Before the coming of the Companies and Allied Matters Act 2020 (CAMA 2020), every company, whether public or private, was required to have a company secretary. In the present CAMA 2020, a private company is no longer required to have a company secretary at incorporation but can appoint one after the company has been incorporated.
Meaning of Company Secretary
Company secretaries are persons or corporations who are appointed to provide certain specific services to the company’s board of directors, the company’s general meeting, and the company itself.
This work offers clarity to the position of a company secretary’s duties and status in the overall activities of the company.
Legal Status of a company secretary
The business world has been stressed by recent arguments as to the position of the company secretary to a corporation. Previously, the position of the company secretary was likened to that of a servant of the company and nothing more. The previous times saw the decisions of the company secretary not binding on the company itself, such decisions must be ratified by the company.
Nonetheless, in the famous British case of Panorama Ltd v. Fidelis Ltd, in that case, Fidelis Ltd’s company secretary hired cars from Panorama Ltd to which the secretary signed the hiring documents on behalf of Fidelis Ltd. Panorama sued Fidelis for outstanding payment, Fidelis contended that the secretary cannot bind the company and actions from the secretary ought to be ratified by the company before it becomes effective, hence no contract at the first instance. The British courts disagreed and for the first time in history held that the position of the company secretary is so significant that his actions can individually bind the entire company.
CAMA 2020 agrees with the position of the British courts in Panorama’s case and re-instates the position that the secretary’s action can bind the company.
Who can be a company secretary?
Any person skilled with the knowledge of secretarial duties can be the secretary to a private company. It should be noted that the law looks to the duties and not the nomenclature; therefore, a mere executive assistant or IT specialist that undertakes the functions of the company secretary would be regarded as a company secretary by the courts.
For a public company, the company secretary must be who is :
- A Member of the institute of chartered secretaries and administrators;
- A Legal practitioner;
- A chartered accountant;
- A person who has served as a secretary of a public company for three years; and
- A firm of A, B and C above.
The company secretary is appointed by the board of directors through a directors’ resolution.
Duties of a company secretary
The following are duties of a company secretary according to CAMA 2020 are provided as follows.
1. Attending Meetings
The company secretary attends all company meetings, including the general meetings, the board of directors meetings, the company committees meetings and others.
The company secretary also takes record of the activities that go on in the meeting, prepares the agenda of the meeting with the managing director, prepares and sends out notice of the meeting to the members required to attend, prepares the minutes of meeting, and advise on any regulatory compliance or otherwise as it relates to the company.
2. Maintaining records of the company
The company secretary is pivotal to maintaining the company’s records stated by CAMA for all companies to have. The records include setting a strategy for easy functioning of the company’s daily functions that would see to the smooth operation of the business.
In addition, the company secretary ensures that all the necessary updates as it relates to the company are met, and all changes in procedures, laws and other areas of interest to the company must be complied with.
3. Rendering proper returns to the CAC
This is by far one of the most significant duties of the company secretary. CAMA requires certain returns be made to the CAC when a change occurs in a company, for instance, when a company changes its directors. Failure to make these returns to the CAC can see the company being fined. The company sectary must ensure that all returns are made to the CAC as at when due.
Also, another return to be made to the CAC is the annual returns. The annual returns are evidence that the company remains in business and functions as a going concern. Companies must file their annual returns on or before June 30th every year. Failure to file annual returns for a long period can see the company’s name being struck out from the registrar of companies with the CAC. The company secretary is also to ensure that the annual return of the company is filed when needed.
4. Other duties
The directors of the company can delegate any such duty they deem fit to the company secretary. This duty may be a further administrative duty or otherwise.
Removal of a company secretary
CAMA doesn’t provide a procedure for the removal of a private company’s secretary, it, therefore, suffices that a private limited company secretary can be removed by the directors.
Nonetheless, the CAMA explicitly provides for the procedure to remove a secretary of a public company.
To remove the secretary of a public company, the board of directors must first issue notice to the secretary stating:
- The intention to have him removed;
- The reasons for the removal; and
- Giving the secretary 7 days to make a defence to the allegations, or resign from office.
Where the secretary refuses to make a defence or refuses to resign, the board shall through a resolution vote to have him removed. If the secretary makes a defence, the board shall send the defence and a notice to the general meeting to vote on the removal of the secretary.
Nonetheless, the board of directors can refuse to have the company secretary’s defence sent to the general meeting if the company secretary is being removed for:
- Fraud or
- Serious misconduct.
Conclusion
The company secretary is a significant position for all companies today. In practice, all companies in Nigeria possess persons undertaking the varying functions of a company secretary. It is advised that companies acquire professionals as company secretaries because of the varying complex duties to be performed by the company secretary in the long run.
