The company secretary

Introduction

The company secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the board of directors are implemented.
Company secretaries are the company’s named representatives on the legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is also their responsibility to register and communicate with shareholders, to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts.
The office of the Company Secretary is created Sec 243 of the Companies Act.

Every public company must have a company secretary, who is one of the officers of a company and may be a director.

Under Sec 244, the Attorney General may give a public company a direction to appoint a company secretary if the company has not done so.
Company secretary in private company

Private companies are not required to have a secretary. In this case the roles normally done the company secretary may be done one of the directors, or an approved person. A private company is however required to have a secretary only if it has a paid up capital of five million shillings or more.
Appointment of Company Secretary
The Company Secretary is appointed the board of directors for such term and such other conditions as the board may deem fit. The board is empowered to remove the Secretary subject to the terms of the appointment.
Qualifications
To qualify for appointment as a Secretary, a person must either:
• Be an Advocate of the High Court of Kenya.
• Be a Certified Public Secretary (CPS K)
• Possess such other qualifications which qualify him for appointment.
• Must be a registered member of the Institute of Certified Public Secretaries of Kenya (ICPSK)

The following persons are disqualified from being appointed company secretaries:
• The sole director of the company.
• A corporation which is a sole director of the company.

Where the Companies Act requires a thing to be done or to a director and the Company Secretary, such a thing is not deemed to have been done, if done or to the same person acting as director and Secretary.

Legal position of the Secretary
He stands in a fiduciary position in relation to the company and owes in the basic fiduciary delegations i.e. must act bonafide and avoid conflict of interest.
Duties and obligations of the Secretary
Although the Companies Act does not identify the duties of a Secretary, it perceives them as administrative. His duties depend on the size of the company and the terms of engagement. His overall responsibility is to ensure that the affairs of the company are conducted in accordance with the Articles, and the Companies Act generally.
Some of his specific duties include:
• Taking minutes at General and Board meetings.

• Issuing notices to members.
• Accepting or receiving notices on behalf of the company.
• Certifying transfers.
• Issuing share and debenture certificates.
• Registering charges created the company.
• Registering special resolution.
• Filing the annual returns.
• Maintaining custody of certain books of the company.
• Maintaining custody of the company’s common seal.
• Publishing the company’s name as required.
• Countersigning documents on which the company seal is placed or used.

Liability of the Secretary
As a fiduciary, he is liable in damages for breach of any fiduciary duties. He must act in good faith and must not make a secret profit. He may be held liable to account for any secret profit made in breach of these duties.
Criminal liability of a company’s secretary
He is criminally liable for:
• Failing to publish the company’s name as required.
• Failing to register charges.
• Failing to make the annual returns.
• Failing to make returns on allotment.
• Destroying or falsifying the company’s books with intent to defraud.

Company’s liability for secretary’s acts
It is established rule of general law that an employer is liable for the fraud of his employee, committed in the course of his employment, even if committed for the employees benefit. This rule, however does not apply when a secretary fraudulently issues a share certificate on which he forged the signature of directors. The secretary may incur personal liability to 3rd parties in respect of contracts entered into apparently on behalf of the company, if sufficient care is not taken, e.g. failing to make it clear that he is acting only as the company’s agent.
The secretary should take care particularly in signing bills of exchange and cheques. The words “for and on behalf of Co. ltd” should always be written under the secretary’s signature.

(Visited 24 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published. Required fields are marked *