In terms of section 86 of the Companies Act, a company is required to appoint a company secretary if it is a state-owned company, if it is a public company or if its memorandum of incorporation requires it to do so. Furthermore, if a vacancy in the office of company secretary arises in a company that is required to appoint one, the board must fill that vacancy within 60 business days after it arises.
The company secretary is a useful cog in the corporate-governance machine. A company secretary can be a natural person, a juristic person or a partnership, as long as any person who provides the services of a company secretary complies with the requirements in section 84(5) of the Companies Act, 2008 (Companies Act) – i.e. such persons may not be disqualified from serving as a director.
A company secretary is appointed by lodging a Form CoR44 with the Companies and Intellectual Property Commission along with a certified copy of the identity document of the person signing the form on behalf of the company.
In terms of section 88 of the Companies Act, the functions of a company secretary include inter alia:
- ensuring that minutes of all shareholders’ meetings, board meetings and the meetings of any committees of the directors, or of the company’s audit committee, are properly recorded in accordance with the Companies Act;
- certifying in the company’s annual financial statements whether the company has filed required returns and notices in terms of the Companies Act, and whether all such returns and notices appear to be true, correct and up to date;
- ensuring that a copy of the company’s annual financial statements is sent, in accordance with the Companies Act, to every person who is entitled to receive it; and
- carrying out the functions of a person designated in terms of section 33(3) of the Companies Act, which requires every company to file an annual return including:
- a copy of its annual financial statements, if it is required to have such statements audited;
- a copy of the company’s securities register; and
- a copy of the register of the disclosure of beneficial interest as required in terms of section 56(7)(aA).
Section 89 of the Companies Act states that, if a company secretary resigns from office, at least one month’s prior written notice must be given to the company unless a shorter notice period is approved by the board. If the company secretary is removed from office by the board, the company secretary may require the company to include a statement in the directors’ report in the company’s annual financial statements setting out the company secretary’s contention as to the circumstances that resulted in the removal. If the company secretary exercises this power, the statement must not exceed a reasonable length. Notice of the company secretary’s intention to exercise this power must be sent to the company before the end of the financial year in which the removal took place and must include the statement which the company secretary wishes to be included in the annual financial statements.
This Art of Law article was penned by Wildu du Plessis and Tristan Hussey.