02 Feb Company incorporations and the role of the company secretary
No matter what else is going on in the world it seems as though our appetite for setting up new companies has not diminished. In fact, latest figures show that in the quarter to 30 September 2016 there were 154,685 company incorporations.
Admittedly, in the same period just over 100,000 companies were dissolved but nevertheless the net company count as at the end of September represents an increase of 7% over the previous year. In fact, the percentage increase may well have been higher were it not for the legislative changes which resulted in a considerable increase in company dissolutions in the first quarter of 2016.
Looking at the overall trend, the number of companies in existence has shown a steady rise since Q1 2014, a pattern which some observers put down to a post-recession bounce. Whilst some of the incorporations may relate to subsidiary companies being set up within existing groups or to existing partnerships and sole traders looking to incorporate, many will represent new business ventures.
Regardless of the reason for incorporation, what all these new companies have in common is the requirement for board directors and company secretaries to be put in place in order to oversee the proper running and function of the organisation. Whilst the rules and responsibilities of company directors receive a reasonable amount of publicity, the same is not always true for company secretarial duties. This, despite the fact that company secretaries have an important role to play in maintaining the records of the organisation.
Depending on the size and nature of the business, company secretarial duties may be carried out by the directors, or they may ask a nominated individual or external organisation to carry out the duties on their behalf. These duties include maintaining internal registers, updating information at companies house and organising board and shareholder meetings. The company secretary therefore needs to keep on top of director and shareholder information as well as ensuring that accurate minutes are taken at relevant meetings.
One company secretary duty which is perhaps not always appreciated is the role of the secretary in helping directors to comply with the corporate governance code. This could include providing advice and guidance to directors in respect of their actions and decisions as well as helping them to represent the company in an accurate and timely manner. Company secretaries therefore need to be fully aware of the roles and responsibilities of company directors and to keep up with the changing requirements in respect of the corporate governance code.