Every company comprises members who play various roles in running the affairs of the company. These persons can either be the company secretary, shareholders, or directors with differing responsibilities, all with a shared or common goal of increasing the success rate of the company. Depending on the type of company, some members play passive roles and need not be named during registration, while others are not only to be named but also play an integral role in the company’s daily operations.
A company secretary is one of such persons who plays a pivotal role in the running of the affairs of the company. They are mostly in charge of providing administrative support, preparing for and attending meetings, filing statutory documents, maintaining statutory records and registers, etc. The Companies and Allied Matters Act 2020 requires all companies, except small companies, to appoint a company secretary..[1] One of such companies is a public company. Where the latter fails to appoint a secretary, the directors will be held liable to a fine in such amount as specified by the Commission. Our primary focus in this article is to advance more discourse on the subject of the appointment and removal of a company secretary.
What is the qualification for the appointment of a company secretary in Nigeria?
Generally, the appointment of a secretary for a private company is not mandatory. Such appointment is at the discretion of the director(s) with no special qualification attached but where the directors elect to appoint one, then such directors are mandated by law to take reasonable steps to ensure that the person to be appointed secretary has the requisite knowledge and skill to perform the duties of a secretary.[2] In the case of a public company, the law further provides that the person must either be a member of the Institute of Chartered Secretaries and Administrators, a legal practitioner, a member of any professional body of accountants, or a person who has held the office of a public company for at least three years.[3]It is interesting to note that the secretary of a public company can either be an individual or a firm[4].
When and how can a company secretary be appointed?
The appointment of a company secretary is a compulsory requirement except for small companies.[5] The appointment is made by the directors of the company. There is no express provision on how such an appointment is conducted and in what kind of meeting the appointment is to be done, especially concerning public companies. In practice, the directors are expected to submit an appointment letter together with the board resolution appointing such secretary. These documents are to be filed with the Corporate Affairs Commission to update the company’s records. This procedure applies mostly during the change or removal. There is an exemption for the appointment of a company secretary by small companies [6]. The law does not specify when a company secretary should be appointed. Ideally, given the mandatory requirement for appointing a company secretary, especially for public companies, it is advisable to make this appointment during the incorporation stage. Doing so can help prevent issues related to regulatory non-compliance.
The appointment of a company secretary is essential, particularly for public companies prescribed by the Corporate Affairs Commission[7]. This is not the case for private companies.
On what grounds can a company secretary be removed?
The Companies and Allied Matters Act provides that a company secretary may be removed solely by the directors who made the appointment[8], but in the case of a public company, such removal can be done by the directors or, subject to the approval of the general meeting. Thus, the notice for removal can be on the grounds of fraud and serious misconduct or any other ground.[9]
Can you remove a company Secretary without their consent?
Legally, the directors are responsible for the removal of a company secretary. In the case of a public company, the directors are further required to serve a notice of removal to the company secretary with an option to either make a defence or resign within seven working days.[10] Looking at the relevant sections of CAMA 2020 on the removal of a secretary, the consent of the secretary is not a prerequisite for removal with regard to companies other than small companies. In the case of a public company, the board of directors must serve a notice of removal to the company secretary. Upon receiving this notice, the secretary has the option to either defend against the removal or choose to resign. Based on the relevant provisions of the law on removal, there is no laid-down procedure for removal for other companies that are not public companies. Hence, it can be deduced that notice is dispensed with in the case of other companies that are not public companies, thus leaving the procedure for removal at the discretion of the director(s), which can either be with or without the consent of the company secretary.
CONCLUSION
Knowing the provisions of the law on the appointment and removal of a company secretary is a mandatory requirement for companies other than small companies. Therefore, to ensure legal compliance, directors must always refer to the relevant provisions of the law on the requirements of appointment and removal of a secretary.
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[1] Section 330 of CAMA 2020
[2] Section 332 CAMA 2020
[3] Section 332 (a), (b), (c), (d) CAMA 2020
[4] Section 332(e) CAMA 2020
[5] Section 330 (1) CAMA 2020
[6] Section 330 (1) CAMA 2020
[7] Section 330 (4) CAMA 2020
[8] Section 333 (1) CAMA 2020
[9] Section 333 (3) (a) CAMA 2020
[10] Section 333 (2) (c) and (d) CAMA 2020
[11] Section 333 (2)
