Who are the Officers of the company?
“The key persons in the company like the company secretary, the directors, and managers of the company and auditors are the ones involved in running the company so, they are known as officers of the company. They have responsibilities and liability for acting on its behalf. The directors are the most important officers of them all”.
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What is Included?
- Who are the Officers of the company?
- Company Secretary
- Appointment of directors
- Directors’ powers
In business law Companies are not usually required to have a company secretary unless it is a public company. Many companies do, however, have them as those companies formed before 1 October 2009 were required to have one to ensure that a dedicated person was dealing with the company’s legal administrative requirements. The company must confirm on behalf of the secretary that he consents to act as a company secretary. The company must also notify the Registrar of Companies within 14 days of appointment.
The directors of the company decide what exactly the company secretary is required to do. The duties are mostly influenced by the size of the company and whether the company secretary works full time or not. The duties assigned could range from writing up minutes of board meetings and general meetings, keeping up to date the company’s internal registers to sending the necessary returns to the Register of Companies.
The company secretary has the authority to make contracts on behalf of the company’s business. They will have the actual authority to enter contracts of this type under the terms of their appointment.
A company is an artificial person, therefore, needs a human agent to act on its behalf and the directors do that. There are different types of directors: Executive directors, Non-executive directors, Shadow directors, De facto directors, Alternate directors, and Corporate directors.
Directors are protected from personal liability like shareholders because a company is a legal person with its liability. Every private company must have at least one director and every public company must have at least two. They take business decisions and make contracts on the company’s behalf and so have a considerable amount of power within the company structure.
Appointment of directors
The persons named as directors in the statement of proposed officers of a company will automatically become directors on the date of incorporation. They could also be appointed per procedure in the articles. It is necessary however to check that there are no statutory or article restrictions on whether a person is eligible to be a director.
Appointing a new director will involve passing either an ordinary resolution of the shareholders in a general meeting or a board resolution of the existing directors. Where the existing directors are also shareholders then a directors’ resolution would be a normal way to appoint a new director. Where the shareholders are different from the directors than the shareholders’ resolution is the more appropriate way as ultimately the shareholders own the company.
The company must make a statement on behalf of a person seeking appointment as a director, indicating his consent to act as a director. The appointment of a new director must also be notified to Companies House within 14 days of that person becoming a director. The Registrar of Companies will then send information on the roles and duties of the officers of the company i.e director to that director.
Directors are given powers by the articles and have the right to exercise all the company’s powers. They are the officers of the company and exercise these powers by making decisions at board meetings and where there is more than one, they usually act jointly and make decisions by a majority decision at a board meeting. This power once given to the directors belongs to the board and so cannot generally be exercised by the shareholders instead. This means shareholders cannot usually overrule or alter the board’s decisions.
The articles also give directors the power to delegate their powers. The articles allow directors as a board to decide to delegate any of their powers to a person or committee, by such means, to such an extent, concerning such matters and on such terms as they think fit. This gives them flexibility.
Directors may delegate their functions to other executive directors, and employees of the company should the company’s circumstances so require.
Directors also have the authority to bind a company as they are the officers of the company in a contractual relationship with a third party based on his position as an agent of the company. They will do so if they act with either actual or apparent authority. Anything exceeding this authority will not bind the company and the director will be personally liable for breach of warranty of authority to the third-party with whom he is dealing.