://www.gov.uk/government/organisations/comp

• Charity Commission website https://www.gov.uk/government/organisations/charity-co

• DSC publications https://www.dsc.org.uk/publications/

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https://www.gov.uk/government/organisations/comp

https://www.gov.uk/government/organisations/charity-co

https://www.dsc.org.uk/publications/

Resources

• The charities SORP website at www.charitysorp.org , includes the SORPs, background information, and guidance on how to select the right SORP.

• Helpsheets at www.charitysorp.org/about-the-sorp

?

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http://www.charitysorp.org/

http://www.charitysorp.org/about-the-sorp

Questions

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