Minutes
Section 248 provides that every company must keep
minutes of all proceedings at meetings of directors. The
members of the company have no general right to inspect
the minutes of board meetings but the directors have (R
v Merchant Tailors’ Co(1831)).
The minutes must now be kept for at least ten years.
Failure to keep them is a criminal offence by those officers
in default. Liability no longer falls upon the company; it
rests solely with the officers.
The secretary
Part 12 of the 2006 Act applies. Main points to note are
that a private company is not required to have a com-
pany secretary. Where a private company does in fact
make an appointment, which it may choose to do, that
person appointed has all the duties and powers of a
company secretary (see below).
A public company must appoint a secretary. There is
a new power for the Secretary of State to give the com-
pany concerned a direction to make an appointment.
It is an offence to fail to comply with the direction.
The new law requires a company with a secretary to keep
a Register of Secretaries; not, as in the past, to include
them in the Register of Directors and Secretaries.
Where no secretary is appointed, the duties can be
carried out by any person nominated and authorised by
the board. A corporation may be a secretary to a com-
pany, but a company, X, cannot have as secretary a
company, Y, if the sole director of company Y is also the
sole director or secretary of company X.
The CA 2006 provides that a provision requiring or
authorising a thing to be done by or to a director and
the secretary shall not be satisfied by its being done by
or to the same person acting both as director and sec-
retary. This means that the single-member company
may have only one member but must have at least two
officers since the sole member/director cannot also be
the secretary.
It is usual for the secretary to be appointed by the
directors, who may fix his term of office and the con-
ditions upon which he is to hold office. The articles usu-
ally confer such a power upon the board. The secretary
is an employee of the company. He is regarded as such
for the purpose of preferential payments in a winding-up.
The secretary enjoys the power to make contracts on
behalf of the company even without authority. This is,
however, restricted to contracts in the administrative
Part 2Business organisations
188
operations of the company, including the employment
of office staff and the management of the office, together
with the hiring of transport. Thus, in Panorama Devel-
opmentsv Fidelis Furnishing Fabrics(1971) the sec-
retary of a company ordered cars from a hire firm,
representing that they were required to meet the com-
pany’s customers at Heathrow. In fact, he used the cars
for his own purposes. When the company discovered
this, it refused to pay the bill. The court, however, held
that the company was liable to pay it. A company sec-
retary was a well-known business appointment and such
a person had usual authority, even if no actual author-
ity, to bind the company to the contract of hire.
His authority is not unlimited. He cannot, without
authority, borrow money on behalf of the company (Re
Cleadon Trust Ltd(1939)). He cannot, without author-
ity, commence an action in the courts on the company’s
behalf (Daimler Co Ltd v Continental Tyre and Rubber
Co Ltd(1916)). He cannot summon a general meeting
himself (Re State of Wyoming Syndicate(1901)), nor
register a transfer of shares without the board’s approval
(Chida Mines Ltd vAnderson(1905)). These are powers
which are vested in the directors.
Certain duties are directly imposed on the secretary
by statute. The most important of these includes the
submission of the annual return. The CA 2006 authorises
the company secretary to sign forms prescribed under
the Act.Company insolvency and
corporate rescueSection references are to the Insolvency Act 1986 unless
otherwise indicated.
In the event that a company becomes insolvent, the
company’s business and assets and its affairs generally
will be controlled by an insolvency practitioner. The
relevant practitioner will be a member of an accounting
firm or a firm specialising in insolvency work or, in
the case of a liquidation, a person from the Official
Receiver’s Office. The Official Receiver and those who
act in that capacity are civil servants who take office in
companies in liquidation and continue to wind them up
unless there is an appointment of an insolvency practi-
tioner from the private sector, e.g. from an accounting
firm. Such an appointment would be made by the creditors
if they so wished.