Every Irish registered company is required by law to have a company secretary (“Secretary”), who may also be one of the directors. The functions of a Secretary are essentially administrative and not managerial. For instance a Secretary commonly:
- Provides legal and administrative support and guidance to the board of directors;
- Ensures that the board’s decisions and instructions are properly carried out and communicated;
- Has responsibility to ensure that the company complies with all relevant statutory and regulatory requirements;
- Has responsibility for communications with the shareholders when required;
- Acts as principal administration officer, liaising with staff, customers, suppliers, media and the board of directors; and
- Executes important documentation on behalf of the company, together with a director.
The powers of the Secretary are limited to a few powers given to him by statute and such other powers as may be delegated to him by the board of directors.
The Secretary has power to enter into contracts relating to the day to day administration of the company. Where the Secretary enters into contracts within his apparent or ostensible authority, his actions will bind the company even if he had no authority to act.
An officer of a company is guilty of an offence if he authorises or, in breach of his duty as an officer, permits the default in question. There is now a presumption that the relevant officer had permitted the default unless the officer can establish that he took reasonable steps to prevent the default or that he was unable to prevent it because of reasons outside of his control. This places the onus on the officer to disprove to the court, any fault on his part.
Where a Secretary, in purported compliance with any provision of the Companies Acts, answers a question, makes a statement, produces a document, knowing the answer, statement or document to be false, or is reckless in the conduct of his duties, he is in breach of the Companies Acts.
As the Secretary has no power to ensure compliance, such being vested in the board of directors, it would appear unreasonable to impose a duty to do so. The Companies Bill 2012 proposes to clarify the duties of directors and secretaries in this regard however the new Companies Act is not anticipated until 2014.
The duties of a Secretary are classified below as (i) Statutory Duties; (ii) Duty of disclosure; (iii) Duty to exercise due care, skill and diligence; and (iv) Administrative duties.
- Statutory Duties
A number of duties are imposed on the Secretary by the Companies Acts however few are carried out exclusively by him. Rather, they tend to be tasks carried out by a director and the Secretary. These include:
- Signing the annual return, which is also required to be signed by a director;
- Certifying the financial statements attached to the annual return, which are also required to be certified by a director;
- Giving the company such information as is necessary to enable it to comply with its obligations to notify the companies registration office (“CRO”) of changes of Secretary or to his particulars;
- Ensuring that the requirements of the Companies Acts are complied with (section 100 of the Company Law Enforcement Act 2001);
- Signing of application forms to re-register (i) a private limited company as a public limited company; (ii) an unlimited company to a public limited company; (iii) an unlimited company as a public limited company as a private company; (iv) a limited company as an unlimited company; and (v) an unlimited company as private limited company;
- Making the statutory declaration required for a public limited company before it may carry on business;
- Completing and signing a form of application to register a business name of the company;
- Making out the statement of affairs in a receivership, either two directors or one director and the company secretary can complete this; and
- Making out the statement of affairs in a winding up, either two directors or one director and the company secretary can complete this.
- Duty of Disclosure
The Secretary is obliged to disclose certain information for inclusion in the register of directors' and secretary and the register of directors' and secretaries' interests.
- Duty to exercise due care, skill and diligence
A Secretary is under a duty to exercise due care, skill and diligence in the performance of his duties. He can be held liable for any loss arising as a result of his negligence. The Secretary however need not exhibit in the performance of his duties a greater degree of skill than might reasonably be expected from a person with his level of knowledge and experience.
- Administrative Duties
In addition to the duties imposed specifically by statute, a Secretary has a number of important administrative duties. These duties will vary depending on the size and type of the company involved and any decisions by the board regarding matters to be delegated to the Secretary. They may include:
- Maintaining the statutory registers of the company (register of directors and secretary, register of members, register of directors’ and secretaries’ interests and register of debenture holders) and making them available for inspection to those entitled;
- Preparing and filing the annual return and notice of other matters such as changes in directors and secretaries or in their particulars, change of registered office address, return of allotments, passing of special and certain ordinary resolutions etc. within the prescribed time limits in the CRO;
- Preparing and issuing notice of board and general meetings in accordance with instructions given by the chairman or the board;
- Attending and taking minutes of meetings and maintenance of the related minute books;
- Ensuring that board decisions are properly communicated and that action items are circulated to the board members after each board meeting;
- Registration of share transfers and issuance of related share certificates, subject to board approval;
- Ensuring that guidance is provided to the board on corporate governance matters generally and ensuring that the provisions of the memorandum and articles of association and of any shareholders’ agreements, to which the company is a party, are observed;
- Providing support to the executive and non-executive directors to include (i) providing them with a copy of the most recent memorandum and articles of association of the company; (ii) ensuring that they are aware of their statutory obligations; (iii) providing them with a schedule of board meetings; and (iv) providing them with any other information they may validly require to fulfil their functions;
- Ensuring that the company complies with its disclosure requirements such as information contained on company letterhead, websites and electronic communications;
- Communicating with company shareholders;
- Safe custody of the company seal and, where authorised, countersigning its affixing with one of the directors;
- Certifying documents such as copies of the certificate of incorporation, memorandum and articles of association, copies of certain resolutions and copies of certain statutory registers.