What is a company secretary and what is their role in liquidation?

Understanding the role of a company secretary during insolvency

When a company goes into a formal insolvency process like liquidation, the secretary of the company must fully cooperate with the liquidator and provide any documents needed.

The company secretary might also be asked to help prepare the Statement of Affairs. Just like directors, company secretaries could be personally responsible for financial losses suffered by the company or its creditors if evidence of wrongful trading or misfeasance comes to light.

 

What are the responsibilities of a company secretary if the company faces insolvency?

A company secretary is an official of the company, tasked with specific responsibilities and duties. In contrast to a public company, a private limited company is no longer required to appoint a company secretary unless it’s explicitly stated in the articles of association.

Numerous private companies do choose to appoint a company secretary. This ensures the thorough fulfilment of the company’s administrative and legal obligations, and they serve as advisors on corporate governance.

Company secretaries handle some of the day-to-day responsibilities of directors, yet directors remain legally accountable for the company as a whole. Disqualified directors, undischarged bankrupts, and the company’s auditor cannot serve as company secretaries.

 

What are the duties of a company secretary?

The company secretary is tasked with ensuring compliance with the Companies Act, 2006, and performs various administrative duties, such as:

• Ensuring the company’s register and other records are current
• Organising board meetings and ensuring minutes are recorded
• Informing HMRC and Companies House about any alterations
• Supervising the payroll process
• Submitting statutory documents and financial statements to Companies House. These include confirmation statements, tax returns, and company accounts.
• Establishing the company’s registered office
• Safeguarding vital documents like the memorandum articles of association, and the certificate of incorporation
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A company secretary holds responsibilities under the Companies Act, 2006, and might face penalties in specific cases, like failing to submit the company’s accounts or confirmation statement.

 

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• How can I save my company from Liquidation

 

Exploring the major role of a company secretary in liquidation

• As an officer of the company, they are also obligated to furnish any information requested by the liquidator and must fully cooperate throughout the liquidation procedure. The office-holder is likely to need financial and administrative documents such as leases, contracts, insurance policies, and employee-related information, and the company secretary could play a key role in supplying these documents.
• When a business goes into liquidation, the company secretary is likely to help prepare the Statement of Affairs. This document essentially informs creditors about why the company has become insolvent. It contains information about all assets, liabilities, and debts, including details of any fixed or floating charges held by creditors. Additionally, it includes a list of all trade creditors, suppliers, and employees.
• A company secretary can be held accountable for any violations of the Companies Act, and similar to directors, they could be personally responsible for financial losses suffered by the company or its creditors due to negligence.
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If you require additional information regarding the role of a company secretary or have concerns about your company’s financial situation, please contact one of our licensed insolvency practitioners.

Vanguard Insolvency will ensure that you comprehend your duties and responsibilities in insolvency as a director or company secretary, and can help minimise your exposure to personal liability or action taken by the liquidator. 

For a free same-day consultation, contact one of our expert team members. Vanguard Insolvency offers director advice online, over the phone, or in person at one of our nationwide UK offices or at a location convenient for you.