1. What company administration is required?
Under the company law, the officers of a company are responsible for:
- ensuring that all the legally required information is filed with Companies House (see 9)
- maintaining the company’s registered office (see 10)
- keeping the company’s statutory books and records (see 11)
- looking after the security of key legal documents (see 12)
- organising and recording board meetings (see 13)
- organising and recording general meetings of the shareholders (see 14)
- disclosing company details on premises and stationery, including the company’s website
Officers are also responsible for complying with a host of other laws, such as employment, health and safety, tax, data protection, distance selling, etc. Someone must also deal with administrative tasks such as managing buildings, arranging insurances, maintaining domain names and trademark registrations, etc.
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2. Who is responsible for company administration?
The directors are ultimately responsible for ensuring the company complies with the law, including the Companies Act.
The company secretary, if one is appointed (see 3), shares legal responsibility for Companies Act compliance with the directors.
Even if the directors choose to delegate day-to-day responsibility for Companies Act compliance to any secretary they appoint, the directors will remain jointly responsible with the secretary for any default.
The directors may also give the secretary or another employee responsibility for legal compliance in other areas of law, and for other administrative tasks (see 1). The extent of such responsibilities will usually be set out in an employee or secretary’s contract of employment. The directors should remember that, even if they choose to delegate responsibility for legal compliance and administration in this way, they will remain responsible for any default.
3. Do we have to have a company secretary?
Private companies do not need to have a company secretary, and the majority of new start-ups and SMEs do not have one. Public companies (eg those listed on the stock exchange) must still have a secretary.
In companies without a secretary, responsibility for company administration, Companies Act compliance, and filing at Companies House will fall solely on the directors.
4. Can we appoint anyone as company secretary and how would we appoint them?
In a private company, the company secretary is not legally required to have any formal qualifications. Nevertheless, if you decide your company needs a secretary, it is a good idea for your company secretary to have some experience or training.
There are rules stopping certain people from being a secretary. For example:
- the company’s auditor cannot be the company secretary
- an undischarged bankrupt cannot be the company secretary (unless given permission by the court)
The process for appointing a company secretary will be set out in your company’s articles of association. Many SME and start-up companies have the default model articles of association, which require the approval of the board in order to appoint a secretary. You should record any appointment in board minutes or a written board resolution (or a sole director resolution, if your company only has one director). You should also file details of the appointment at Companies House.
5. Is the company secretary also a director of the company?
A company secretary is not automatically a director, though there is nothing to stop them from being appointed as a director as well.
Unless a company secretary is also appointed as a director, they do not have the powers of a director. They are, however, an ‘officer’ of the company. This means that they share the legal responsibilities for administrative tasks such as filing at Companies House and maintaining registers and minutes (see 9 and 11), with the directors.
6. Who can sign administrative documents on the company’s behalf?
Anyone who is authorised to do so by the directors, or is empowered to do so under the law.
For example, if the company has a company secretary:
- A secretary can sign most of the forms required by Companies House.
- A secretary can sign documents, such as the minutes of a board meeting, to authenticate them.
- If a secretary and a director sign a document, it has the same validity as if two directors sign the document.
- If a secretary signs a contract of an administrative nature (such as an insurance contract), it is likely to be binding on the company.
You can also authorise any other employee (usually of sufficient seniority) to sign documents on your company’s behalf. Such authorisation might be included in the relevant person’s employment contract, can in some cases be inferred by the position or job title of the employee, or can otherwise be granted by the board to authorise the signature of a specific document if preferred.
7. Who does a company secretary report to?
Normally, a company secretary will work most closely with and report to, the chair of the board. However, it is good practice for ultimate authority over the secretary to lie with the board of directors as a whole, rather than any individual director. For example, any decision to remove the company secretary from office should be taken by the board as a whole.
This is because a company secretary has a role in providing impartial advice and ensuring that the company is properly governed by the board. This could be compromised if the chairperson (or some other director) can exert undue influence on them.
8. Can we outsource the filing and record-keeping requirements in the Companies Act?
Yes, but the directors and, if the company has one, the company secretary, will also continue to be responsible for the proper administration of the company (see 2).
Nevertheless, in some cases it can be useful to delegate routine administration to a specialist service provider, freeing the company’s officers for other tasks. An internal member of staff without prior secretarial experience, or a junior or unqualified company secretary, may find that they need external support while they become accustomed to carrying out the role.
9. What company information do we need to send to Companies House?
The directors (or company secretary if the company has one) are responsible for checking that the information Companies House holds about your company is correct, and either confirm that it is or, if it is not, bring it up-to-date. You do this by making filings after certain changes to your company (see below), and by filing a ‘confirmation statement’ each year.
The confirmation statement replaces the previous ‘annual return’. There is a fee to pay with the confirmation statement – although you can update your company’s public record as many times as you need to and you’ll only be charged once a year. It is quickest and cheapest to file your company’s confirmation statement online.
You are also required to file a copy of your annual report and accounts at Companies House each year. Private company reports and accounts must be filed within nine months after the company’s year end. There are automatic civil penalties for late filing of annual accounts at Companies House, depending on how late they are.
Other filings which you must make with Companies House include:
- changes to the articles, and some shareholder resolutions
- changes to directors or their details
- changes to the register of Persons with Significant Control (PSC register)
- changes to the registered office address
- changes to the company secretary or their details (if the company has one)
- any change to the company’s accounting reference date (ie your year end)
- issues of new shares or changes to the company’s share structure
- if the company grants a mortgage or charge over an asset
Quoted companies (eg public companies listed on the stock exchange) are also required to report on: the numbers of men and women employed within the business; their strategy and business model; their greenhouse gas emissions; human rights issues and policies and the efficacy of those policies. Most start-ups and SMEs are private companies, so will not need to report on these matters.
Failing to file documents on time can lead to severe penalties for the company and its officers. Failure to file particulars of a mortgage or charge within 21 days after it is created can mean it is unenforceable and the money borrowed has to be paid back to the lender. You should also be aware that it is a criminal offence not to file some of this information.
Quick guide to company books, records and filings
Read Sparqa’s summary of all of the most common filings you will need to make, and when you are required to make them.
10. What is a PSC register and should my company have one?
UK companies are required to identify and record the people who own or have significant control of their company on a Persons with Significant Control (PSC) register, and send that information to Companies House.
If a person or company holds or controls more than 25% of your company’s shares or voting rights (whether in their own name or indirectly) you must:
- identify the person or company concerned
- gather specified particulars from them
- enter the particulars in your company’s PSC register, and
- file details publicly at Companies House.
Failure to do so is a criminal offence. The same applies if a person or company is legally entitled (directly or indirectly) to appoint or remove a majority of the board of directors of your company. An individual may also be a PSC if they exercise ‘significant influence or control’ over your company (either directly or via a trust or firm).
For a recent start-up or SME with a simple ownership structure, it is often relatively clear who a PSC is. For larger or more established businesses, it can become more difficult – for example, if there are outside investors, lenders or creditors with special rights to control or influence the company in certain circumstances under their agreement with it, or if company shares are held in a trust.
Sometimes it might also be difficult to get the necessary particulars from a PSC – for example, an individual exercising indirect control over the company who does not want this made public. Take legal advice on what to do if you are not sure whether a person or legal entity exercising indirect control should be entered in your company’s PSC register, or if a suspected PSC won’t co-operate with you.
Note that there must always be an entry of some sort in your company’s PSC register – it should never be blank. For example, if your company has no PSCs the PSC register must contain a statement saying there are none.
PSC’s particulars also have to be notified to Companies House on the incorporation of a new company and kept up-to-date with any changes. You will need to confirm the identity and details of your PSCs in your company’s confirmation statement (which replaces the previous annual return). In addition, if there are any changes to the identity or particulars of PSCs, these must be notified to Companies House within 28 days. You have 14 days to enter the change in your own company PSC register. This includes changes in the nature of the control PSCs exercise in relation to the company. Changes should be notified to Companies House online or on official forms PSC01 to PSC09.
How do I identify my company’s PSCs?
How to identify and notify people with significant control of a company (PSCs).
11. What are the requirements for the company’s registered office?
Every company is required to have a registered office. This is an official address to which Companies House will send any correspondence. It can also be used by anyone wishing to send you a legal document, such as a statutory demand for payment.
The registered office must be a physical place, not just a post office box. It’s important that you are able to receive any documents sent there. A simple option is to use your business premises as your registered office. Companies that outsource filing and record-keeping tasks to an external service provider sometimes use that service’s address as their registered office.
As well as having a registered office, you are legally required to display the company’s name outside the registered office (and every other place of business including any ‘inspection place’ where you keep available for inspection any company records such as statutory registers required under company law). You are also required to notify Companies House if you want to change your registered office, and any decision to change your registered office should be recorded in board minutes.
The signs at the registered office or inspection place must be displayed in a prominent position, so visitors can easily read them. Where a business location is shared by six or more companies, each company is only required to display its registered name for at least 15 continuous seconds at least once every three minutes, eg where it is using an electronic notice board, or it must make its registered name available for inspection, on a register, by any visitor to that office, place or location.
Changing a company’s registered office
Sparqa Legal has more detailed guidance on when and how to change your registered office.
12. What are the company’s statutory books and records?
The statutory books and records are records that you are legally required to keep. They normally include:
- a register of past and present directors and company secretaries
- a register of directors’ residential addresses (which is not available to the public)
- a register of shareholders and their shareholdings
- a register of Persons with Significant Control (PSC register)
- a register of debenture holders (if the company has issued any)
- copies of any mortgages or other charges over company assets
- minutes of board meetings
- minutes of shareholder general meetings
- copies of directors’ service contracts
- contracts with shareholders to buy back their shares
Shareholders have the right to inspect minutes of a general meeting, but not minutes of board meetings (unless, unusually, the articles of association or an agreement such as a shareholders’ agreement gives them that right). Registers are generally open to inspection by any member of the public – the exceptions are the register of shareholders and the PSC register, which can only be inspected for a ‘proper purpose’. Although unusual for a start-up or SME to receive such requests (as most of the information is readily available on the Companies House website), you generally have five working days to respond.
In the past, companies have had to keep their statutory registers available for inspection at either their registered office or at a ‘single alternative inspection location’ of their choice. Since 30 June 2016 private companies have been able to instead opt to keep some of their statutory registers at Companies House itself. This is, however, voluntary and, for a number of practical reasons companies usually choose not to take advantage of this option. You should take legal advice first if you are thinking of maintaining your registers at Companies House.
Generally, the register of directors’ residential addresses (see 16) and the residential addresses of individuals in the PSC register (see 17), are confidential and may only be disclosed in certain circumstances.
Template company registers
Sparqa Legal has template Company Registers you can customise and use for your company.
13. What legal documents does the company need to keep?
As well as the statutory books and records (see 12), you need to keep other legally important documents. These include:
- the company’s certificate of incorporation
- copies of the company’s articles of association
- any other important contracts with employees, customers or suppliers.
Records a company must keep
Sparqa Legal has further guidance and examples of documents you should consider keeping.
14. How are company board meetings organised?
A board meeting must be arranged if any director asks for one. All the directors must be given reasonable notice of the meeting.
Someone responsible must be mandated to take formal minutes of the meeting. If the company has a company secretary, this is usually entrusted to them. Once approved, they should be signed by the chairman of the meeting. They are then kept in the company’s minute book as the official record of the meeting and any resolutions which were taken.
Template for board minutes
Template for board minutes authorising a director’s conflict of interest (situational).
15. How are shareholder (general) meetings organised?
The board is usually responsible for calling general meetings. In addition, any shareholder or group of shareholders with at least 5% of the company’s voting shares can require the board to call a general meeting.
If your company is calling a general meeting, all directors and shareholders must be given written notice of any general meeting well in advance. The notice period is usually 14 days, although the articles can require a longer notice period, such as 21 days.
A meeting can usually be held on shorter notice – including immediately – if the holders of shares carrying 90% of the company’s voting rights agree it can (although the articles of association may specify a higher percentage).
Any decision requiring the approval of the shareholders can be taken at a general meeting. However, for a private company, shareholder approval can often be obtained more quickly and easily by circulating and passing a written resolution. Decisions at general meetings are passed either as ordinary resolutions, that can be passed by a simple majority of votes cast, or special resolutions, that require a 75% majority of votes cast. Copies of all special resolutions and some ordinary resolutions, passed at a general meeting must be filed with Companies House within 15 days.
16. Who is responsible and what happens if a company fails to meet its obligations under company law?
The company’s directors have primary responsibility for ensuring that the company meets the requirements of the Companies Act. The directors and any company secretary can be held jointly liable for failing to do so. If the company fails to file accounts, the directors are solely responsible, not the company secretary.
In circumstances where a company has failed to meet its obligations, the directors should correct the position as soon as possible and if necessary seek legal advice.
17. Can we keep directors’ residential addresses confidential to protect them from activists?
Directors are required to provide a service address (for example, ‘the company’s registered office’) to go in the company’s register of directors and to notify to Companies House. This service address is publicly available.
Directors must also confirm their residential address, but this must be kept confidential by both the company and Companies House. The residential address is ‘protected information’ – except in certain circumstances as set out below.
The company must maintain a separate register of directors’ residential addresses for directors who are individuals and make sure this is not open to public inspection.
The circumstances under which an address may be disclosed (or used) by Companies House are:
- To communicate with the director.
- To inform a public authority.
- To inform a credit reference agency – which can only use it for certain purposes (unless the director or proposed director, the company or a subscriber to the memorandum of a new company, has successfully applied to prevent the registrar from disclosing information to such an agency).
- If the director consents to the disclosure.
The application to prevent disclosure of residential addresses to credit reference agencies will only succeed if the applicant can show there is a serious risk they, or a person living with them, will be subjected to violence or intimidation as a result of the activities of a company of which they were, are, or propose to become a director, or they are or have been employed by a “relevant organisation” (which includes the police and various security forces).
Residential addresses already on the public record at Companies House can be removed on application by the director or the company on behalf of the directors, but only if it can be shown that they (or a person living with them) are at risk of violence or intimidation, or they are or were employed by a relevant organisation. In any event, residential addresses already on the public record before 1 January 2003 cannot be removed.
There are also circumstances when the company may be required to disclose a residential address – where there is evidence that the director’s service address is ‘ineffective’, and when it is “necessary or expedient” in connection with the enforcement of a court order (eg where the director cannot otherwise be traced and there is a legitimate reason why they should be found). If the address is requested, you should take advice.
18. Can we keep the details of a Person with Significant Control (PSC) in our company confidential?
One of the pieces of information the company must record about any individual in the PSC register, and periodically notify Companies House, is the individual’s usual residential address. If it is only the individual’s usual residential address you want to keep confidential, that address must be kept almost entirely confidential by the company and Companies House anyway. Companies House can only disclose or use it:
- To communicate with the individual.
- To inform a public authority such as the police.
- To inform a credit reference agency – which can only use it for certain purposes (unless the individual, the company or a subscriber to the memorandum of a new company, has successfully applied to prevent the registrar from disclosing information to such an agency).
- If the individual consents to the disclosure.
- If it is required to be disclosed by a court order.
In relation to credit reference agencies, an application can be made to prevent disclosure of the residential address of an individual in the PSC register to credit reference agencies, provided it can be shown that there is a serious risk the individual or a person living with them, will be subjected to violence or intimidation as a result of the activities of a company of which they were, are, or propose to become, a PSC, or they are or have been employed by an organisation such as the police or other security forces.
The company must also keep the residential address confidential. It may use or disclose the address only:
- For communicating with the individual concerned.
- To file information at Companies House under the Companies Act.
- If the individual consents to the disclosure.
However, if you want all the individual PSC’s details to be kept confidential – and not just their residential address – an application can be made on grounds that, if the information the applicant wants kept confidential were disclosed then:
- the activities of the company; or
- a characteristic or personal attribute of the individual when associated with the company would put the individual PSC, or a person living with them, at serious risk of violence or intimidation.
Take legal advice before making any application to protect any of the details of an individual PSC from public disclosure.
DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances, and is merely a general comment on the relevant topic. If specific advice is required in connection with any of the matters covered in this article, please seek the services of a legal professional.