The idea behind the existence of the office of the Company Secretary is to have a company officer to provide a link between the Company and its Board of Directors on the one hand and the Shareholders on the other.
In view of last year’s regulatory intervention of the Corporate Affairs Commission (CAC; the Company’s regulator) requiring every Company to have a Company Secretary and requisite forms filed to verify same, we have proceeded to shed light on the following:
Who is a Company Secretary?
Previously, under Common Law, a company secretary was regarded as a mere clerk with no ostensible authority to bind the company. His primary business was seen as the running of errands
for the Directors. Over time however, the status, role and position of a Company Secretary evolved to a high ranking officer, usually part of the management of the company.
By virtue of Section 293 of the Companies and Allied Matters Act 2004 (CAMA), every company is required to have a company secretary. In the absence of a company secretary or an assistant, any officer authorized by the Board of Directors may in the interim carry out the secretary’s functions. Inferring from the words of CAMA, a Company Secretary is an officer of a company appointed by the directors to perform certain legal and administrative duties, with the requisite knowledge and experience to discharge these duties.
The duties of this office also come to play in the definition of a company secretary in the Black’s Law Dictionary; i.e., an officer charged with the direction and management of that part of the business of the Company concerned with keeping records, official correspondence, giving notices, countersigning documents etc. This officer holds ostensible authority to carry out certain legal and administerial duties and may also make binding representations for the Company.
Qualifications and Appointment
From CAMA it is clear that the basic qualification for the secretary of a private company is to have the requisite knowledge and experience to discharge the functions of the position. It can be argued however that, although no express professional qualification was mandated by CAMA for company secretaries of private companies, in practice it is advised that when making the appointment the criteria statutorily specified regarding a Public company be considered. These include:
(a)a member of the Institute of Chartered Secretaries and Administrators; or
(b)a legal practitioner within the meaning of the Legal Practitioners Act; or
(c)a member of the Institute of the Chartered Accountants of Nigeria or such other bodies of accountants as are established from time to time by an Act; or
(d)any person who has held the office of the secretary of a public company for at least three years of the
five years immediately preceding his appointment in a public company; or
(e)a body corporate or firm consisting of members each of whom is qualified under paragraphs (a), (b),
(c), or (d).
The duty of appointing and removing a company secretary lies on the board of directors. A notification of the company secretary’s appointment is statutorily required to be filed with the CAC, in the absence of which such appointment shall not be duly recognised by the Commission.
Where the appointment is pre-incorporation, the proposed directors are to instruct the promoter as to whom to appoint. On receiving this instruction, a Form CAC 2.1 (Particulars of the Person who is the secretary of a company or of any changes therein) is to be duly completed, signed and filed, alongside other incorporation documents, with the CAC, notifying it of the secretary’s appointment.
However, where the appointment is post incorporation, a resolution by the directors appointing the secretary is to be filed within 14 days of its passing, alongside the CAC Form 2.1. On doing this and paying the required fees, the CAC will be deemed duly notified of the company secretary’s appointment.
Duties and Responsibilities.
The Company Secretary is responsible for the efficient administration of the company. The duties and responsibilities as provided under Section 298 of CAMA include:
a. Attending meetings of the company, board of directors and its committees and rendering all necessary secretarial services in respect of these meetings and advising on compliance by the meetings with the applicable rules and regulations.
b. Maintaining the registers and other records required to be maintained by the company by CAMA
c. Rendering proper returns and giving notification to CAC as required by CAMA;
d. Carrying out such administrative and other secretarial duties as directed by the directors or the company.
By Section 298(2) of CAMA, the company secretary shall not, without the authority of the board of directors, exercise any powers vest in the directors. Its powers are restricted largely to administrative powers and not management powers.
However, case law extends these duties to include the signing of contracts connected with the administrative affairs of the Company and also places on the company secretary a fiduciary duty to the Company, except when acting as the Company’s agent.
The Company Secretary is also to act as an intermediary between the company and outside agencies and is to assist with corporate acquisitions and disposal, custody and proper use of the company seal, whilst also ensuring the effectiveness of documentation and due diligence effected on the Company’s behalf. The company secretary may also be assigned other responsibilities by the general meeting or the board of directors.
Can a Firm act as a Company Secretary(ies)?
A company secretary could be an employee of a company or an individual or a firm of professionals recognized by CAMA to act in that capacity. A Firm or body corporate formed by and consisting of members qualified as either Chartered Secretaries, Legal Practitioners, Chartered Accountants or Experienced Secretaries can act as Company Secretaries. Section 295 (e) of CAMA sheds more light on this by stating that a body corporate or firm consisting of members of either of the following bodies qualify to be appointed as a company secretary:
a. Chartered Secretaries and Administrators.
b. A legal practitioner within the meaning of the Legal Practitioners Act.
c. Institute of Chartered Accountants of Nigeria.