The role of a company secretary is different from the layman function of just a simple clerical or secretarial officer or a secretary in the traditional sense. A company secretary is charged with the duty of ensuring the effective administration of a company. He or she also makes sure that the firm complies with all legal and regulatory requirements and that the board of directors' decisions are carried out.
The company secretary makes sure that a firm complies with all applicable laws and rules that govern the organization for which He or she serves in that capacity.
Who qualifies to be a company secretary?
Essentially, a private firm's requirements for a company secretary are very different from those of a public company. Therefore, in a public company, the company secretary must satisfy one of the two requirements listed below as per section 332 of the Companies and Allied Matters Act 2020:
- A Legal Practitioner according to the Legal Practitioners Act.
- A Member of the chartered secretaries and administrators Institute of Nigeria.
- A member of any professional accounting organization created occasionally by a National Assembly legislation.
- Any individual who, within the five years immediately preceding his appointment, held the position of secretary of a public firm for at least three years or
- A corporation or firm whose members each meet the requirements of paragraphs (a), (b), or (c).
A director's responsibility in a private company is to make reasonable efforts to ensure that the Secretary is someone with the necessary training and experience to carry out the Secretary's duties (See section 332 of CAMA 2020). Consequently, a company secretary needs to have technical knowledge of business issues.
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The Role of a Company Secretary.
- To ensure compliance of the provisions of Companies Law and rules made there-under and other statutes and bye-laws as well as the memorandum and articles of association of the company.
- To arrange with and to call and hold meetings of the board and to prepare a correct record of proceedings.
- To attend the broad meetings in order to ensure that the legal requirements are fulfilled, and provide such information as are necessary.
- To prepare, approve, sign and seal agreements leases, legal forms, and other official documents on the company's behalf when authorised by the broad of the directors or the executive responsible.
- The Company Secretary has the legal obligation to file various documents/returns as required under the provisions of the Companies Law.
- To ensure the proper maintenance of books and registers of the company as required under the provisions of the Companies Law.
Company Secretaries can be appointed by a company's Managing Director, the Board of Directors of a company or its founders.
Importance of a company secretary.
The Old Companies and Allied Matters Act (2004) made it compulsory for every company to have a company secretary. However, Section 330 (1) of the new Companies and Allied matters Act (CAMA) 2020, states that except in the case of a small company, every company shall have a company secretary.
Moreover, subsection 2 of the same section requires a company secretary for a public company. Thus, a company secretary is not required for a small company, but a company secretary is required for a public company.
Essentially, the following companies are exempted from having an appointed company secretary under the 2020 CAMA:-
- Companies with a net assets value of below 60 Million Naira.
- Companies with an annual turnover level of below 120 Million Naira.
A company secretary bears diverse responsibilities of ensuring the efficient management and administration of the company. They serve as advisers to the directors on regulatory compliance and other compliance matters. Though having a secretary in a small company is optional, it is however important to so have a company secretary thus small companies should weigh the importance of having a company secretary before choosing whether or not to have one.
In conclusion, it is pertinent for business owners to understand the role and importance of a company secretary as well as the position of Nigerian law in this regard in order to enable business persons to make better-informed decisions regarding the appointment of key staff going forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.