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Please bearer in mind, that the new Companies Act doesn't decline secretary duties and responsibilities, all of them need to be done, complete and file in accordance with law. Since April 2006, all corporate secretaries’ duties and responsibilities can be done by a sole director. To help you to make a final decision do you need to appoint a secretary or not, please read the relevant information below.
A private company secretary manages the processes involved with developing and implementing company legislation, regulation and best practice. Working in a wide range of sectors, they are responsible for ensuring that board members are properly advised of their responsibilities by coordinating the proper and efficient flow of information to them. They are closely involved in the decision-making process, frequently ensuring the implementation of board decisions.
By making sure that legal and regulatory requirements are covered, limited company secretaries provide the basis from which companies can successfully operate and develop. The role varies according to the nature of the company and sector. The work of a company secretary covers a wide variety of functions and is partly dependent on the individual company for which they work.
The company entrusts the director with the responsibility of making critical business decisions and is therefore liable for all penalties incurred on behalf of the company. UK company law is quite lenient regarding who can become a director. There are no nationality requirements, but the minimum legal age for a company director is sixteen. If the court disqualifies a person from acting as a company director, they will be unable to take up the role of director in a new company.
While the secretary may undertake the duty of preparing the annual returns, annual accounts, notification of any change in the company members' details, or change in registered office address, it is ultimately the director's responsibility.
The director will be the main signatory for any official documents. The duties and responsibilities of a company director are ultimately dependent on the nature of the business, though there are many standard things that are applicable to all directors. While the secretary may perform several roles, the responsibility of many of them lies with the directors.
If the company has employees, the director will need to ensure that they are paying the right amount of National Insurance and tax, as well as VAT on any goods or services that they provide. In addition, the director must conduct themselves according to the memorandum and articles. Directors are morally obliged to put the interest of the company before their own and do nothing that may harm or affect the company in a negative way.
While this seems a simple enough ethos to abide by, directors can sometimes inadvertently harm the business by unwittingly engaging in unlawful trading, or by not paying the correct tax in the appropriate jurisdictions. This is why it is important that a director of a company maintain a strong knowledge base with all these issues as even accidental misconduct can lead to grievous penalties.
It is the responsibility of the director to provide the correct information to auditors for the preparation of the accounts. This means careful maintenance of petty cash receipts and company bank statements. Directors may take into consideration that holding annual board meetings is sometimes required to discuss the status of the company and any changes they want to make.
In short, the director(s) are in charge of managing the general affairs of the company – this is a position that covers the delegation of work and to act in a way that benefits the company. Directors hold a high position of trust and power, and are morally obliged to act in the best interest of the company. Abuse of these principals can lead to penalty, such as termination or severe fines, especially if they act wilfully negligent.
A diraector must not engage in an act that goes against the rules and regulations set out in the memorandum and articles. It may seem obvious that the director must refrain from engaging in unlawful acts, as this has a tremendous affect on both the individual and the company.
The extent of the company director's power is dependent on the specifics within the memorandum and articles. It is useful to know that there can be no checklist to illustrate a company director's duties, as their role may crossover into the company secretary's responsibilities. The size and type of business will usually determine the extent of work that the director will do. Smaller businesses will sometimes have fewer members and therefore the appointees of the company will need to incorporate more responsibility into their role.
There is nothing that prevents the company director from also being the secretary, but due to the vast array of responsibility that the combined roles offer, it is often more beneficial to assign these roles to two separate people.
At least once a year, directors should hold an annual meeting. The directors must provide the shareholders with a report detailing the status of the company, whether there has been progress or not. In these meetings, company directors should express any future strategic plans they hope to employ, and keep shareholders updated with any changes they wish to make. Directors should also assign a chairperson who will often write the agenda and sign of the minutes of the meeting.
Aside from the general jobs of the company director as stated in the above, they are also responsible for the development of the business. This includes establishing company policies and corresponding with employees as well as other company members. It is the duty of the director to maintain order but also to plan and uphold corporate structure; the director, singularly or collectively, should be constantly formulating ways to make the business more efficient and more successful.
Another key element to the director role is being able to delegate work and duties to the appropriate people, in order to ensure that all areas of business are covered. Aside from that, it may be relevant for the director to supervise other members of staff and appointees in their work. There needs to be a good relationship in place between director and shareholder, as the director must be able to understand and apply the interests of the shareholders.
A company director has the responsibility of looking after the business and assuring that they always work in its best interests. With such liability comes a plethora of duties to ensure that the directors do not abuse their position of power, such as manipulation of the company books and illegal share activity. It is for this reason that the director can be accountable for acting negligently or wilfully unlawful.