In the modern corporate world, a company’s operations are subject to an increasingly complex web of rules and regulations. How can a company know what the law requires from them and how do they go about fulfilling these obligations?
This is where a Company Secretary steps in. A Company Secretary is an individual or corporate body that is primarily responsible for advising a company’s Board of Directors on its duties, responsibilities and powers, and communicating all developments in the law affecting the operations of the company. Other duties include ensuring that company books and records are properly kept, ensuring that annual financial statements of the company are circulated to all relevant persons, and all statutory forms and returns are duly filed with the Registrar. As one would imagine, these responsibilities are crucial to the successful operation of a company and require someone with specific knowledge about how to carry out such duties.
Under the old Company’s Act (Act 179), a person did not have to meet strict qualification requirements to be appointed as a Company Secretary. A company’s Board could simply appoint anyone whom they saw fit for the role. Consequently, many companies appointed individuals without the requisite knowledge to adequately perform their company secretarial duties and these companies faltered on their corporate compliance requirements as a result.
Times have changed however, and gone are the days when just about anyone could be a company’s secretary. With the introduction of the current Company’s Act (Act 992) in 2019, specific criteria have been prescribed to ensure that anyone appointed as a company secretary has the knowledge to perform the duties of the role. Under the new regime of Act 992, per section 211, a Company Secretary must satisfy at least one of the following:
- Professional qualification: Has obtained a professional qualification with an offering in company law practice and administration
- Tertiary level qualification: Has obtained a tertiary qualification with an offering in company law practice and administration
- Company Secretary Trainee: Has been a company secretary trainee or articled under the supervision of a qualified company secretary for at least three years
- Barrister and Solicitor in the Republic: Is a lawyer in good standing in the Republic of Ghana
- Institute of Chartered Accountants: Is a member in good standing of the Institute of Chartered Accountants, Ghana
- Institute of Chartered Secretaries and Administrators: Is a member in good standing of the Institute of Chartered Secretaries and Administrators, Ghana
- Appointment at the reasonable discretion of the Board: By virtue of an academic qualification or member of a professional body, appears to the directors as capable of the directors as a capable of performing the functions of secretary of the company
These changes to the Company Secretary criteria are indicative of new reforms implemented by the Registrar-General’s Department in 2019 and 2020 to improve transparency in the operations of businesses, strengthen corporate governance, and encourage legal compliance in Ghana. While companies are legally required to conform to the new Company Secretary reforms, doing so is also in their best self-interest because a qualified Company Secretary can help a company save money by helping them avoid penalties that would otherwise arise if the company fails to fulfil their corporate duties.
Emmanuel is the Managing Partner of M&O Law Consult and the head of the Real Estate, Construction and Infrastructure team. Baaba is a member of the Corporate and Commercial team.
Email: [email protected].