Directors, Secretaries and Shareholders, oh my!
If you've done a bit of research about setting up or running a company, you'll find that there are a few positions that someone can take in the business. We're going to take a look at three of these - directors, secretaries and shareholders.
Every company has a board of directors who are appointed to oversee the day to day running of the company, and ensuring it meets its responsibilities and deadlines. Although companies come with Limited Liability, each director does also have a personal responsibility for the company.
Some of the duties that directors oversee are:
- ensuring documents are delivered to Companies House when requested
- appointing senior management
- accounting for the company's activities (both financially and otherwise)
- setting the company's objectives
- monitoring progress of the company towards achieving and meeting its aims and objectives
A director doesn't have to reside in the UK, but they must be over the age of 16 and not have been bankrupt.
There's also the option of a corporate director, which is another organisation rather than an individual. If you would like to learn more about directors, take a look at our previous blog post, 'Appointing and Resigning a Director'.
The secretary position is mainly an administrative, but high level, role ensuring the statutory register is maintained and in good order, and ensuring the responsibilities of the company are met. Such responsibilities include:
- updating records held at Companies House
- organising and arranging the company's board meetings and AGM (Annual General Meeting)
- recording and keeping minutes from board meetings
- liaising with shareholders and stakeholders with the latest updates on the company
Secretaries, like directors, are limited to those over 16 but they don't have to reside in the UK. However, they can't be the company's auditor or be an 'undischarged bankrupt' (unless they have permission from the court).
Remember: Even though a company secretary can maintain company registers, organise meetings and more, the ultimate responsibility lies with the directors.
Since April 2008, the requirement for a secretary was removed for a private limited company, and is no longer a statutory requirement.
Shareholders are individuals or other organisations that own a share of the company and can vote on many issues within the company. The power of the vote and extent of ownership within the company is defined by the percentage of the number of issued shares they own.
There are different types of shares that someone can hold. These are normally defined in the Articles of Association. Generally, they offer different voting rights, dividend rules, and more.
Shareholders normally enjoy the benefit of dividends too, which means they can receive an income from the company based on quarterly or annual profits.
You can learn more about the different types of shares here.
The roles are fairly basic, and there can be some cross over too. A director can also be a shareholder or a secretary, but each role has it's own responsibilities.
If you need help when you're incorporating your company, contact us, and we'll try our best to help you.
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