A Company Secretary (CS) is an important officer of a company under the law. The term CS is defined to include a person who occupies the position of a secretary by whatever name called[3]. The term is also used to describe the chief administrative officer of a body corporate. A body corporate is a corporation formed under the Companies Act, 2019 (Act 992) or otherwise, and whether in Ghana or elsewhere but does not include a corporation sole such as an incorporated office.[4] The CS is one of the officers of a company as defined under the law. Act 992 has introduced some significant changes in the qualifications, status, and duties of the CS in Ghana. Therefore, this article is written to highlight the key changes introduced by Act 992 on office of the CS and to answer the question – what duties must your Company Secretary perform in the Company?
We have discussed in the preceding paragraphs, the key issues under the following sub-headings; the nature of the office of the CS; the qualifications of the CS; the status of the CS in a company; the duties performed by the CS under the law; and how the CS can be removed from office.
What kind of Office is the Office of the Company Secretary?
The office of the CS is created by law. Act 992 is the law that creates the office of CS to perform specific roles in the business of a company. In effect, the office of the CS is not merely created by the agreement of or service contract between master and servant. It is a statutory office that could be filled by persons appointed in accordance with Act 922 to occupy it. The office may be occupied by an individual or a corporate body[5].
Under Act 992, the CS is to be appointed and necessary forms filled before the company is incorporated[6]. The promoters[7] of the company will appoint a person who qualifies to be a CS as a CS. The appointment will take effect upon the incorporation of the company. The person so appointed must consent to the appointment by filling Form 26(B) and Form 26(C)[8] and lodge it with the company for onward transmission to the Registrar of Companies. The person cannot assume his/her roles as a CS unless he/she has lodged the consent Form 26(B) with the Company which must, in turn, lodge it with the Registrar of Companies. The person must state the following information in the form: the person’s or company’s full name, residential address, postal address, telephone number, and the specific qualification(s) of the person that qualifies him/her to be a CS.
Where the CS is a body corporate, it is required that that body corporate has an individual (one of its subscribers, directors, promoters, or operating officers) who is qualified to be appointed a CS. Also, it is required that the CS has a Tax Identification Number (TIN) at the time of his/her appointment.
Every company is required to have a CS (section 211(2)). Where a company carries on business for more than six months without a CS, the company and every officer of the company that is in default is liable to pay to the Registrar of Companies an administrative penalty of twenty-five (25) penalty units for each day that the Company continues to carry on business without a CS after the expiration of the period of six (6) months. However, in the absence of a CS and within the six (6) months’ period, the Company may assign his/her duties to a deputy secretary, or an acting CS appointed by the directors.
The law also requires that within twenty-eight (28) days of a change occurring in the Company Secretary or in any of the particulars contained in the register, the Company must send to the Registrar for registration notification of the change, specifying the change and the date of the change. This means that if a CS resigns, the Company must take steps to notify the Registrar of Companies.
Who Qualifies to be a Company’s Secretary?
Act 992 introduces qualifications for a CS (section 211 (1)(3))- and where the CS is a body corporate, one of its Promoters, Subscribers, Directors or Operating Officers must be a person who is so qualified (section 211(2). The Act 992 provides that the Directors shall not appoint a person as a CS unless that person meets at least one (1) of the following qualifications under the law. To be appointed a CS, the individual must;
- Have a professional or tertiary level qualification and by that, possesses the requisite knowledge and experience to perform the functions of a CS; or
- Prior to his/her appointment, has held the office of a CS as a CS trainee under the supervision of a qualified CS for at least three (3) years; or
- Be a member in good standing of the Institute of Chartered Secretaries and Administrators or Institute of Chartered Accountants, Ghana; or
- Be enrolled to practice in Ghana as a barrister or solicitor in good standing; or
- Be a person, who by virtue of his/her academic qualification or membership of a professional body appears to the directors as capable of performing the functions of Secretary of the Company[9].
It is only persons who meet the above qualifications who can be appointed as a Company’s Secretary in Ghana. This applies to both local and foreign companies registered in Ghana.
What is the Status of the Company Secretary in the Company?
The CS is an officer of the Company. An officer of a body corporate including a Company is defined to include “… any director, secretary or employee of that body corporate …”. There are some rights, obligations, and liabilities of the CS as an officer of the Company. For example, the CS has the right to enforce the provisions of the Company’s constitution. A Company’s constitution has the effect of a contract under seal upon registration[10]. The constitution being a contract under seal can be enforced by specified persons.
This contract under seal is between the company and each member or officer and the members or officers themselves by which they agree to observe and perform the functions contained in the constitution so far as they relate to the company, the members or the officers. Therefore, a CS can enforce the provisions of the Constitution as he/she is an officer of the company.
The right to enforce includes the right to bring an action to enforce the performance of the functions or obligations of the company, a member or another officer of the company. Where the obligations the officer seeks to enforce is owed under the constitution to that officer and other officers, then the officer must sue in a representative capacity[11].
The CS is not prevented from occupying the office of a director while serving as CS in the same company. A Company can therefore appoint the same person to be its CS and director. However, where a person acts as both director and CS of a Company, there are limits to how he/she performs the two functions. For example, a provision requiring or authorizing an act to be done by or to a director and a CS will not be considered as done if the act is done by or to the CS acting in both capacities (i.e., CS and director). In effect, at all times, the CS who doubles as a director of the same company cannot act in the two capacities at the same time in doing what is to be done by or to a CS and a director.
What Duties Must A Company’s Secretary Perform?
There are statutory duties that the office of the CS must perform aside any other administrative functions and roles assigned to the CS by the Company. These duties are referred to as statutory duties because they are duties imposed by a statute (i.e., Act 992) other than by an agreement between the Company and the CS. The statutory duties that your CS must perform are briefly explained below:
(a) The CS assists the Board of Directors to comply with the constitution of the company and with any relevant legislations. This duty makes the CS a compliance officer of the Company as far as administration and corporate practices are concerned. Every Company operates under a set of legislations and has a constitution that governs its operations. It is the duty of the CS to help the Board of Directors comply with the requirements of the constitution and relevant legislations. He/she will usually do this by reminding the Board of Directors of what the constitution says about a subject matter of consideration. He/she may be invited by the Board of Directors to be present (in attendance) at its meetings. At such meetings, the CS can inform the Board of Directors what the constitution says about the subject matter being considered.
(b) The CS keeps the books and records of the Company. The law requires companies to maintain several books. The books and records that a Company may ordinarily keep include: employees’ attendance book, directors and shareholders’ minutes book, registers, books of accounts, records of visitors or customers, etc. It is the CS’s duty to keep and maintain these books and records of the Company.
(c) The CS ensures that the minutes of meetings of shareholders and the Board of Directors are properly recorded in the form required by Act 992. Minutes are crucial to running the affairs of a Company. The CS therefore must ensure that minutes are taken at meetings of directors and shareholders. This may extend to management and departmental level meetings of the Company.
(d) The CS prepares and issues out notices in the name of the Company. Most times, companies send or are required to send notices to members or shareholders and directors to either attend a meeting or to be updated on a matter. These notices, either to shareholders, directors, staff, or the general public, are usually prepared and issued by the CS in the name of the Company. The CS must comply with all internal policies and do all the necessary consultations before issuing such notices to the recipients.
(e) The CS ensures that the annual financial statements of the Company are dispatched to every person entitled to the statements as required by Act 992. It is the CS’s duty to ensure delivery of financial statements to shareholders, directors or such other persons who are entitled to receive such statements. Usually, the financial statements are delivered to shareholders prior to a shareholders’ meeting and it the CS who ensures that this is done.
(f) The CS ensures that all statutory forms and returns are duly filed with the Registrar of Companies. The Company must file its annual returns, changes in its shareholding or officers, or its profile, among others. These filings are done by filling the required statutory form(s) and filing them at the Registry of the Registrar of Companies. It is the duty of the CS to ensure that these returns and forms are filed as and when the time is due or they become necessary.
(g) The CS maintains the statutory registers of the Company. A Company ordinarily will have a register of members, register of debentures, of particulars of charges, of directors and company secretary, etc. These are called statutory registers because they are required to be maintained by statute other than by administrative decision or policy. The Company must therefore maintain these registers whenever necessary, and it is the duty of the CS to maintain these registers on behalf of the Company;
(h) The CS provides the Board of Directors with guidance as to the duties, responsibilities, and powers of the Board of Directors and on the changes and developments in the laws affecting the operation of companies. This duty requires the CS to guide the board of directors on what their duties, powers, and responsibilities are and inform them of any changes to relevant laws under which the Company operates;
(i) The CS informs the Board of Directors of legislations relevant to or affecting meetings of shareholders and directors and their failure to comply with the legislation and reporting accordingly at any meeting; and
(j) The CS advises the Board of Directors on their responsibilities as directors. Act 922 specifies what the duties of the directors are. The duties are fiduciary in nature and requires utmost good faith on the part of every director. These duties come with responsibilities in law and for the business of the Company. It is the duty of the CS to advise the Board of Directors on their responsibilities as directors of a Company operating in a particular industry.
The law does not prohibit the CS from discharging these duties with other administrative officers of the Company. In effect, the duties of the CS need not be performed directly by the CS himself/herself. The Company may engage other administrative assistants who will assist the CS in discharging these duties. Administrative assistants must always act on the advice of the CS who must supervise the performance of these duties by the staff assigned by the Company to assist him/her. At all times, the ultimate responsibility for the statutory performance of the responsibilities of the office of the CS rests with the CS and not the administrative assistants assigned to assist him/her.
How Can You Remove the Company Secretary from Office?
A CS is appointed by promoters before registration of the Company. However, whenever there is a vacancy in the office, the Board of Directors have the power to appoint another person as the CS unless the Company’s constitution provides otherwise.
How is the CS removed from office? The CS can be removed from office by the Board of Directors. There is no specified procedure for the removal of the CS. However, since the Board of Directors ordinarily act by board resolutions, for the removal to be valid, it must be done by a properly passed resolution of the Board of Directors. The CS’s removal is subject to his/her right to claim damages/compensation from the Company if the removal is in breach of a contract he/she has with the Company.
Once a CS is removed from office, a new CS must be appointed not later than six (6) months after the removal. Act 992 requires that the Registrar of Companies is notified of the change in the office of the CS. This notification is done by filing Form 17A (Notification of Change/Appointment of Company Secretary) with the requisite consent form (Form 26(B)) and statutory declaration (Form 26(C)) of the new CS.
Conclusion
The office of the CS remains a crucial office for the administration and compliance needs of every Company. It is often the case that, the more effective the CS of a Company, the better administered and compliant the Company becomes. Companies desiring to properly structure their administration and secretarial departments and increase their compliant rates, must consider appointing a CS who has the required qualification to deliver the best secretarial practices.
[1] Godwin Selasi Dakpo, Esq. is a private legal practitioner and managing counsel at The Law Office of Elisa Kumadey where he specialises in Corporate & Commercial Litigation and Corporate & Immigration Practices aside other areas of practice.
[2] Miss Charity Afi (Elinam) Kordorwu, holds HND in Bilingual Secretaryship and Bachelor’s Degree in Business Administration from the Accra Technical University and Ghana Institute of Management and Public Administration (GIMPA) respectively. She is a Business Administration & Secretarial Services Consultant.
[3] First Schedule of Act 992
[4] First Schedule of Act 992
[5] Section 211(2) of Act 992
[6] After incorporation and whenever there is a vacancy in the office, the Board of Directors (unless provided otherwise in the company’s constitution) are empowered by the law to appoint a person qualified to fill the vacancy.
[7] Promoters are persons who are interested in forming a company.
[8] The Company Secretary shall, before assuming office, lodge with the company for onward transmission to the Registrar, the written consent to serve as a Company Secretary. (Section 211(8) of Act 992)
[9] Section 211 of the Act 992
[10] Section 29 of the Act 992
[11] Section 29(3) and section 205 of Act 992
