The office of the company secretary is created by the provision of the Companies Act. Under Section 178(1) of the Act, every company must have a secretary. However, if the office is vacant, its functions may be discharged by a deputy or assistant secretary if any or a delegate of the board.
Appointment of the Secretary:
Under article 110 of Table A, the Secretary is appointed by the board for such term at such remuneration and such conditions as the board may deem fit. The board is additionally empowered to remove the secretary from office. To qualify for appointment, one must either:
1. Be an advocate of the High court
2. Hold the Certified Public Secretaries certificate
3. Hold such other qualification which qualify him for appointment.
However, the following persons must not act as secretary:
1. The sole auditor of the company
2. A corporation which is the sole director of the company.
Under Section 180 of the Act, if a thing can only be done by or to a director and the secretary, such a thing is not deemed to have been done if done by or to the same person acting as director and the secretary.
Legal position of the secretary:
He stands in a fiduciary position in relation to the company. He owes it the basic fiduciary obligations.
Status of the Company Secretary:
During the 19th Century, the company secretary was regarded as a mere servant with no authority to bind the company. In Haise and Bunnet V. South London Trumways Lord
Esther stated, „A secretary is a mere servant. His position is that he is to do what he is told and no person can assume that he has any authority to represent anything at all”. The secretary‟s position has since changed and he is now regarded as the chief administrative officer of the company with extensive powers.
In Panorama Developments V. Fidelis Furnishing Fabrics (1971) where a company secretary hire vehicles for his own personal use but on the pretext that it was not necessary for purposes of the company and failed to pay the hiring charges where upon the company was sued. It was held that the company was liable for the hiring charges since the secretary had authority to hire the motor vehicles. In the words of Lord Denning, “But the times have changed, a company secretary is a much more important person than he was in 1887. He is an officer of the company with extensive duties and responsibilities. He is no longer a mere clerk”.
Duties/obligations of the secretary:
His duties generally depend on the size of the company and his contract with the company. His principle obligation is to ensure that the affairs of the company are conduced in accordance with the memorandum, articles, the Companies Act and the general law. However, his specific obligations include:
(i) Filing the annual return.
(ii) Issuing share and debenture certificates
(iii) Registering charges
(iv) Publishing the company‟s name as appropriate
(v) Taking minutes in general and board meetings
(vi) Issuing notices to members
(vii) Certifying transfers.
(viii) Maintaining the various registers of the company
(ix) Facilitating inspection of registers
(x) Custodian of the company‟s common seal.
(xi) Makes the declaration necessary for commencement of business.
Liability of the Secretary:
1. As a fiduciary, he is liable for breach of his fiduciary obligations to the company.
2. His office is liable (at criminal law):
For failure to register charges or publish the company‟s name
Refusal to facilitate inspection of registers Failure to maintain registers
Failure to publish directors names in official documents.