The role of a company secretary is different from the layman function of just a simple clerical or secretarial officer or a secretary in the traditional sense. A company secretary is charged with the duty of ensuring the effective administration of a company. He or she also makes sure that the firm complies with all legal and regulatory requirements and that the board of directors' decisions are carried out.
The company secretary makes sure that a firm complies with all applicable laws and rules that govern the organization for which He or she serves in that capacity.
Essentially, a private firm's requirements for a company secretary are very different from those of a public company. Therefore, in a public company, the company secretary must satisfy one of the two requirements listed below as per section 332 of the Companies and Allied Matters Act 2020:
A director's responsibility in a private company is to make reasonable efforts to ensure that the Secretary is someone with the necessary training and experience to carry out the Secretary's duties (See section 332 of CAMA 2020). Consequently, a company secretary needs to have technical knowledge of business issues.
Company Secretaries can be appointed by a company's Managing Director, the Board of Directors of a company or its founders.
The Old Companies and Allied Matters Act (2004) made it compulsory for every company to have a company secretary. However, Section 330 (1) of the new Companies and Allied matters Act (CAMA) 2020, states that except in the case of a small company, every company shall have a company secretary.
Moreover, subsection 2 of the same section requires a company secretary for a public company. Thus, a company secretary is not required for a small company, but a company secretary is required for a public company.
Essentially, the following companies are exempted from having an appointed company secretary under the 2020 CAMA:-
– Companies with a net assets value of below 60 Million Naira.
– Companies with an annual turnover level of below 120 Million Naira.
A company secretary bears diverse responsibilities of ensuring the efficient management and administration of the company. They serve as advisers to the directors on regulatory compliance and other compliance matters. Though having a secretary in a small company is optional, it is however important to so have a company secretary thus small companies should weigh the importance of having a company secretary before choosing whether or not to have one.
In conclusion, it is pertinent for business owners to understand the role and importance of a company secretary as well as the position of Nigerian law in this regard in order to enable business persons to make better-informed decisions regarding the appointment of key staff going forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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