Officers of a Company

Question 1

Who are Company’s officers?

Answer 1

1. Directors
2. Company secretary
3. auditor

Question 2

Company secretary

Answer 2

1. Private co. is not required to have, public company must have a company secretary.
2. Co. Secretary may be individual or a company
3. Co. Secretary deal with company’s legal administrative requirements, common duties are:
   a) write up company’s board minutes and minutes of GM
   b) filing with CH
   c) keep the company register up to date
4. In private companies without a Co. Sec, its tasks can be done by directors or sb authorised by them.
5. Co. Secretary will have apparent authority to enter in contract of administrative nature (but not trading contracts e.g. borrowing)

Question 3

Appointment and Removal of Company Secretary

Answer 3

1. First Co. Sec will be named in the IN01 form
2. Any Co. Sec appointed after incorporation will be appointed by board resolution
3. Power to appoint will be expressly stated in AoA, Model Articles do not have for private companies.
4. Co. Sec can resign from position or directors can remove the Co.Sec from their position. Sometimes, there will be written contract between Company and Secretary, it may give rise to compensation for breach of contract or employment law claims.

Question 4

Notification requirements in relation to Co. Secretary

Answer 4

1. Notify the Registrar of Companies on form AP3 or AP4 (corporate secretary) within 14 days of appointment of Secretary
2. Notify the Registrar of Companies on form TM02 with 14 days of their resignation or removal
3. Notify on form CH03/CH04 of any change in particular of Secretary
4. Each company need to keep registeres of secretaries, private companies may elect to keep up to date info on central register at CHouse instead of keeping register.

Question 5

Auditor

Answer 5

1. an accountant who prepares a report on the company annual accounts, to be sent to shareholders
2. Private companies has obligations to appoint auditors to review their accounts except (a) small companies exempt from this requirement, (b) dormant companies (do not trade) are entitled to file abbreviated accounts and exempt from audit
3. The auditor must be qualified (certified or chartered accountant) and independent (not connected with anyone involved in the company.
4. Usually companies appoint a firm as accountant.

Question 6

Appointment and removal of auditor

Answer 6

1. Appointment: director of private company appoint 1st auditor, after that shareholders have the right to appoint auditor by ordinary resolution.
2. Auditor of private companies is usually deemed to be reappointed automatically each year, with certain exceptions: including being appointed by directors (no automatic), or AoA requires reappointment; or directors or shareholders so decide.
3. Shareholders can remove auditor from office at any time by ordinary resolution (s 510CA2006), and must give special notice to the company.
4. Auditor can resign at any time by notice in writing sent to company
5. Auditor must deliver to the company statement explaining the circumstances connected with ceasing to hold office.

Question 7

Auditor liability

Answer 7

1. Can be sued for negligence by company :
2. Two criminal negligence by the auditor (s 507 CA2006):
   (a) knowingly or recklessly including misleading, false or deceptive material in the auditors report
   (b) omitting certain statements from the report which are required to be included by CA2006
3. Case law: Auditors do not owe duty of care either to shareholder or potential new shareholders when conducting audit.