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Company Compliance and Administration > Chapter 1: The Role of the CoSec > Flashcards

Chapter 1: The Role of the CoSec Flashcards

1
Q

Checklist for appointing a CoSec

A
  1. Qualifications (PLC)
  2. Resolution of Directors
  3. Consent to act
  4. Add particulars to register of secretaries/central register
  5. Bank mandate considerations
  6. Announcement to staff/clients
  7. Service contract
  8. Inform insurance for liability insurance
  9. Give company rules on MAR, DTR, and LR (if shares traded)
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2
Q

Removal/resignation of CoSec

A

Removal: (s.276-277)

  • By resolution by majority vote of Directors, subject to terms of service contract.
  • File form TM02 within 14 days with CH
  • Update register of CoSecs
  • Update bank mandate

Resignation: (S.276-277)
-File TM02 within 14 days with CH
-Update register of CoSes
Update bank mandate

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3
Q

CoSec Appointment Process

A

On incorporation:
- Specify the CoSec and their particulars on for INO1

Any other time:

  • According to the articles and S. 275-278
  • Directors’ resolution, then file form AP03(natural person) and AP04 (Corporate)
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4
Q

Cosec Duties - 1

A

BOARD:

  • Ensure proper procedures are followed
  • Ensure timely circulation of papers
  • Offer support to NEDs
  • Monitor/guide corporate governance policies
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5
Q

Cosec Duties - 2

A

THE COMPANY:

  • Ensure compliance with legislation and codes
  • Provide a central source of info to execs
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6
Q

Cosec Duties - 3

A

SHAREHOLDERS:

  • Primary point of contact
  • Particularly for matters of corporate and environmental governance
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7
Q

Cosec Duties -4

A

BEFORE BOARD MEETING:

  • Prepare standing agenda items and agree agenda
  • Compile matters for discussion from directors/execs
  • Ensure execs in meeting for relevant parts of the meeting
  • Have spare copies
  • Be aware of quorum and any conflicts of interests
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8
Q

Cosec Duties - 5

A

DURING A BOARD MEETING:

  • Note who is present
  • Note if anyone leaves the meeting
  • Take minutes
  • Note views of any dissenting directors
  • Make a note for votes for, against and abstention
  • Advice on points of procedure (check standing orders)
  • Ensure rules within the articles are adhered to
  • Collect confidential papers
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9
Q

Cosec Duties - 6

A

AFTER BOARD MEETING:

  • Notify IRS of any notifiable events (e.g. dividends) - for public companies
  • Ensure deferred items are carried over
  • Notify managers if directors want something for the next meeting
  • Write up the minutes
  • Track any actions
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10
Q

The CGC recommends that the Cosec reports to two people. Who are they?

A
  1. CEO

2. Chair

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11
Q

Who is authorised to convene meetings of the directors?

A

Any director can convene, or can request the cosec to do so.

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12
Q

How might minutes of directors’ meetings differ between a regulated and unregulated entity?

A

More detailed if it is regulated entity as minutes are more likely to be under scrutiny. Minutes protects directors, so should be detailed/correct.

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13
Q

Communications with Stakeholders - 1:

Where should hard copy documents/info be sent to a company?

A
  • Registered office
  • Address for specific purpose
  • Alternative addresses per C.A. 2006
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14
Q

Communications with Stakeholders - 2:

In what other way can companies be sent documents/info?

A

Electronic means - if company has given deemed consent to receive electronic documents.

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15
Q

Communications with Stakeholders - 3:

How are documents/info delivered from a company?

A
  • Registered office
  • Address for specific purpose
  • Alternate address as per C.A 2006
  • to a member/director at their address as per the register of members/directors

By electronic means: If recipient has given deemed consent to receive electronic documents.

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16
Q

What is IRS and what are it’s functions?

A

Regulatory Information Service

  • Approve by the FCA to disseminate info to the public
  • For announcing changes in the company (i.e. half yearly results, change of directors)
  • Information is released in a regulated and timely manner as per listing rules or stock exchange rules.
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17
Q

What is the default method of communication to the shareholders?

A

Hard copy - unless otherwise specified (s.1145)

18
Q

What are deemed delivery periods of electronic and post communications?

A

Hard copy - 48 hours after posting provided envelope was properly addressed.

Electronic - 48 hours after sending, providing proof is obtained

Website - as soon as published

19
Q

How must communications be authenticated by the company?

A

Hard copy - signed on behalf of the sender

Electronic - Identifies the sender

Further provisions can be found within the articles or S.1146

20
Q

What communication is considered ‘post’ under CA2006?

A

Post has to be within an envelope

21
Q

De facto Director

A

Person not formerly appointed still liable as per s.250. Hold them selves out as a Director

22
Q

Alternate Director

A

Acting on behalf of an existing director, in the directors absence.
Articles have to specifically state this. The model articles for Plc allow this. No remuneration received. Outsiders require board approval.
The have to be registered at Companies House under AP01 if they are not already a Director/member of the Board.

23
Q

Shadow Director

A

Person not formerly appointed still liable as per s.250. The board relies on their advice. The Board regularly take action on the advice of this person. Involvement is concealed.

24
Q

Corporate Director

A

Where a company is appointed as a director (must be 1 natural person also appointed as a director).
Being phased out by s.156a

25
Q

Executive Director

A

Employed by the company
Service contract
Day to day management

26
Q

Non-Executive Director

A

Not employed by the company
Strategic overview of the company
Independence

27
Q

Process for Appointment of a Director (CA2006 / Model Articles)

A
  • On incorporation: On consent to act, particulars of
    the first directors entered into IN01
  • Subsequently: On consent to act, and as per the
    articles: resolution of Directors, then File AP01 within
    14 days of the date of appointment Or can be
    appointed by Member resolution plus AP01
28
Q

Checklist – Appointing a Director

A
  1. Consent to Act
  2. Director resolution
  3. Request particulars
  4. AP01 / AP02
  5. Update registers
  6. Bank mandate
  7. Give details of minimum shareholding
    qualifications required under articles
  8. Request declaration of interests
  9. Dates of meetings
  10. How remuneration will be paid / NI info
  11. General info on the company
  12. (Traded) - rules for securities transactions
  13. (Traded) – inform RIS as per LR
  14. If no share qualification required, details of AGMs
  15. Insurance notified
  16. Induction
29
Q

Who cannot be a director?

A 
•	Auditor of the company
•	Under 16s
•	A disqualified person under CDDA1986
•	A Bankrupt person
•	Director of insolvent company
•	Not meeting specific criteria under the articles of 
        the Company
30
Q

What particulars must be entered into the Register of Directors?

A

• Name
• Service address (Residential address goes into
the Register of Usual Residential Addresses, and
onto the AP01)
• Date of birth
• Nationality
• Business occupation

31
Q

Retirement, Removal and Disqualification:

When does a director vacate office?

A

When the Director:
• Dies
• Becomes bankrupt
• Disqualified
• Under further provision of the articles (i.e.
resignation by Director, reach certain age, absent
from too many meetings, under minimum
shareholding qualification, mental disorder)

32
Q

Retirement, Removal and Disqualification:

What is retirement by rotation?

A

If there is provision in the articles, i.e.
Model Articles for a plc (reg.21) provides that 1/3rd must retire every year
CGC recommends Directors of listed companies offer themselves for re-election every year

33
Q

Retirement, Removal and Disqualification:

When can a director be Removed?

A

Members can by ordinary resolution (but by special notice) remove a Director.
Has to be a meeting of the members rather than written resolution.
Cannot be overruled by the Articles.
Director should be given opportunity to make representations in writing to the company which should be circulated to the members in advance of the meeting
Legal advice should be sought by the Company before actioning.

34
Q

When can a director be disqualified?

A

Disqualified automatically as a result of a specific event (by CDDA1986) or by the court because they are unfit.

Disqualification can happen under CDDA1986 due to:

  • Unfit
  • Convicted
  • Breach of statutory duties
  • Fraudulent or wrongful trading
  • On public interests
35
Q

How is disqualification actioned?

A

Disqualification is actioned by:
- Disqualification order (court)
- Disqualification undertaking (Secretary of State
agrees with Director that the Director cannot be a
Director – avoids court)
- Competition undertaking (If breached competition
law, CMA agrees with Director that the Director
cannot be a Director – avoids court)

36
Q

Why is succession planning important?

A

To ensure orderly succession, and to maintain balance of skills, experience, diversity, independence.

37
Q

What is the definition of a Director under s.250?

A

Any person occupying position of Director under any name.

38
Q

THE ROLE OF A NED

How is the NED Independence ascertained?

A
  1. Employee in last 5yrs
  2. Relationship with company in 3 yrs
  3. Received remuneration apart from directors’ fee
  4. Family ties
  5. Cross-directorships
  6. Represents a significant shareholder
  7. Appointed for longer than 9yrs
39
Q

What provisions allow Directors to delegate authority?

A

Model Articles – Article 5

40
Q

What are the 7 Director Duties?

A

Anagram: PPICCTD

S. 171 - Promote success of the company for the
benefit
of its members as a whole
S. 172 - Independent judgement
S. 173 - Independent Judgement
S. 174 - Care, skill and diligence
S. 175 - Conflict of interest
S. 176 - Third party (don’t accept benefits)
S. 177 - Disclose interest in proposed transactions

41
Q

What other Statutory Duties do directors have? (pg 37)

A
  • Not to act when disqualified
  • Director of insolvent company with prohibited
    name
  • Unlawful dividend
  • Taking part in Modern Slavery
  • Evade VAT
  • Fraud
  • Trading without a trading certificate
  • Wrongful trading
  • Health and safety offences
42
Q

What is D&O insurance?

A

Directors and Officers Indemnification and Liability Insurance
Directors/officers can be indemnified by the Company, to protect them from all of the above things that they can be liable for
Defends against costs and damages brought on by proceedings from third parties

Company Compliance and Administration (5 decks)

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