- What administration is required?
- Who is responsible for company administration?
- Do we have to have a company secretary?
- If we do have one, who can we appoint as company secretary?
- If we appoint a company secretary, are they also a director?
- Who can sign administrative documents on the company's behalf?
- Who does a company secretary report to?
- Can we outsource the filing and record-keeping requirements in the Companies Acts?
- What information do we need to send to Companies House?
- What are the requirements for the company's registered office?
- What are the company's statutory books and records?
- What legal documents need to be kept?
- How are board meetings organised?
- How are shareholder (general) meetings organised?
- Who is responsible and what happens if the law is broken?
- Some directors are worried about activists finding out where they live. Can I keep directors’ residential addresses confidential?
1. What administration is required?
Under the Companies Acts, the officers of a company are responsible for:
- ensuring that all the legally required information is filed with Companies House (see 9)
- maintaining the company's registered office (see 10)
- keeping the company's statutory books and records (see 11)
- looking after the security of key legal documents (see 12)
- organising and recording board meetings (see 13)
- organising and recording general meetings of the shareholders (see 14)
- disclosing company details on premises and stationery, including the company's website
Officers are also responsible for complying with a host of other laws, such as employment, health and safety, tax, data protection, distance selling, etc. Someone must also deal with administrative tasks such as managing buildings, arranging insurances, maintaining domain name and trade mark registrations, etc.
2. Who is responsible for company administration?
The directors are ultimately responsible for ensuring the company complies with the law, including the Companies Acts.
The company secretary, if one is appointed (see 3), shares legal responsibility for Companies Act compliance with the directors.
The directors will usually delegate day-to-day responsibility for administrative tasks under the Companies Acts to any secretary they appoint, although the directors remain jointly responsible with the secretary for any default.
The directors may also give the secretary responsibility for legal compliance in other areas of law, and for other administrative tasks (see 1). The company secretary's Companies Acts responsibilities apply automatically, but any other responsibilities will depend upon the secretary's contract of employment.
3. Do we have to have a company secretary?
Private companies do not need to have a company secretary, although public companies must still have one.
In companies without a secretary, responsibility for, eg record-keeping and filing at Companies House will fall solely on the directors. Most companies are therefore likely to continue to have a secretary, and entrust the same responsibilities and tasks to them as they have always done.
4. If we do have one, who can we appoint as company secretary?
In a private company, the company secretary is not legally required to have any formal qualifications. Nevertheless, it is a good idea for the company secretary to have some experience or training.
There are rules stopping certain people from being secretary. For example:
- the company's auditor cannot be the company secretary
- an undischarged bankrupt cannot be the company secretary (unless given permission by the court)
In a public company, the directors have a responsibility to ensure that the company secretary is someone with the right knowledge and experience. The company secretary must also meet one of the following requirements:
- be a member of certain specified organisations such as the Institute of Chartered Accountants or the Institute of Chartered Secretaries and Administrators
- be a barrister or solicitor
- have been the secretary (or assistant secretary) of the company on 22 December 1980
- have been secretary of a public company for at least three out of the last five years
- have a similar position or professional membership that the directors feel makes them able to act as company secretary
5. If we appoint a company secretary, are they also a director?
A company secretary is not automatically a director, though there is nothing to stop them from being appointed as a director as well.
Unless a company secretary is also appointed as a director, they do not have the powers of a director. They are, however, an 'officer' of the company. This means that they share the legal responsibilities for administrative tasks such as filing at Companies House and maintaining registers and minutes (see 9 and 11), with the directors.
6. Who can sign administrative documents on the company's behalf?
Anyone who is authorised to do so by the directors, or is empowered to do so under the law. For example, if the company has a company secretary:
- A secretary can sign most of the forms required by Companies House.
- A secretary can sign documents, such as the minutes of a board meeting, to authenticate them.
- If a secretary and a director sign a document, it has the same validity as if two directors sign the document.
- If a secretary signs a contract of an administrative nature (such as an insurance contract), it is likely to be binding on the company.
7. Who does a company secretary report to?
Normally, a company secretary will work most closely with, and report to, the chair of the board. However, it is good practice for ultimate authority over the secretary to lie with the board of directors as a whole, rather than any individual director. For example, any decision to remove the company secretary from office should be taken by the board as a whole.
This is because a company secretary has a role in providing impartial advice and ensuring that the company is properly governed by the board. This could be compromised if the chairperson (or some other director) can exert undue influence on them.
8. Can we outsource the filing and record-keeping requirements in the Companies Acts?
Yes, but the directors and, if the company has one, the company secretary, will also continue to be responsible for the proper administration of the company (see 2).
Nevertheless, it can be useful to delegate routine administration to a specialist service provider, freeing the company's officers for other tasks. An inexperienced or unqualified company secretary may find that they need support in carrying out the role.
9. What information do we need to send to Companies House?
Each year, the company must send a standard form ‘annual return’ to Companies House, containing specified information about the company and its officers. The annual return is made up to a ‘return date’ and must be sent to Companies House within 28 days of that date.
You are also required to file a copy of your annual report and accounts at Companies House each year. Private company reports and accounts must be filed within nine months after the company’s year end. Public companies must file their company reports and accounts within six months of their company year end.
There are automatic civil penalties for late filing of annual accounts at Companies House, depending on how late they are.
Other filings which you must make with Companies House include:
- changes to the articles, and some shareholder resolutions
- changes to directors or their details
- changes to the registered office address
- changes to the company secretary or their details (if the company has one)
- any change to the company’s accounting reference date (ie your year end)
- changes to shareholdings or the company’s share structure
- if the company grants a mortgage or charge over an asset
Failing to file documents on time can lead to severe penalties for the company and its officers. Failure to file particulars of a mortgage or charge within 21 days after it is created can mean it is unenforceable and the money borrowed has to be paid back to the lender. You should also be aware that it is a criminal offence not to file some of this information.
If you are uncertain whether you need to file information as the result of a change you are making, take advice. In many circumstances, your legal or financial advisors will in any case already be involved.
10. What are the requirements for the company's registered office?
Every company is required to have a registered office. This is an official address to which Companies House will send any correspondence. It can also be used by anyone wishing to send you a legal document, such as a statutory demand for payment.
The registered office must be a physical place, not just a post office box. It's important that you do receive any documents sent there. A simple option is to use your business premises as your registered office. Companies which outsource filing and record-keeping tasks to an external service provider sometimes use that service's address as their registered office.
As well as having a registered office, you are legally required to display the company's name outside the registered office (and every other place of business including any 'inspection place' where you keep available for inspection any company records such as statutory registers required under the Companies Acts). You are also required to file a return telling Companies House if you want to change your registered office.
The signs at the registered office or inspection place must be displayed in a prominent position, so visitors can easily read them. Where a business location is shared by six or more companies, each company is only required to display its registered name for at least 15 continuous seconds at least once every three minutes, eg where it is using an electronic notice board.
A company must respond within five days to enquiries from any person who, in the course of business, requests in writing the address of the registered office or any other place where that person can inspect company records.
11. What are the company's statutory books and records?
The statutory books and records are records which you are legally required to keep. They normally include:
- a register of past and present directors and company secretaries
- a register of directors’ residential addresses (which is not available to the public)
- a register of shareholders and their shareholdings
- a register of debenture holders (if the company has issued any)
- a register of any mortgages or other charges over company assets
- minutes of board meetings
- minutes of shareholder general meetings
Shareholders have the right to inspect minutes of a general meeting, but not minutes of board meetings (unless, unusually, the articles of association or an agreement such as a shareholders’ agreement gives them that right). Registers are generally open to inspection by any member of the public — the exception is the register of shareholders, which can only be inspected for a ‘proper purpose’. If a request is made to inspect the register, the company must decide whether it is for a proper purpose within five working days.
Companies should have a formal policy to help them decide whether a request to inspect their register of shareholders is for a proper purpose or not, within the five-day time limit. Take advice.
A company must respond within five days to enquiries from any person who, in the course of business, requests in writing the type of documents kept at these locations.
The register of directors’ residential addresses (see 16) is also confidential and may only be disclosed in certain circumstances.
12. What legal documents need to be kept?
As well as the statutory books and records (see 11), you need to keep other legally important documents. These include:
- the company's certificate of incorporation
- copies of the company's articles of association
- any directors' service contracts
- any other important contracts with employees, customers or suppliers
13. How are board meetings organised?
A board meeting must be arranged if any director asks for one. All the directors must be given reasonable notice of the meeting.
Someone responsible must be mandated to take formal minutes of the meeting. If the company has a company secretary, this is usually entrusted to them. Once approved, they should be signed by the chairman of the meeting. They are then kept in the company's minute book as the official record of the meeting and any resolutions which were taken.
14. How are shareholder (general) meetings organised?
The board is responsible for calling general meetings, if it wants the company to take a decision which requires the approval of a general meeting: for example, changing the company’s articles of association. In addition, any shareholder or group of shareholders with at least 5% of the company’s voting shares can require the board to call a general meeting.
All directors and shareholders must be given written notice of any general meeting well in advance. The notice period is usually 14 days, although the articles can require a longer notice period, such as 21 days.
A meeting can usually be held on shorter notice — including immediately — if the holders of shares carrying 90% of the company’s voting rights agree it can (although the articles of association may specify a higher percentage).
Decisions at general meetings are passed either as ordinary resolutions, that can be passed by a simple majority of votes cast, or special resolutions, that require a 75% majority of votes cast. Copies of all special resolutions, and some ordinary resolutions, passed at a general meeting must be filed with Companies House within 15 days.
15. Who is responsible and what happens if the law is broken?
The company's directors have primary responsibility for ensuring that the company meets the requirements of the Companies Act. The directors and any company secretary can be held jointly liable for failing to do so. (If the company fails to file accounts, the directors are solely responsible, not the company secretary.)
16. Some directors are worried about activists finding out where they live. Can I keep directors’ residential addresses confidential?
Before 1 October 2009, directors always had to give their residential addresses to their company, to go in the company’s register of directors. The company then had to notify the address to Companies House. Both the register of directors and the record at Companies House were open to public inspection.
From 1 October 2009, new directors can give their companies a service address (for example, ‘the company’s registered office’) to go in the company’s register of directors, and to notify to Companies House. This address remains publicly available.
They must also give their residential addresses to their company (which must then notify it to Companies House), but residential addresses must be kept confidential by both the company and Companies House — they are ‘protected information’ — except in certain circumstances.
The company must maintain a separate register of directors’ residential addresses for directors who are individuals, and make sure this is not open to public inspection.
The address may be disclosed (or used) by Companies House are:
- To communicate with the director.
- To a public authority.
- Unless the director or proposed director, the company or a subscriber to the memorandum of a new company, has successfully applied to prevent the registrar from disclosing information to such an agency) a credit reference agency (which can only use it for certain purposes).
- If the director consents to the disclosure.
The application to prevent disclosure of residential addresses to credit reference agencies will only succeed if the applicant can show there is a serious risk he, or a person living with him, will be subjected to violence or intimidation as a result of the activities of a company of which he was, is, or proposes to become, a director, or he is or has been employed by a “relevant organisation” (which includes the police and various security forces).
Residential addresses already on the public record at Companies House prior to 1 October 2009 can be removed on application by the director or the company on behalf of the directors, but only if it can be shown that they (or a person living with them) are at risk of violence or intimidation, or they are or were employed by a relevant organisation. In any event, residential addresses already on the public record before 1 January 2003 cannot be removed.
There are also circumstances when the company may be required to disclose a residential address — where there is evidence that the director’s service address is ‘ineffective’, and when it is “necessary or expedient” in connection with enforcement of court order. Effectively, where the director cannot otherwise be traced and there is a legitimate reason why they should be found. If the address is requested, take advice.
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