The role of the Company Secretary in Kenya has significantly grown with the increasing focus in recent years on corporate governance in Kenya in a company’s proper compliance with both the law and best practice.
Section 2 of the Companies Act, 2015 (the Act) defines a company’s officer as including the company’s secretary.
Appointment of a company secretary
A private company is required to have a secretary only if it has a paid up capital of Kenya shillings five million (KES. 5,000,000.00) or more while every public company is required to have at least one secretary as provided in sections 243 and 244 of the Act respectively.
Nevertheless, it is also advisable to appoint a company secretary (even if its paid up capital is below Kenya shillings five million (KES. 5,000,000.00)) to ensure that a company operates within the law and benefits from independent advice on regulatory and corporate governance matters.
Qualifications of a Company Secretary
To qualify as a company secretary, section 246 of the Act provides that the directors of a company are required take all reasonable steps to ensure that the company secretary is a person who has the requisite knowledge and experience to discharge the functions of a secretary of the company and meets the qualifications of section 20 of the Certified Public Secretaries of Kenya Act as well as be a holder of a practicing certificate issued thereunder.
Roles and responsibilities of a Company Secretary
A company secretary performs the following duties:
Maintenance of the statutory registers of the e.g shares register, directors' records, register of shareholders.
Filing the company’s annual returns by preparing and ensuring timely lodgment of the returns annually.
Ensuring that the company complies with its Memorandum and Articles of Association.
Preparing notices and agenda for the annual general meeting.
Arranging meetings of the directors and the shareholders.
Recording and keeping minutes of all proceedings at meetings of the directors and the shareholders.
Notifying the companies’ registry of any significant changes in the company’s structure or management.
Ensuring the security of the company’s legal documents.
Ensuring corporate governance models are being complied with.
Be the custodian of the company stamp.
The secretary as an officer of the company may be liable for defaults committed by the company. For instance, permitting the inclusion of misleading, false or deceptive particulars in a register. This attracts a conviction for a term not exceeding two years or a fine not exceeding one million shillings, or to both as stipulated in section 252 of the Act.
In conclusion, a company secretary plays a fundamental role in ensuring that a company operates within the law, manages the day to day administration and complies with various legal requirements expected of companies.
Company secretaries act as gatekeepers tasked with giving independent advice on regulatory and corporate governance matters.
If you have any queries relating to the above, please do not hesitate to contact Bernard Musyoka . Please note that this e-alert is meant for general information only and should not be relied upon without seeking specific subject matter legal advice.
by: Bernard Musyoka and Keith Gongolo.