A company secretary is an important role that is often misunderstood and assumed to be a personal assistant or receptionist. Despite any preconceptions, corporate secretaries play a more important role in helping businesses operate within the law and financial regulations.
Depending on the business, corporate secretaries can also help directors with the day-to-day running of the business and play a role in key, strategic decisions.
In this guide, we’ll answer your questions about what is a company secretary, what do they do and if you need to hire one as a limited company in the UK.
Company secretaries explained
A company secretary is an ‘officer’ of your firm. This means that they are an important member of the management team, and are often the first point of contact from your shareholders in the business.
The day-to-day responsibilities of a company director are varied but involve ensuring that the business operates within all financial, legal and statutory regulations. Basically, they make sure you don’t break any laws or guidelines and are running your business exactly as you should be.
However, it’s worth noting that although corporate secretaries are responsible for ensuring your company follows the law – they are not liable for it. Your director is, and always will be, legally responsible for your firm.
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The responsibilities of a company secretary
The role and responsibilities of a company secretary vary by the type of company, its size, and the sector which it operates. However, company secretaries can normally be expected to:
- Guide the chair and board on the rules and regulations they should adhere to, and ensure that they are carried out.
- Maintaining statutory books and keeping the registers up to date. Failure to update these records is an offence and will result in a hefty fine.
- File confirmation statements and company returns, such as annual reports, director’s reports and more. If you’re looking for help putting together your annual statements, you might want to look at the 10 best accounting software for UK businesses.
- Organise meetings between directors and shareholders, including creating the agenda, taking minutes and ensuring that all board meetings observe any regulatory requirements.
- Keeping Companies House records up to date and informing them of any changes, such as officer appointments, address changes or modifications to articles of association.
- Managing the registered office address for the firm, handling the correspondence that is sent to this address – and ensuring that it is correctly displayed on any company assets (like emails, website, stationary, etc).
- Keep on top of legal, financial and statutory regulations for your business to ensure that you are compliant.
- Maintain the security of business documents, including the certificate of incorporation, memorandum and articles of association, company seal, share certificates and directors’ service contracts.
- Maintain good relationships between shareholders and the board, sharing opinions and feedback when relevant.
- Communicate with shareholders, distributing business announcements and all correspondence on dividends, share ownership registration, transfers or any other matters concerning company shares.
- Sign legal documents on behalf of directors.
- Liaise with external regulators and advisers, such as lawyers and auditors.
Some corporate secretaries may also be required to perform other duties such as handling payroll, VAT administration, pension scheme administration as well as the HR and health and safety responsibilities. As you can see, it’s much more than just answering the phone or maintaining a diary.
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Our top-rated company formation agent, 1st Formations, offer a full company secretary service (even if you didn’t use them to form your company).
It includes a named secretary at Companies House, a dedicated account manager, and maintenance of your statutory registers – including your annual confirmation statement.
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Company secretaries aren’t a requirement for limited companies
A private limited company in the UK does not need to employ a corporate secretary. The only restrictions that HMRC have in place are over who you can employ as a company secretary if you choose to do so.
For example, a company secretary cannot be the firm’s auditor (as that will be a conflict of interest) or an ‘undischarged bankrupt’.
This means that they are still under restrictions imposed on them from declaring bankruptcy. If you’re not sure, you can check if someone has been discharged using the Insolvency Register.
If you choose not to employ a company secretary, then the roles and responsibilities will fall onto the company director. (As outlined in section 270 of the Companies Act 2006).
This is why many limited companies still choose to hire a corporate secretary, as it frees more time for directors to focus on the development of the business.
How to hire a company secretary for your business
Want to employ a company secretary to help operate your business? Ensure you get the right person for the role with these tips and guides for hiring a company secretary.
Step 1: Define the role and responsibilities
Before you can hire the right company secretary, you need to clearly define what you’re looking for within a job description. This will include key information such as:
- Job Title: Company Secretary
- Salary Range: Specify the salary or salary range you’re offering.
- Qualifications: List any necessary qualifications, such as a relevant degree or professional certifications.
- Experience: Indicate the minimum level of experience required.
- Key Responsibilities: Clearly outline the specific tasks and duties the company secretary will be responsible for.
There’s no legal qualification that company secretaries need to have. However, considering some of the roles and responsibilities that they will take on in your business, it’s a good idea to look for those with qualifications in:
- Business and management
- Law (preferably business law)
- Or accountancy and finance
But again, this isn’t essential. It’s just helpful in finding the right candidate for the job. Ideally, those who have been in the position before – or have completed a training or apprentice scheme like the ones offered by the Chartered Governance Institute UK and Ireland.
Company secretary salaries also vary by firm and seniority. Someone working as a company secretary for a billion-dollar corporation will be on a slightly different salary than someone working for a start-up. But if you’re considering whether your business needs one, it’s always a good idea to get rough salary estimates to factor into your costs.
Generally speaking, trainee corporate secretaries start at £20,000-£26,000 per annum in the public sector, which rises to £24,000-£30,000 in the corporate sector. For more established firms, salaries range between £83,000 to £130,000.
The top 25% of company secretaries earn above £184,000, while group company secretaries could be on salaries as high as £311,000.
Now, you won’t be expected to hire a corporate secretary on a salary that high as a startup, so don’t be frightened by these numbers. But remember that they will be classed as an officer of your business and handle a lot of important work for your firm – so you really shouldn’t skimp out on their salary.
After all, they are the barrier between facing hefty fines and offences if you do not adhere to all the rules, regulations and laws for your business and sector.
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Step 2: Post your listing and interview candidates
Once the job description is finished, it’s time to advertise and get the right applicants through the door. There are plenty of options for advertising jobs in the UK, including job boards like Indeed, or using social platforms like LinkedIn.
You can also consider using recruitment agencies to help you with this process but be warned that it will cost you more to hire this way. Typically, agency fees are around 15-30% of the candidate’s first-year salary, which is paid as soon as they’re hired (regardless if they stay the entire year or not!).
When interviewing for a company secretary, you should look out for skills such as:
- Great communication skills, both verbal and written, as they will be the first point of contact for your shareholders.
- Attention to detail and high organisational skills, as they will be in charge of keeping all your records accurate and up to date.
- Mathematics and accounting skills, which will help in filing and checking over annual reports for the Companies House.
- Trustworthiness and discretion, as they will be privy to sensitive business information and required to keep documents secure.
- Planning and problem-solving skills, which will help them ensure the business stays compliant and assist the board with strategic decision-making.
When interviewing candidates, we recommend taking your time and making detailed notes throughout the process. Even if you’ve got a great memory, this will help you make final calls between candidates – particularly if you have more than one strong applicant to choose from. You can find more hiring tips in our guide to recruiting employees for small businesses.
Recommended Company Secretary Service:
Prefer to outsource your company secretary so that it’s one less thing to worry about?
Our top-rated company formation agent, 1st Formations, offer a full company secretary service (even if you didn’t use them to form your company).
It includes a named secretary at Companies House, a dedicated account manager, and maintenance of your statutory registers – including your annual confirmation statement.
Click here to visit their site
Step 3: Offer the job
Once you’ve found the right person, it’s time to offer the job. To do this, you should prepare a formal job offer letter, which will include:
- Job Title and Offer Confirmation: Clearly state the position being offered (Company Secretary!) and confirm the candidate’s selection.
- Conditions of the Offer: Specify any conditions that must be met for the offer to remain valid, such as eligibility to work in the UK or providing necessary qualifications.
- Terms of Employment: Detail the salary, hours, benefits, pension, holiday entitlement, and other relevant terms.
- Start Date and Probationary Period: Indicate the expected start date and any probationary period that the candidate will need to complete.
- Acceptance Procedure: Clearly outline the steps the candidate needs to take to accept the offer and begin working.
If you haven’t already, you must ensure you’re registered as an employer with HMRC and set up payroll services.
You can find out more about how to set up payroll and PAYE systems in our complete guide to payroll here.
Deciding if a company secretary is right for your business
As we’ve outlined before, it’s not a requirement for limited companies to have a corporate secretary. However, they can be an incredibly useful asset, as they are responsible for ensuring you adhere to all laws, regulations and responsibilities.
They also take care of a lot of the admin that comes with owning and running a business, like keeping records up to date, filing reports and dealing with correspondence with Companies House or shareholders.
These responsibilities will fall on you if you don’t have a company secretary. This might be fine for some people (particularly if you’re starting up and the only shareholder!). But it doesn’t work for everyone, as the more time you spend on these tasks, the less time you have to focus on your business.
Luckily, you don’t have to make the decision straight away. Company secretaries can be appointed later on in your firm’s life – meaning that you could go without for a while, but as you go and expand, you can get one on board to help you take care of all the little details and tasks and free up some much-needed time.
And speaking of freeing up time, we’re home to some of the best tips, advice and reviews for UK businesses. See how much time we can save your business and help you progress with one of our below guides:
- All you need to know about starting and running a limited company
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- How to extract profit from a limited company in the UK
- Assigning shares in a limited Company: a beginners guide
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Whatever your business needs, we’re always here to help at Business4Beginners.
