Introduction
As noted in Part I of the article, the office of a company secretary should be described as the company’s administrative officer who is empowered to exercise specific functions and responsibilities under Maltese law. This Part II is intended to provide a closer look at the performed role and daily duties of this officer relating – in this piece – to the first category described below.
The company secretary may serve as a focal point for creating order in a company’s affairs. His duties can broadly be categorised under three main groups:
- Functions and responsibilities imposed by statutory provisions;
- Functions and duties relating to board and general meetings;
- Miscellaneous functions and duties.
To add value to the Board of Directors of the company for which they work, company secretaries should also act as advisers to the Board, the organisation’s governance professionals and communicators for the Board both internally and externally.
Legal functions and responsibilities.
The Companies Act (“the Act”) imposes numerous duties on the company secretary. A vast majority of them are mostly of an administrative nature and relate to the keeping of registers and the filing of returns and other documentation with the Malta Business Registry (“the MBR” and “the Registrar”).
There are cases, where the Act specifically identifies the company secretary, along with other officers, as responsible for particular functions. But there are also instances, where the Act imposes duties on the company without a reference to the company secretary or other officers in particular.
Under Article 150 of the Act: Anything required to be done by a company under any provision of this Act shall be deemed also to be required to be done by the officers of the company. The category of officers without doubt include the company secretary.
This however, cannot be read as if all the company’s statutory duties are imposed also upon the company secretary. It is the Directors who are charged with the exercise of the managerial powers and it is the internal matters between the officers (specifically between the directors and the company secretary) how to allocate and divide the duties.
The company secretary’s statutory functions and responsibilities can be classify as follows:
(a) Keeping a statutory registers and minute books
The Companies Act stipulates that every company shall keep a register of its members and shall enter therein a certain number of personal details of the involvements.
The other corporate register required is a register of debentures. Apart from those, a company is also obliged to keep minutes of board and general meetings and to keep minute books for this purpose. The commented duties are practically the responsibilities of every company secretary. The company secretary has to note every change in the registered holder of shares in order to keep the registers updated.
The Companies Act (Register of Beneficial Owners) Regulations (L.N. 374 of 2017 as amended by L.N. 184/2018) introduced another requirement for every company to deliver upon registration a declaration containing information on all the beneficial owners of the company. In practice it became, the company’s secretary crucial responsibility to obtain and at all times hold adequate, accurate and up to date, the data in a register of beneficial owners.
Given that the aforementioned in relation to the keeping of records and of register of beneficial owners are imposed on the company itself, the responsibility for compliance with these obligations ultimately vests in its officers – including the company secretary.
(b) Preparing and filing returns and documents
The Companies Act prescribes number of returns and other documents to be prepared and filed with the Malta Business Registry. These duties are commonly delegated to the company secretary who liaises with the Registry in this regard. This certainly heightens the level of his responsibility.
The most common submissions to the MBR made by the company secretaries are in particular:
- Notices of transfer or transmission of shares
- Notices of change of beneficial ownership
- Amendments to the memorandum or articles of association
- Changes amongst officers and persons vested with representation
- Appointment and removal of auditor
- Annual Return
- Notice of dissolution
(c) Authentication of documents
The Companies Act empowers the directors and other authorised officers, but also the company secretary to sign a document or proceeding requiring authentication by a company. The Act moreover stipulates that all documents submitted to the Registrar shall be authenticated this way.
(d) Issue of share certificates
Every company is obliged, within two months from the allotment of any of its shares or debentures and within two months after the date on which a transfer of any such shares or debentures is registered with the company, and within one month from the date on which any such shares or debentures transmitted causa mortis have been registered in the name of the person entitled to be registered as the holder thereof, deliver the certificates of all shares, debentures or debenture stock allotted, transferred or transmitted causa mortis to the persons entitled thereto, unless the conditions of issue of the shares or debentures otherwise provide. (Article 120(1) Companies Act.)
In practise, it is the company secretary who would prepare the share certificates and coordinate the process of signing and delivering, but also often keeping the documents.
(e) Assisting the inspections
Under certain conditions prescribed in the Act, the Registrar may appoint one or more inspectors to investigate the affairs of a company and to report thereon. And it becomes the duty of all the officers, including the company secretary, of the company:
- to produce to the inspectors all accounts, accounting records and documents of or relating to the company;
- to attend before the inspectors who required to do so; and
- to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.
Any officer who refuses to produce any book or document that he is obliged to produce, or refuse to answer any question put to him with respect to the affairs of the company shall be guilty of a criminal offence.
The Registrar itself has certain powers and duties under the Companies Act with regard to the investigation of the affairs of a company. In this respect the Malta Business Registry may require a number of persons, including the company secretary, to produce various documents and to give explanations on any of such.
This responsibility of company secretary as one of the officers is backed by a number of penalties for offences like: failure to produce information, the destruction, alternation, mutilation or falsification of documents, the giving of information, explanations or statements that are false in a material particular, and the obstruction of the right of entry search.
To be continued.
Disclaimer: The above-mentioned article is simply based on independent research carried out by Dr. Werner and Partner and cannot constitute any form of legal advice. If you would like to meet up with any of our representatives to seek further information, please contact us for an appointment.
