While they may not be a legal requirement for most businesses, company secretarial services are often the key to running a more efficient and tax-compliant business.
We’ll be covering a few reasons why hiring an external company secretary is the way to go; but first, let’s start with a brief overview of the role itself…
What is a company secretary?
It’s the job of a company secretary (also known as a compliance officer) to maintain the financial, legal and statutory compliance of the company they work for.
Don’t let the name confuse you; the role of a company secretary is very different to a typical personal assistant secretary role.
The exact duties of the company secretary will often differ from one company to the next; but they generally include:
- Keeping a register of directors, register of members and other statutory records
- Returning relevant records to HMRC; including annual returns and director’s reports
- Maintaining accurate company records at Companies House and notifying them of any important corporate changes or changes of address
- Staying up to date with the latest legal and corporate responsibility regulations, and advising the company directors to ensure compliance across the organisation
- Managing the security of legal documents and records
- Issuing company announcements and communicating with shareholders
- Organising director meetings and keeping the meeting minutes
Does my company need a company secretary?
Public companies must have a company secretary; but when it comes to private limited companies, there’s no legal requirement to hire a company secretary.
The only exception is if your company’s articles of association specifically require you to have a company secretary in place.
Still, many company directors still choose to rely on a company secretary; and there’s several good reasons why.
It leaves you free to focus on what you do best
If you’re running a business without a dedicated company secretary or compliance officer, the responsibility for fulfilling those duties falls on you as director.
That’s a lot of paperwork to manage and a lot of legislative changes to keep track of, on top of your day-to-day director duties.
What if all that time and attention could be refocused on actually running and growing your business?
A company secretary can help you do just that; freeing you from all the compliance admin so you can concentrate on simply making money.
It helps you avoid non-compliance penalties
Hiring a company secretary also means avoiding penalties for forgetting or neglecting your compliance duties.
Any one of the following offences could potentially land you with a significant fine running into thousands of pounds:
- Failure to keep your statutory records up-to-date
- Failure to notify HMRC of any changes which might affect your company’s tax liability
- Late filing of company accounts, director’s reports etc.
- Other financial or legal non-compliance issues which might be specific to your company’s industry
That’s not to mention the worst-case scenario penalties for serious compliance breaches, such as prison time or the dissolution of your company.
By having a qualified officer in place to avoid these breaches in the first place, you’ll have one less thing to worry about – and so will your company’s finances.
It clears confusion – so your business can run better
From time to time, every company faces internal disputes.
Questions over where the company is headed, who’s responsible for steering the ship, or whether the organisation is operating on the right side of the law, can all distract from the company’s mission and quickly grind productivity to a halt.
A company secretary with the right legal expertise can help clear up these kinds of disputes; keeping your business moving smoothly forwards.
Should you hire an outsourced company secretary?
Does your company secretary necessarily need to be a fully-fledged employee of your company?
Many directors choose to outsource secretarial duties to an outside firm; and just like hiring an external accountant, there are many good reasons to do so.
Greater depth of knowledge
Two heads are better than one, as the saying goes.
Corporate compliance and governance are very broad topics. A single company secretary simply won’t have all the knowledge to cover every aspect of them.
The average in-house company secretary should be able to provide the right advice on most legal, financial and statutory issues; but they may not have the specialist knowledge to untangle more complex or unusual scenarios.
When you use an external company secretary service, you’re essentially paying for the expertise of a whole team of legal, financial and statutory experts. They can collaborate and share their knowledge to help you tackle the bigger compliance problems that your company might encounter.
Fewer costs and overheads
When you hire an in-house company secretary, you’re not just paying for a full-time salary.
There are a lot of hidden costs to consider; including:
- Work equipment, office supplies and furniture
- Statutory sick pay and holiday entitlement
- Pension and national insurance contributions
- Training expenses
- Software licensing fees
- Employee benefits
And that’s not forgetting the costs of recruiting them in the first place; including placing job advertisements and conducting interviews.
You don’t need to worry about any of these costs when you work with an external secretarial services firm; and even simply comparing a typical salary and service fees alone, the external secretary is often the more cost-effective option.
Trusting a single individual with the role of company secretary is more of a gamble than you might think.
The vast majority of professionals in the industry are honest and trustworthy; but think back to the list of duties and the non-compliance penalties we covered earlier.
In the hands of a bad actor, your organisation’s legal and financial information could present huge problems for your company’s future.
And even a well-meaning company secretary could cause serious financial woes for you and your team if their level of competence in the role is lacking.
By contrast, external secretarial services rely on their own positive reputation to maintain their client base and keep their business afloat; which means they have strong controls in place to prevent fraud and leaks.
Interested in hiring a company secretary for your organisation? GNS Associates offers affordable, expert company secretarial services in Harrow and across the UK; as well as chartered accounting and tax advice as part of an all-in-one package of financial services.
Call 0208 090 2604 or email firstname.lastname@example.org to arrange your consultation today.