All of us at Legalese are excited to announce the launch of our new Company Secretarial (Co-Sec) service offering. With this launch, we’re able to assist our clients by taking one step deeper into easing the administrative burden of staying compliant.
But before we get into that, you may be wondering, what on earth does a Company Secretary do?! Well, let’s briefly try to break that down for you.
What is a Company Secretary?
The Companies Act defines a Company Secretary as an officer of the company. The first thing to clear up is that a Company Secretary is not a secretary in the traditional sense of the word. So, we’re not going to be booking your appointments, answering telephone calls or printing documents.
A Company Secretary’s job is to oversee the administration, compliance, and corporate governance of the company, especially for big companies where these sorts of things can easily slip through the cracks.
Company Secretaries are essentially responsible for making sure that company decisions are recorded properly, share registries are maintained (so it’s clear who owns that company) and that all the other elements of company compliance are kept up to date so that a company doesn’t run into trouble with its shareholders or regulators. It’s pretty important to get right.
What is the role of a Company Secretary?
Apart from the Company Secretary taking on the role of an officer of the company, section 88 of the Companies Act outlines the duties of the Company Secretary. There are others, but some of the most important duties are
- guidance to the directors regarding their responsibilities and powers,
- ensuring that the directors of the company are aware of any laws and regulations that can affect the company,
- reporting any non-compliance with the MOI, rules of the company and Act to the board of the company,
- recording the minutes of board, shareholder, and committee meetings,
- certifying the company’s annual financial statements,
- ensuring that a copy of the company’s annual financial statements is sent in accordance with the Act, to every person who is entitled to those statements, and
- carrying out all other functions necessary and required in terms of the Act.
Do all companies need to comply with this?
The answer here is a clear yes.
All companies, even State-owned and public companies are required by law to have a designated Company Secretary.
All private companies (so if you have Pty Ltd at the end of your company name, then that’s you) are not required to have a Company Secretary unless their memorandum of incorporation requires them to have one.
While a private company does not require a private Company Secretary, the company must still comply with certain requirements found in the Companies Act. So, for example, if you’ve got investors in your company and they may need to understand how company decisions are made and whether these decisions had the approval of all shareholders, keeping those sorts of records is the job of the Company Secretary.
How do you know if your company is compliant?
The Company and Intellectual Property Commission (CIPC) provides a comprehensive checklist for company compliance. These include the following:
- keeping records of the company documents,
- keeping accurate financial records for the company on hand,
- filing annual returns on time,
- filing audited financial returns on time (if required in terms of the company’s MOI), and
- notifying CIPC of any change in company details and structure.
If you are up to date with all of these, you are compliant. If not, then we may need to chat.
What happens if you are not compliant?
So, unfortunately, if you are not compliant, your company and possibly your directors will inevitably run into some trouble.
If your company is non-compliant, there are hefty penalty fees for which your company can be liable. In addition to that, the time and expenses spent on fixing the issues can become hefty and taxing on your company as well.
This could damage your company and the shareholders who have invested their money into the growth and development of the company.
If you are a director of the company, you could be held liable for reckless and/or negligent behaviour and you can be held criminally liable for non-compliance. That is not a position that you would want to be in at all.
We don’t want to scare anyone, but it’s the law and we’re just the messengers.
How can we help you?
Traditionally the role of the Company Secretary has been a manual process and the documents have been stored in a dusty file at the bottom of a rusty cabinet. Not anymore.
Here at Legalese, we offer a range of Co-Sec services, from annual company maintenance and record-keeping, company registrations, maintaining share registries and certificates, documenting director changes, BEE compliance, and much more.
You can check our website for a comprehensive list of the co-sec services we offer. Our aim is to assist companies with the administrative shlep and get your company compliant.
Contact us today to see how we can assist your company.
– Rushni Ebrahim