Company Secretaries: What you need to know

Company Secretaries: What you need to know

What is a company secretary and when is it needed?

Q1: What is a company secretary?

A company secretary is an officer of a company who usually has general responsibility for its administration. This is different to the traditional ‘secretarial’ (see Assistant) role which will be required within the company. This function aims to support the corporate governance arm of the company and to ensure compliance across these areas is maintained.

There is no legal requirement for a private company to have a company secretary. The precise duties and responsibilities of any company secretary will vary depending on the size of the company and the experience of the secretary. Typically, a company secretary will be responsible for arranging and documenting board and shareholder meetings, keeping company records, and filing documents at the CIPC. See Q 3 for a list of likely duties.

Q2: Does my company need to have a company secretary?

No, if your company is a private company limited by shares (as the vast majority of SMEs are).

The only exception to this is if your company’s articles of association say you have to have one. This is not the case if your company uses the model articles.

You can choose to have a company secretary if you want, although it is relatively unusual these days for an SME. Keep in mind that someone will need to perform the duties of this function and these are often viewed as onerous and 

Q3: What does a company secretary do?

As with all roles within your business, you can decide for yourself what their responsibilities will be. There is no formal list of a company secretary’s duties.

Typically, if you decide to appoint one, your company secretary will deal with administrative tasks like:

  • arranging meetings of your directors and shareholders and dealing with paperwork like agendas, notices and minutes;
  • filing documents at the CIPC when legally required, including your company’s confirmation statement and annual accounts;
  • keeping your company’s statutory registers and records up to date;
  • signing some legal documents, such as deeds, on behalf of the company; and
  • the paperwork for share transfers or share issues.

If you want to appoint a company secretary, you can use our Letter of appointment for a company secretary to record their duties and the terms of their appointment.

Your company secretary, like each of your directors, will be an officer of your company. If your company fails to comply with the law, any company officer can be personally liable if they are involved in the failure.

Q4: Why would I want to appoint a company secretary?

Deciding to appoint a company secretary is a commercial decision. If there is a lot of internal administration to do in your business, it can be worth it. See Q 3 for a list of the kind of tasks a company secretary would normally do.

A company secretary may be suitable for your company if, for example, it falls into one of the following categories:

  • you have a sizeable business with numerous shareholders;
  • you wish to promote good corporate governance to enhance your company’s reputation; or
  • you have, or wish to attract, external shareholders such as private equity or venture capital investors.

Who to appoint as secretary

Q5: Who can act as my company secretary?

Anybody can be company secretary if you have a private company, as long as they are not your company’s auditor. No formal qualifications are required.

You should not appoint somebody who is disqualified from acting as a director or who is an undischarged bankrupt. Neither is allowed to be involved in starting, managing or promoting a company, which a company secretary is likely to do at some point.

Q6: If my company needs a company secretary, who should I appoint?

If you have a private company, you can appoint almost anyone (see Q 5). In practice, who you appoint will depend on your company’s needs and budget, and could be:

  • one of your directors (so long as they have time and it does not get in the way of their duties and responsibilities as a director);
  • an employee;
  • one of your professional advisers such as your accountant; or
  • a professional company secretary.

Q7: Does a company secretary need to have qualifications?

No formal qualifications are needed in order to be company secretary of a private company.

You should however bear in mind the responsibilities that you intend your company secretary to carry out (see Q3 and Q4) and be satisfied that any person you appoint has the necessary skills and experience.

For interest, a company secretary of a public company needs to have one or more formal qualifications specified by law. The law relating to public companies is outside the scope of our service and who we intend to support. 

Q8: Can a director also be a company secretary?

Yes. In practice, directors of private companies commonly carry out the functions of a secretary without being formally appointed.

Q9: Can another company be my company secretary?

Yes. Your company secretary does not necessarily have to be a human being. You are allowed to appoint another company as your secretary, although this is not common for smaller companies.

Q10: Can my accountant be my company secretary?

Yes. If your company is a private company, you can appoint anyone – for example, one of the directors or a member of your family. You can also appoint your company accountant (although not your company’s auditor) or a lawyer, for which you will need to pay a fee.

Q11: Does a company secretary need to live in South Africa?

No. There is no legal requirement for a secretary of a South African company to be a South African citizen or resident (or, in the case of a company, be incorporated in South Africa), as long as any person you appoint is able to carry out their duties satisfactorily.

Q12: How do I appoint or remove a company secretary?

If you wish to appoint a company secretary when you first set up the company, you do so as part of the application process. You must give the secretary’s name and an address where they can be reached officially, which can be the company’s registered office. See Setting up a new company for detailed guidance on the process for setting up a new company, and for everything you are likely to need for the job, see our Starting a company flow.

Once your company is up and running, you can remove a company secretary and appoint a new one if you want, or appoint one for the first time if you did not do so initially. See Appointment, resignation and removal of a company secretary for detailed guidance on appointing or removing a secretary.

Company secretary’s contract

Q13: Will a company secretary automatically become an employee on appointment?

No, a company secretary does not need to be an employee, although in practice, it is common for them to be one.

Q14: Do I need a contract for a company secretary?

In practice, yes. Whilst there is no legal requirement to have a written contract in place between your company and its company secretary, it is important that the terms of appointment and scope of the secretary’s responsibilities are clearly recorded so as to avoid any dispute about who is responsible for what tasks.

See Q 15 for what form of contract you should use.

Q15: What contract should I use for a company secretary?

The type of the contract will depend on whom you appoint:

An employee

If you appoint a member of your company’s existing staff, or a new member of staff, you should record the secretary’s responsibilities in their employment contract. For template employment contracts you can use you can find these in our document resource tab.

A person outside the company

If you appoint a non-employee to be your company secretary, it is recommended that you agree to their responsibilities and terms of appointment (including pay and any notice period) in writing.

Your accountant or lawyer, or (rarely) another company

If you are appointing your accountant or lawyer or another company, they will likely have their own standard terms that they will want you to agree. Review these thoroughly and take legal advice if they look complex or if you have concerns. For access to a specialist lawyer in a few simple steps, you can use our Find a Lawyer service.

Before entering into any agreement with a company secretary, your company will need to approve it. If your company has the model articles, this should be done by your directors. It is best to do this at the same time that they approve the appointment. See How to appoint a new company secretary for detailed guidance on the process for appointing a new company secretary.

Liability and records of a company secretary

Q16: Can a company secretary be personally liable for their actions?

Yes, if your secretary has been at fault for offences committed by your company. There are lots of offences that a company can commit, many of which are easy to forget. For example, most failures to keep proper internal records, or to inform the CIPC of changes within your company are offences.

If your company goes bust, your company secretary could be liable for some serious offences such as fraud. The penalty can include disqualification from being a company director.

Your company can take out personal liability insurance for a company secretary and could choose to indemnify them against any losses caused by their failures.

Q17: What records of my company secretaries do I need to keep?

After you set up your company, you are required to keep an up to date register of secretaries to record all appointments of company secretaries.

The register is publicly available and must be kept at your company’s registered office, at a single alternative inspection location or on the CIPC central register.