Can I Be a Director and Secretary of My Company?

In Short

• A company secretary ensures compliance with Australian corporate law, including lodging reports and maintaining records.
• They have similar duties to directors, such as acting diligently, avoiding conflicts of interest, and ensuring proper corporate governance.
• Companies must appoint a secretary who meets legal requirements, with public companies needing at least one residing in Australia.

Tips for Businesses
To ensure compliance, regularly review the company secretary’s duties and governance practices. Prioritise training and clear policies, especially in risk management, board conduct, and meeting protocols.

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Table of Contents

• What are the Legal Duties and Responsibilities of a Company Secretary?
• What are the Typical Tasks a Company Secretary Might Perform?
• How Do You Appoint and Remove a Company Secretary?
• Company Secretarial Services
• Legal Implications of Non-Compliance in Company Secretary Functions
• Emerging Legal Considerations for Company Secretaries
• Key Takeaways
• Frequently Asked Questions

Whether you run a small local business or a large corporate enterprise, if you operate your business as a company, it is likely you have a company secretary. The main responsibility of a company secretary is to ensure that the company complies with all the relevant regulatory requirements. Failure to do so can lead to your company receiving fines from ASIC. This article will discuss a company secretary’s essential duties and responsibilities, the tasks a company secretary might perform, and the methods for appointing or removing a company secretary.

What are the Legal Duties and Responsibilities of a Company Secretary?

A company secretary assists in governing and monitoring how a company operates. This includes supporting the board of directors. Part of the role of a company secretary involves performing tasks to ensure the company is compliant with Australian corporate law. These include maintaining a registered office and lodging financial reports to ASIC. Part of the responsibility of a company secretary may also involve them reporting to ASIC of changes involving the:

• company office address;
• members register;
• share structure (of proprietary companies); and
• issuing of any shares.

A company secretary is also considered to be a company ‘officer’ under Australian corporate law. This is in addition to the tasks that specifically apply to the role of a company secretary. As a result, they have many of the same duties as directors. 

These duties include:

• acting with care and diligence;
• acting in good faith and for a proper purpose;
• not improperly using their position to gain an advantage for themselves or someone else. They may not cause detriment to the company; and
• not improperly using information obtained under their position.

What are the Typical Tasks a Company Secretary Might Perform?

In addition to the legal obligations imposed by Australian corporate law, a company secretary will typically perform a number of tasks as part of their role. Generally, the typical tasks a company secretary will perform include:

• ensuring that the business discussed at meetings is accurately recorded in the minutes;
• confirming that meetings are called and held in the appropriate manner; 
• monitoring the practice of the board to ensure that policy and procedures are followed;
• preparing and sending reports to the board;
• ensuring that the company’s financial reports are properly maintained;
• providing the board with advice on governance matters;
• helping to induct new directors;
• facilitate the professional development of existing directors; and
• updating, implementing and maintaining compliance policies and procedures for the company. 

These new responsibilities centre around the performance of the board and include:

• advising the board on standards of ethical corporate behaviour;
• ensuring that the board has the information needed to make an informed decision;
• organising board performance reviews;
• being involved in risk management and corporate responsibility matters;
• managing director induction;
• organising insurance for directors and officers;
• forming new policies for the board; and
• advising the board on the best way to conduct company business. This includes giving guidance on the consequences of the board’s actions.

The role of the company secretary can be quite broad. However, the tasks of a company secretary will vary depending on the size of the company and the structure of the board. A large company with numerous shareholders and a board of directors will generally require the company secretary to undertake more tasks and greater responsibility. On the other hand, a smaller company with only a handful of shareholders may not require as much input from the company secretary. 

How Do You Appoint and Remove a Company Secretary?

Australian corporate law outlines the rules and requirements for appointing and removing a company secretary. 

Firstly, a public company must appoint at least one company secretary. At least one of the company secretaries must ordinarily reside in Australia. This means they must regularly live in Australia. A private company is not required to appoint a company secretary, but if it does, at least one must ordinarily reside in Australia. The company secretary can also be a director.

Secondly, a company secretary must be :

• a natural person (that is, not a company); and
• at least 18 years of age. 

The company directors appoint the company secretary and determine the terms and conditions of that role. This includes nominating the secretary’s salary, if any. Once appointed, the company must notify ASIC within 28 days, and the person must give their signed consent to act as the secretary before the appointment is official. The company must keep this consent.

When a company secretary leaves, the company must notify ASIC within 28 days. This is mandatory unless the secretary has given written notice along with a copy of their resignation letter. 

A company secretary does not need any particular qualifications or experience to be appropriate for the role. However, companies expect their company secretaries to advise them on legal compliance and corporate law. Therefore, it is common for company secretaries to have legal qualifications. Often, the company secretary will also be the company’s general counsel. 

Once appointed, the company secretary will generally report to the directors, including the chief financial officer (CFO) or the chief executive officer (CEO) of the company (if any). The secretary will also often report to the chair of the board in larger companies or where the company secretary provides the board with advice.

Company Secretarial Services

The position of company secretary is a complex role that requires expertise and time. By ensuring that the company complies with the laws and processes imposed by Australian corporate law and regulations, a company secretary works to ensure the business is exposed to fewer risks. Therefore, the role of a company secretary is crucial. 

If your business does not have an existing director or other person who can act as company secretary, you may wish to engage an external company secretarial service to fulfil this role for the company

Directors' Duties Complete Guide

If you are a company director, complying with directors’ duties are core to adhering to corporate governance laws.
This guide will help you understand the directors’ duties that apply to you within the Australian corporate law framework.

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Legal Implications of Non-Compliance in Company Secretary Functions

Your role as the company secretary is critical in ensuring that your corporation adheres to legal frameworks and regulatory requirements. Non-compliance with these duties can lead to serious legal implications, financial penalties and damage to a company’s reputation. 

A primary legal responsibility is ensuring the company maintains up-to-date statutory registers (members, directors, shares, charges etc.). Inaccuracies or failing to make registers available for inspection can trigger legal actions against the company and officers for breaching the Corporations Act.

Company secretaries oversee compliance with continuous disclosure requirements, particularly managing conflicts of interest and related party transactions. Lack of proper disclosure or inadequate conflict management can constitute breaches of directors’ duties. Such breaches risk civil penalty proceedings by ASIC and shareholder class actions for any losses caused.

The secretary must also ensure board/shareholder meetings comply with the Corporations Act and company constitution requirements. Non-compliance can invalidate pivotal decisions, undermining corporate governance and leading to further legal challenges.

Given the breadth of legal responsibilities, the company secretary’s role is pivotal in safeguarding against corporate governance risk. Prioritising compliance, maintaining robust records, and facilitating effective governance are essential to prevent legal repercussions and protect the company’s interests.

Emerging Legal Considerations for Company Secretaries

Recent corporate law and governance developments have expanded the scope of a company secretary’s responsibilities. The increasing complexity of regulatory compliance, particularly in the digital age, requires company secretaries to maintain oversight of various emerging legal obligations. This includes:

• staying current with changes in financial services laws;
• privacy regulations; and
• corporate governance standards that may affect the company’s operations.

Personal Liability

Personal liability considerations for company secretaries have also evolved. Recent court decisions have emphasised the importance of active engagement in governance processes rather than merely performing administrative functions.

Company secretaries must demonstrate they have taken reasonable steps to ensure compliance and can be held personally liable for failures in certain circumstances. This heightened scrutiny makes it crucial for company secretaries to maintain detailed records of their decision-making processes and any advice sought from professional advisors.

Technology 

The intersection of technology and corporate governance has created new legal challenges. Company secretaries must now consider the legal implications of electronic record-keeping, digital signatures, and virtual meetings. They need to ensure that electronic communications and records meet legal requirements. This includes:

• implementing appropriate measures to protect sensitive corporate information; and
• ensuring compliance with data protection regulations.

When combining the roles of director and company secretary, individuals must be particularly mindful of potential conflicts of interest. They should establish clear protocols for managing situations where their duties as a secretary might conflict with their responsibilities as a director. This might include:

• seeking independent advice; or
• implementing additional oversight mechanisms to ensure transparency and accountability in decision-making processes.

Modern Business Operations

The complexity of modern business operations means company secretaries must balance traditional responsibilities with emerging requirements. This may involve working closely with IT departments, risk management teams, and external consultants to ensure comprehensive corporate governance frameworks are maintained and updated regularly. To meet these evolving challenges, company secretaries should:

• regularly update their knowledge of digital governance tools;
• maintain awareness of changing regulatory requirements;
• participate in professional development programs; and
• network with other governance professionals.

Key Takeaways

The company secretary plays a vital role in the company. Most importantly, the company secretary should be capable of managing their duties. They can do so by ensuring the company complies with the legal and regulatory requirements imposed on a company by Australian law. Regardless of the size of your business, your company secretary must be aware of the legal requirements of their role. 

If you have any questions about the role of your company secretary, our experienced commercial and business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions