Following on from my article “A Word To The Wise… Director”, I have received several questions about a related and very important issue. These questions surround the duties and obligations of a Company Secretary.
Many people accept the position of a Company Secretary not knowing what it entails. Some accept it, thinking it will be akin to some of the simpler aspects of cleric/secretarial work, but, the duties of a Company Secretary, which are often duties delegated by the directors, are serious, can be extremely onerous, and often require a reasonable degree of skill and knowledge. Therefore, though any liability will ultimately rest with the directors and the company, where a Company Secretary fails to exercise his/her duties with due care, a company could find itself in breach of its obligation. This article will set out some of these duties and obligations.
Directors’ meetings, shareholders’ meetings, and minutes
In “A Word To The Wise… Director”, it was discussed that directors ought to, when making decisions for a company, hold directors’ meetings, and in some cases, depending on the decisions to be made, the directors should arrange for the shareholders to meet. Ancillary to this, are the first set of duties and obligations of a Company Secretary that this article will look at.
A Company Secretary has a duty to organise all meetings of the board of directors, including but not limited to, preparing and sending notices for the meetings, preparing the meeting agenda, and distributing, in a timely manner, any board papers and other documents required for the meeting. In terms of shareholders’ meetings, the Company Secretary must ensure that these meetings are held in accordance with the Companies Act of Jamaica (the “Act”), and the company’s Articles of Incorporation. The Company Secretary must, therefore, also organise these meetings, which involves preparing and sending the necessary notices, preparing the shareholders’ meeting agenda, and distributing any documents required for the meeting in a timely manner.
At any meeting of the directors or the shareholders, the Company Secretary must ensure that the minutes of the meeting are accurately recorded, and further that these minutes are properly kept, and that the minute books of the company are maintained with certified copies.
It is also the duty of the Company Secretary, to filter to the management of the company and other stakeholders, the decisions of the board of directors, which ought to be communicated to them.
Maintaining the private and public registers
Under the Act, a company is to maintain certain registers that are internal to the company (the private registers), including a register of directors, a register of shareholders/members, and a register of beneficial owners. The public registers at the Companies Office of Jamaica (“COJ”) (with the exception of beneficial ownership information, which is now restricted from the public), must also be maintained. It is the duty of the Company Secretary to maintain and update all the internal/private registers required by the Act, and ensure that all information required to be filed with the COJ to keep its records up-to-date is filed. Additionally, with the new requirements regarding beneficial ownership information, owing to the recent amendments to the Act, a Company Secretary is under even more stringent obligations to ensure that the identities of the beneficial owners of the company are known, including having photo identification for such persons.
Routine and other filings with the COJ
As a Company Secretary is obligated to keep the company’s public record at the COJ up-to-date, this involves certain routine and other filings with the COJ. One routine filing, of which most persons would be aware, is the company’s Annual Return. The Company Secretary must ensure that this document, along with the now required Beneficial Ownership Return Form, are filed before or when due, to ensure that the company is in compliance with its obligations to file same.
Other filings may also be required from time to time, when there are changes in the company. This includes, for example, when there are changes in the directors, changes in the registered office address, or changes to certain details about shareholders/members. These changes must be communicated to the COJ, via the appropriate forms, in the timeframe stipulated, and it is the responsibility of the Company Secretary to ensure that these filings are done. Other changes include changes in shareholding, whether by allotment and issue, or transfer. The Company Secretary must advise the COJ of any changes utilising the relevant forms, and additionally, the Company Secretary must ensure that any share certificates which need to be cancelled are duly cancelled, and that, for any new share certificates that need to be prepared, executed, stamped, and distributed to new shareholders, this is done.
Reporting and disclosures
Some companies, such as public companies, may have an obligation to make reports or disclosures in accordance with certain laws, regulations, or under certain rules. It is often the Company Secretary who is responsible for establishing a rapport with any regulatory bodies or authorities (as may be applicable), and making any reports or disclosures as might be required by these bodies or authorities.
Being a Company Secretary entails more than what we might be tempted to think because of the use of the word “secretary”. It is, in fact, a very significant position to hold in a company, because, where a Company Secretary fails to meet his or her obligations, the company may be in breach of its meeting obligations, its record maintenance and filing obligations, and even certain reporting and disclosure obligations, which, if left undone, or not done in a timely manner, could land the company in hot waters. Like a directorship, accepting an appointment as a Company Secretary is not to be taken lightly, as the obligations, and consequences of any failings in respect of those obligations, could be potentially catastrophic for a company.
Lisa Rhooms is the Managing Partner at Grant, Henry & Rhooms, and the head of the firm’s Commercial Law Department. She may be contacted at lisa@ghrlegal.com or www.ghrlegal.com. This article is for general information purposes only and does not constitute legal advice. Should you wish to seek legal advice, you may schedule a free consultation with our offices.