MacRoberts Corporate Law e-update 08/04/08

COMPANY SECRETARIES OF PRIVATE COMPANIES - A DYING BREED?

The provisions of Part 12 of the Companies Act 2006, changing the law relating to
company secretaries, came into force on 6 April 2008. These provisions, whilst not
quite leading to the company secretary becoming an extinct species, are likely to
mean that they will become thinner on the ground as far as private companies are
concerned.

Q. What changed on 6 April 2008?
A. The main changes which came into force on 6 April are that private
companies are no longer required to have a company secretary, although they may
still opt to have one. NOTE: Public companies are still required to have a company
secretary.

Q. Will private companies have to amend their Articles of Association to reflect
the changes brought in by the Act?
A. A private company whose articles immediately before 6 April 2008
expressly required it to have a company “with a secretary” must amend their articles
(to remove that requirement) if they no longer wish to have a company secretary.

Q. What happens to the existing company secretary of a private company?
A. The existing secretary will remain in office unless and until he is removed or
resigns. He does not have to be replaced unless the Articles specify this.

Q. What is the procedure if a private company opts not to have a secretary?
A. 

1. The company’s Articles need to be checked and amended if
   required.
2. Any newly amended Articles must be filed with Companies House.
3. The secretary needs to be removed (or be asked to resign) and any
   associated employment and contractual issues surrounding this resolved. (You
   should bear in mind that the secretary may have employment rights relating to his
   position as secretary and take legal advice if you are in any doubt as to whether
   there could be employment law implications of removing a person (or asking a
   person to resign) from office as company secretary.
4. A Form 288b should be lodged with Companies House and the duties of the
   outgoing secretary should be transferred to another individual.

Q. Who takes on the company secretarial jobs that the company secretary
used to perform (if he is removed/resigns)?
A. There will be no change to the administrative burden undertaken by the
company as a result of the change of company secretary, the tasks will simply be
completed by someone else.

If you require any further assistance or information please contact Robert
Burns on 0141 332 9988 or Alan Kelly on 0131 229 5046

© MacRoberts 2008