Why do companies dissatisfy with company secretaries?
In the corporate world, the role of a company secretary holds significant importance, serving as a vital link between a company’s management, board of directors, and external stakeholders.
However, there are instances when companies find themselves dissatisfied with their existing company secretaries. Whether due to a lack of expertise, inefficiency, limited skill sets, challenges in keeping up with changing legal requirements, or even interpersonal issues, companies may seek new candidates who can better meet their needs and expectations.
This blog write-up highlights certain reasons why companies may not be satisfied with their company secretaries and the importance of finding the right fit for this critical role within an organization. Some of the reasons we would like to mention below.
Number one – The company secretary does not respond to client’s phone calls and emails within a reasonable time ( poor responsiveness, inefficiency)
Number two – Delay in the provision of services even upon request of clients ( structural issues)
Number three – The company secretary does not take proactive actions to comply with the statutory requirements, thus, delaying or not submitting statutory documents ( not in focus on the practice)
Number four – Occuring errors in the preparation of documents, etc..( Incompetency. errors are costly)
Thus, the reliability of your company secretary is very important when running and managing your business. Now let’s talk about the company secretary and their role in brief.
Who’s the company secretary and what’s the role?
A company secretary, also known as a corporate secretary or a company secretary, is an individual or a body of corporate responsible for ensuring the smooth and efficient administration of a company. They act as a link between the company’s board of directors, management, shareholders, and other stakeholders. The specific duties and responsibilities of a company secretary can vary depending on the jurisdiction and the size and complexity of the company.
The main roles of a company secretary include:
1. Compliance: The company secretary ensures that the company complies with relevant provisions of the Companies Act and it’s attached to statutory duties.
2. Governance Support: The company secretary assists in organizing board meetings, prepares agendas, and takes minutes of the meetings. They provide guidance on corporate governance best practices and ensure that the board operates effectively and transparently.3. Shareholder Relations: The company secretary manages the company’s relationship with shareholders, including handling communications, organizing shareholder meetings, and managing share-related matters such as transfers, dividends, and issuance.
4. Record-Keeping (not bookkeeping): The company secretary is responsible for maintaining and updating the company’s statutory registers, such as the register of members, directors, and charges. They also oversee the proper filing and archiving of important documents, including financial statements, annual reports, and board resolutions.
5. Corporate Changes and Transactions: The company secretary guides the company through corporate changes, such as mergers, acquisitions, or changes in share capital. They ensure that all necessary procedures and regulatory requirements are met during such transactions.
6. Legal and Regulatory Compliance: The company secretary keeps track of legal and regulatory requirements applicable to the company and ensures that the company meets its obligations. They coordinate with external advisors, such as lawyers and auditors, to address legal and compliance issues.
7. The company secretary carries out an advisory service as and when necessary if required by the directors/shareholders of the company. However, this is not a statutory requirement of company secretaries.
It’s worth noting that in some jurisdictions, certain companies may be required by law to have a company secretary, while in others, it is not mandatory but highly recommended. The qualifications and expertise required for a company secretary can vary depending on the jurisdiction and the complexity of the company’s operations. Many company secretaries have a legal or governance background and may hold professional qualifications or memberships in relevant organizations such as Chartered Accountants, attorneys at law, etc. However, they should hold a license to practice as company secretaries in Sri Lanka.
Appointment and removal of company secretaries
Every company shall have a secretary. No person shall be appointed as a secretary of a company unless such person has, in the prescribed form—
(a) consented to be the secretary of such company; and
(b) certified that such a person has such qualifications as may be prescribed in the Companies Act.
Unless the articles of the company otherwise provide, the board shall have the power to appoint or remove a secretary of the company.
Regular duties of a company secretary
You understood that the company secretary only involves in line with statutory duties linked to the Companies Act. In their role, we as experienced company secretaries routinely involve in the below-mentioned duties:
1. Incorporation of companies
2. Preparing board and shareholders’ resolutions for adoption under the circumstances
3. Preparation and submission of annual returns to the Registrar General of Companies
4. Attending statutory meetings of the company such as board/shareholders meetings, Annual, and extraordinary general meetings.
5. Certification of documents under different circumstances
6. Involve in share transfer, issuing share certificates, dividends, share buyback etc.
7. Company strick-off (closure)
In conclusion, the role of a company secretary in the corporate world is crucial, acting as a vital link between management, the board of directors, and external stakeholders.
A company secretary’s main responsibilities include ensuring compliance with legal provisions, providing governance support to the board, managing shareholder relations, maintaining statutory registers and records, guiding the company through corporate changes and transactions, and ensuring legal and regulatory compliance.
The qualifications and expertise required for a company secretary may vary depending on the jurisdiction and the complexity of the company’s operations. Many company secretaries have a legal or governance background and may hold professional qualifications or memberships in relevant organizations. In Sri Lanka, company secretaries should hold a license to practice.
Overall, finding the right fit for the role of a company secretary is crucial for companies to effectively meet their needs and expectations and ensure smooth business operations.
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By Team SCB Corporate