Demystifying the company secretary duties in Australia: A comprehensive guide
When you think of the key players in your company, you might first think of the CEO or board of directors.
However, there is another important role that often flies under the radar: the company secretary.
In Australia, the company secretary plays a vital role in ensuring that a company operates in compliance with legal and regulatory requirements. They are responsible for maintaining records, communicating with shareholders and other stakeholders, and providing administrative support to the board of directors.
Despite their importance, the role of the company secretary is often misunderstood or overlooked.
In this article, we will explore everything you need to know about the role of the company secretary in Australia, from their qualifications and responsibilities to the process of appointing and removing a company secretary.
Who is a company secretary in Australia?
A company secretary is a senior executive appointed by the board of directors to ensure that the Pty Ltd company complies with all legal and regulatory requirements.
Do you need a company secretary for your Pty Ltd company?
Yes, having a company secretary is not just a legal requirement for a Pty Ltd company, but it can also offer many benefits to your company.
A company secretary can help your company operate efficiently and effectively, ensure compliance with all legal and regulatory requirements, and provide valuable advice and guidance to the board of directors.
When should you appoint a company secretary?
Starting a new Pty Ltd company? It is important to appoint a company secretary at the earliest opportunity.
If you already have a company but do not have a company secretary, you should appoint one as soon as possible to ensure that your company complies with all legal and regulatory requirements.
Failure to comply with these requirements can result in penalties and fines, and can even lead to the deregistration of your company.
Who can be a company secretary?
According to the Corporations Act 2001, all proprietary limited (Pty Ltd) companies in Australia are required to have at least one company secretary –
- Must be a natural person.
- Be over the age of 18.
- There are no specific educational or professional qualifications required however, they should have the necessary skills, knowledge, and experience to perform the role.
- Is not an undischarged bankrupt.
- The company secretary can be an employee of the company or a contracted service provider, like Sleek!
It is important to note that even if your Pty Ltd company has only one director, it still requires a company secretary. In cases where the company only has one director, the company secretary can be the same person as the director, but they must still fulfill the legal and regulatory requirements of the company secretary role.
What if you can’t find a company secretary to appoint?
Companies can also appoint third-party service providers to act as company secretaries. These providers offer company secretarial services and are typically staffed by individuals with relevant qualifications and experience.
Engaging a third-party service provider can be a cost-effective way for smaller companies to meet their obligations under Australian law while still benefiting from the expertise of a qualified company secretary.
What does a company secretary do?
The role of a company secretary in Australia is diverse and multi-faceted.
Some of the primary roles and responsibilities of company secretarial duties include:
Legal and regulatory compliance
A company secretary ensures that the company complies with all legal and regulatory requirements. They ensure that the company meets its filing requirements with ASIC and that it adheres to all the laws and regulations that govern its operations.
Some public companies listed on the Australian Stock Exchange have stricter financial compliance requirements.
The company secretary provides support and guidance to the board of company directors. They ensure that the board is aware of its legal obligations and responsibilities and that it operates within its authority. The company secretary is also responsible for ensuring that board meetings are conducted following the company’s constitution and legal requirements.
The company secretary is responsible for maintaining the company’s statutory books, including the register of members, directors, and secretaries. They also maintain the minutes of board meetings and ensure that they are accurate and up-to-date.
The company secretary is responsible for ensuring that the company adheres to best practices in corporate governance. They advise the board on matters related to corporate governance and ensure that the company’s policies and procedures are in line with industry standards.
The company secretary is responsible for communicating with shareholders and ensuring that they are kept informed of the company’s activities. They are also responsible for managing shareholder meetings and ensuring that they are conducted within the company’s constitution and legal requirements.
The company secretary is responsible for identifying and managing the company’s risks. They ensure that private companies have appropriate risk management policies and procedures in place and that the board is aware of the company’s risk profile.
Ethics and compliance
The company secretary is responsible for ensuring that the company operates in ethically and transparently. They ensure that the company’s policies and procedures are in line with ethical standards and that the company complies with all relevant laws and regulations.
What are the skills of a company secretary?
Wow, this is an important role in your business, isn’t it?
So, what skills should you be looking for when you are appointing someone to be a company secretary?
There are several key skills that a company secretary should possess to effectively fulfil their role:
Sound knowledge of corporate governance and law
Consider a company secretary that has a thorough understanding of corporate law and governance principles, as well as the legal and regulatory framework in which their company operates. This is usually the chief financial officer.
Excellent communication skills
A good company secretary is an effective communicator, with the ability to liaise with a range of stakeholders including board members, shareholders, and external service providers.
Good attention to detail
A company secretary is responsible for maintaining accurate records, financial reports and ensuring that all necessary documentation is filed on time. As such, they must be highly detail-oriented and able to work to tight deadlines.
The ability for strategic thinking
Your company secretary will play an important role in supporting you and your board of directors in making informed decisions. As such, they must be able to think strategically and provide valuable insights and advice.
A company secretary who can analyse complex information and provide recommendations based on their findings.
Consider a company secretary with the highest levels of integrity and ethical standards, ensuring that the company operates transparently and responsibly.
Time management skills
A company secretary is responsible for managing their own workload, as well as ensuring that the company complies with all relevant deadlines and filing requirements. As such, they must have strong time management skills and the ability to prioritise tasks effectively.
Your company secretary will often work closely with other members of the management team, as well as external service providers. As such, they must be able to work collaboratively and effectively as part of a team.
While not essential, a good understanding of financial reports and statements and accounting principles can be beneficial for a company secretary, particularly in smaller organisations where the role may encompass broader financial responsibilities.
How do you appoint a company secretary?
Found the right candidate to be a company secretary that meets the skills and eligibility criteria?
So how do you appoint them officially?
The process of appointing company secretaries in Australia depends on the specific requirements of the company in question. Generally, the appointment of a company secretary is made by the board of directors, either through a formal resolution or as part of the company’s corporate governance.
Here are the key steps to follow when appointing a company secretary in Australia:
Step 1: Determine the requirements
Before appointing company secretaries, the board should first determine the specific requirements of the role. This may include factors such as the qualifications and experience required, the level of responsibility and authority, and the expected time commitment.
Step 2: Identify potential candidates
Once the requirements have been established, the board can begin to identify potential candidates. This may involve advertising the position, soliciting recommendations from professional networks, or approaching recruitment agencies.
Step 3: Review applications and conduct interviews
The board should review all applications and shortlist all company secretaries for interviews. Interviews may be conducted in person or via video conference and should be used to assess each candidate’s suitability for the role.
Step 4: Make a formal offer
Once a suitable candidate has been identified, the board should make a formal offer of appointment. This should include details such as the start date, remuneration, and any specific conditions or requirements of the role.
Step 5: Complete the necessary paperwork
Once the offer has been accepted, the board should complete any necessary paperwork to formalize the appointment. This may include updating the company’s register of officers and notifying relevant authorities.
How do you remove a company secretary?
If you have appointed a company secretary and need to remove them for whatever reason, again, there is a process outlined in the company’s constitution or the Corporations Act 2001 you will need to follow –
The steps may vary depending on the circumstances, but generally involve the following:
- Review the company’s constitution or shareholders agreement to determine the process for removing company secretaries.
- Call a meeting of the board of directors to discuss the proposed removal of the company secretary.
- Pass a resolution at the meeting to remove the company secretary from their position. This resolution should be properly documented and recorded in the company’s minute book.
- Provide written notice of the removal to the company secretary as soon as possible after the meeting. The notice should include the reasons for the removal and the effective date of the removal.
- Update any relevant records or registers to reflect the change in the company’s officers.
Once this has been completed, go back to How do you appoint a company secretary? process above. Simple!
Companies should carefully consider the skills and experience required for this role when appointing a company secretary, and ensure that they have the necessary support and resources to carry out their responsibilities effectively.
Sleek can help you appoint the right person in the role, so your company secretary becomes an asset to your business, helping to ensure that it operates smoothly and in compliance with the law. Call us today on +61 2 9100 0480 or use our chatbox to talk to an accountant.
Yes, in Australia, a director and company secretary can be the same person. However, it is important to note that the roles of director and company secretary are distinct and have different responsibilities.
If a person holds both positions, they must be able to effectively manage the duties and obligations of both roles and ensure that they do not create a conflict of interest or breach any legal or regulatory requirements.
Yes, in Australia, a person can be a company secretary without being a director. The role of company secretary is a separate position from that of director and has its distinct responsibilities.
In many cases, the company secretary will be appointed specifically for their skills and experience in these areas, rather than for their involvement in the strategic decision-making of the company.
Yes, it is possible to have two company secretaries in Australia, although this is relatively uncommon. The appointment of multiple company secretaries may be useful for larger companies or those with complex operations, where additional support is needed to manage the administrative and regulatory responsibilities of the role.
This article is meant to provide general information. Tax regulations can be complex and subject to change, so it’s always best to consult a qualified tax professional or the Australian Tax Office (ATO) for specific advice tailored to your situation.