Horst WickinghoffIntroduction
The role of the Company Secretary is often misunderstood, yet it encompasses a wide range of critical tasks and responsibilities.
Regardless of the title, a Company Secretary should not be confused with a "secretary" in the traditional administrative sense. There is a common misconception that the role is purely clerical—simply preparing documents for board meetings, sitting passively in the corner, taking notes, and typing up minutes. Today, however, this is likely the smallest part of the job.
Far from being limited to office administration, the office of the Company Secretary is of decisive—and growing—importance for effective corporate governance. Under Maltese law, the Company Secretary is an officer of the company, empowered to exercise specific functions and bear significant responsibilities.
In the first section of this article, we will outline the significance of the role and the ideal candidate profile. In the second part, we will delve into the specific responsibilities and daily duties.
In 1996, the obligation for every company—public or private—to appoint a Company Secretary was introduced into Maltese law via the Companies Act. According to Article 138 (3) of the Act: It is the duty of the directors to take all reasonable steps to ensure that the Company Secretary is an individual who appears to them to have the requisite knowledge and experience to discharge the functions of the office.
This requirement signaled stricter and more extensive filing obligations for both existing and newly formed companies. It also introduced a long list of duties imposed on the company administrator, with potential sanctions for non-compliance. At the same time, it established a higher standard of professionalism expected in the provision of corporate secretarial services.
The Profile
The Companies Act does not demand a specific academic or professional qualification for a Company Secretary of a private company. However, it is hard to imagine that the signatories of the Memorandum and Articles of Association—or the directors making a subsequent appointment—would choose a candidate at random. The appointee must undoubtedly possess a sufficient understanding of company law principles and administration.
Specifically, the candidate should be familiar with the nature and content of the company's Articles of Association, the division of powers between the General Meeting and the Board of Directors, the concept of shares and share transfers, the different types of meetings and resolutions, and the roles of the Chairman, Managing Director, Executive Directors, and other officers. Above all, they must master the various duties imposed upon them by the Companies Act.
From a practical standpoint, the Company Secretary must also understand how companies operate and are managed. This requires personal professional experience commensurate with the scale of the company's operations.
The Companies Act also outlines specific disqualification criteria. A person is not qualified for appointment as a director or Company Secretary if:
- They are interdicted or incapacitated or are an undischarged bankrupt;
- They have been convicted of any of the crimes affecting public trust, or of theft or fraud, or of knowingly receiving property obtained by theft or fraud;
- They are a minor who has not been emancipated for trade;
or
- They are subject to a disqualification order.
The Companies Act also stipulates that a sole director cannot simultaneously serve as the Company Secretary.
It is worth noting that the Act allows for the appointment of more than one Company Secretary. However, this is rarely useful in practice. If more than one person holds the office, each is independently liable, regardless of any internal division of duties arranged by the directors.
Roles and Daily Duties
As mentioned, the Company Secretary is an officer of the company empowered by Maltese law to perform specific functions. This section examines the role and daily tasks, focusing primarily on statutory obligations.
The Company Secretary often serves as the central point for bringing order to a company's affairs. Their duties can be broadly categorized into three main groups:
- Functions and responsibilities arising from statutory regulations;
- Functions and duties related to Board and General Meetings;
- Other administrative functions.
To add real value to the Board they serve, Company Secretaries should also act as advisors to the Board, specialists in corporate governance, and communicators for the Board both internally and externally.
Statutory Functions and Responsibilities
The Companies Act ("the Act") imposes numerous duties on the Company Secretary. The vast majority are administrative in nature, relating to maintaining registers and filing reports and documents with the Malta Business Registry (MBR).
In some instances, the law explicitly names the Company Secretary, along with other officers, as responsible for specific functions. In other cases, the law imposes duties on the "company" without singling out the Secretary.
However, according to Article 150 of the Act: Anything required to be done by a company under any provision of this Act shall be deemed to be required to be done by the officers of the company. As an officer, the Company Secretary falls squarely within this scope.
This does not mean every single legal duty of the company falls on the Secretary's shoulders. Directors are entrusted with management powers, and it is an internal matter among the officers (specifically between directors and the Secretary) how tasks are assigned and divided.
The statutory functions and responsibilities of the Company Secretary generally include:
Maintaining Statutory Registers and Minute Books
The Companies Act requires every company to keep a register of its members, recording specific personal details of the shareholders.
Another mandatory record is the register of debentures. Furthermore, a company is obliged to keep minutes of Board and General Meetings and to maintain minute books for this purpose. These tasks practically always fall to the Company Secretary. They must also record any changes in share ownership to keep the registers current.
The Companies Act (Register of Beneficial Owners) Regulations (L.N. 374 of 2017, as amended) introduced a further obligation for every company to submit a declaration containing information on all beneficial owners upon registration. In practice, it has become a crucial duty of the Company Secretary to obtain this data and keep the Register of Beneficial Owners accurate and up to date at all times.
Since these record-keeping obligations are imposed on the company itself, the responsibility for compliance ultimately lies with its officers—including the Company Secretary.
Preparation and Filing of Returns and Documents
The Companies Act prescribes a series of returns and documents that must be prepared and filed with the Malta Business Registry. These tasks are typically delegated to the Company Secretary, who acts as the liaison with the Registry. This naturally increases their level of responsibility.
The most common filings submitted to the MBR by Company Secretaries include:
- Notices of share transfers or transmission of shares
- Notices regarding changes in beneficial ownership
- Amendments to the Memorandum or Articles of Association
- Changes in officers and persons with legal representation
- Appointment and removal of auditors
- Annual Returns
- Notice of dissolution
Authentication of Documents
The Companies Act authorizes directors and other authorized officers, including the Company Secretary, to sign a document or proceeding requiring authentication by a company. The law further stipulates that all documents submitted to the Registrar must be authenticated in this manner.
Issuance of Share Certificates
Every company is obliged to issue certificates for all shares, debentures, or debenture stock allotted or transferred. This must be done within two months of allotment or the registration of a transfer, and within one month for transmissions causa mortis (inheritance), unless the terms of issue provide otherwise. (Article 120(1) of the Companies Act.)
In practice, it is the Company Secretary who prepares the share certificates, coordinates the signing and delivery process, and often retains custody of the documents.
Assistance with Inspections
Under certain conditions defined by law, the Registrar may appoint one or more inspectors to investigate and report on a company's affairs. It then becomes the duty of all officers, including the Company Secretary, to:
- Produce all accounts, accounting records, and documents relating to the company;
- Attend before the inspectors when required; and
- Give all assistance to the inspectors in connection with the investigation that they are reasonably able to give.
Any officer who refuses to produce a required book or document, or refuses to answer a question regarding the company's affairs, is guilty of an offense.
The Registrar also has specific powers and duties regarding the investigation of a company's affairs. In this context, the Malta Business Registry may require various persons, including the Company Secretary, to produce documents and provide explanations.
This responsibility is backed by a range of penalties for offenses such as failure to provide information, destroying or falsifying documents, providing materially false statements, or obstructing the right of search.
To be continued.
Disclaimer: The above article is based on independent research by Dr. Werner & Partners and does not constitute legal advice. If you would like to meet with one of our representatives for further information, please book an appointment with us.
