Chapter 8 Other company officers

1. The company secretary Every public company must have a company secretary, who is one of the officers of a company and may be a director. Private companies are not required to have a secretary. Every public company must have a company secretary, who is one of the officers of a company and may be a director. Private companies are not required to have a secretary. In this case the roles normally done by the company secretary may be done by one of the directors, or an approved person. The secretary of state may require a public company to appoint a secretary where it has failed to do so.

1.2 Duties of a company secretary The specific duties of each company secretary are determined by the directors of the company. As a company officer, the company secretary is responsible for ensuring that the company complies with its statutory obligations.

1.3 Powers and authority of a company secretary The powers of the company secretary have historically been very limited. However, the common law increasingly recognises that they may be able to act as agents to exercise apparent or ostensible authority, therefore, they may enter the company into contracts connected with the administrative side of the company.

Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd 1971 The facts: B, the secretary of a company, ordered cars from a car hire firm, representing that they were required to meet the company's customers at London Airport. Instead he used the cars for his own purposes. The bill was not paid, so the car hire firm claimed payment from B's company. Decision: B's company was liable, for he had apparent authority to make contracts such as the present one, which were concerned with the administrative side of its business. The decision recognises the general nature of a company secretary's duties.

2.1 Appointment The first auditors may be appointed by the directors, to hold office until the first general meeting at which their appointment is considered. Subsequent auditors may not take office until the previous auditor has ceased to hold office. They will hold office until the end of the next financial period (private companies) or the next accounts meeting (public companies) unless reappointed.

2.2 Reappointing an auditor of a private company The rules on appointment make reference to a meeting where the accounts are laid. This is not always relevant for private companies as under the Act they are not required to hold an AGM or lay the accounts before the members.

2.3 Auditor remuneration Whoever appoints the auditors has power to fix their remuneration for the period of their appointment. It is usual when the auditors are appointed by the general meeting to leave it to the directors to fix their remuneration (by agreement at a later stage). The auditors' remuneration must be disclosed in a note to the accounts.

To fulfil their statutory duties, the auditors must carry out such investigations as are necessary to form an opinion as to whether: (a) Proper accounting records have been kept and proper returns adequate for the audit have been received from branches. (b) The accounts are in agreement with the accounting records. (c) The information in the directors' remuneration report is consistent with the accounts.

2.7 Auditors' liability Under the Companies Act any agreement between an auditor and a company that seeks to indemnify the auditor for their own negligence, default, or breach of duty or trust is void. However, an agreement can be made which limits the auditor's liability to the company. Such liability limitation agreements can only stand for one financial year and must therefore be replaced annually.Liability can only be limited to what is fair and reasonable having regard to the auditor's responsibilities, their contractual obligations and the professional standards expected of them. Such agreements must be approved by the members and publicly disclosed in the accounts or directors‘ report.

2.8 Termination of auditors' appointment Auditors may leave office in the following ways: resignation; removal from office by an ordinary resolution with special notice passed before the end of their term; failing to offer themselves for reelection; and not being re-elected at the general meeting at which their term expires.