Does my business need a company secretary?
Company Secretarial Services for Startups & SMEs
Under current law and regulations, there is no need for a private company in the UK to have a company secretary, unless the company’s articles of association state otherwise.
In the absence of a company secretary, company secretarial duties and responsibilities fall upon the directors of the company. However, in today’s newsletter, Dragon Argent look at the circumstances in which a startup might benefit from appointing a company secretary, particularly in respect of enterprise value.
(If you'd like to learn more about the responsibilities of a company director, you can review a previous newsletter on this topic here.)
What are the duties and responsibilities of a company secretary?
The duties and responsibilities of a company secretary will often depend on the size and nature of the company, but in the absence of a statutory definition, it is generally understood that company secretaries assume responsibility for compliance with corporate governance and any legal or financial regulations.
Some examples include:
Maintaining the company’s statutory registers
Updating Companies House of any significant changes to the company’s share capital
Other filing requirements and returns
Arranging and organising the company’s board meetings
Assisting the Chair of a board meeting with proper notices and the production of minutes
Informing the board of directors on their legal responsibilities to the company and its shareholders, as well as any matters of corporate governance
Who can be a company secretary?
Company secretaries do not have to hold any specific qualifications or experience. However, startups must consider the needs of the business before formalising an appointment. Where a startup has the potential to grow quickly, or the nature of the company’s business has specific compliance requirements, or directors time and energy are focused elsewhere in the businesses operations, it may be worth appointing a company secretary to ensure the company is compliant from a legal and corporate governance perspective.
Considering the above, some companies will appoint a company secretary that is a qualified legal, financial or corporate professional, who will become a valuable asset and ensure the company runs effectively and efficiently.
Why should a startup consider a company secretary?
If a startup is ambitious, has plans to scale rapidly and is likely to require institutional investment to do so, investing in corporate governance from the outset is likely to not only save time and money during due diligence processes, it will also increase the enterprise value of the business.
This will help founders retain as much equity as possible during investment rounds but also on disposal of the business. Plus, in the short term, it frees up the leadership teams time to focus on the commercial activity that predicates growth.
If you would like to learn more about the opportunity to outsource company secretarial responsibilities for your business, schedule a discovery call with one of our business legal advisor today.
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