We write a lot about the different roles required by the regulatory offices when running or setting up a business in Australia. These roles and their duties can get confusing but is an important aspect that needs due attention to choose the right person, especially with major changes in management.
Effective business management means your growth may warrant a company secretary to manage the pieces of the puzzle. And while not mandatory, the role can play a significant part for some businesses and under certain circumstances.
This article was prompted when International Accounting Solutions did a health check for a new client – an Australian subsidiary for a US company. During our health check, it became apparent the company had not fulfilled its obligations with ASIC.
These are serious and fineable offences and it is the responsibility of the resident director to ensure compliance with ASIC.
Who you appoint to these roles and their ongoing responsibilities does need to be taken seriously. Their clear, defined responsibilities ensure your entity meets its ongoing company regulatory obligations.
Let’s delve into the roles required for an Australian company first to see how a company secretary fits into the picture.
One of the requirements stipulated by ASIC when setting up a company in Australia is that all private companies registered in Australia must have a local Australian resident appointed as a director of the company at all times.
A proprietary company (Pty) must have at least one director, while a public company must have a minimum of three directors, at least two of whom must ordinarily reside in Australia.
The role of the Australian resident director is the management of the affairs of the company. They must ensure the company is acting responsibly and meets its ASIC obligations.
Read more on the role of the resident director nominee here.
A public officer is the Company’s representative to the Australian Tax Office and is responsible for the Company’s obligations under the Income Tax Assessment Act 1936.
The public officer is answerable for everything that is required by the company for tax-related purpose and if in default, is liable to the same penalties.
Please note, they are not liable for the payment of tax due by the company.
Read more about the eligibility and role of the public officer here.
What is a company secretary?
As set out under the Corporations Act 2001, the role of the company secretary is to administer the affairs of the company through governing and monitoring.
This includes keeping accurate financial records, deeds, minutes of meetings, maintaining a member register, passing insolvency resolutions and generally keeping all company details up to date.
It is not a legal requirement to appoint a company secretary in an Australian Proprietary or a subsidiary of an international company.
The importance of a company secretary
In recent times, appointing a company secretary in a business has become more prevalent.
The required skill base around legal and tax law, necessary to fulfil the role as the resident director and public officer, especially when conducting business in an unfamiliar country, places extra stress on ensuring the business is up to date on these obligations.
Businesses as a whole, are finding increasing pressure from regulatory and compliance burdens as well as time and profit pressures. The company secretary could relieve some of these compliance duties.
There has been emphasis placed on the company secretary in playing an increasingly important part in corporate governance, administering and transparency.
An effective company secretary can progress a business and make a difference in the ongoing regulatory compliance of a business.
Who can be a company secretary in Australia?
The role of company secretary for a proprietary company is optional. The resident director or nominee can be the company secretary as well.
- A company secretary must be a natural person who is over 18 years of age and must ‘normally’ reside in Australia.
- The directors appoint the company secretary and determine the terms and conditions of the office, including remuneration.
- The person appointed as company secretary must give their signed consent to act as a secretary before being appointed and this signed consent must be kept by the company.
Don’t forget to notify ASIC of the appointment of company secretary within 28 days – here are the instructions to do this.
International Accounting Solutions offers company secretarial services for a nominal monthly fee. As part of ensuring business compliance, our company secretary has extensive knowledge of ATO and ASIC compliance regulations, and Australian business affairs. We will also ensure –
- Regular meetings are held, and the paperwork signed and lodged for these meetings
- Act as liaison when ASIC notifies them.
- Ensure complete compliance reporting and lodging of all paperwork
Does my business need a company secretary?
As a resident director or public officer, are you struggling to keep up with the requirements of the roles’ responsibilities? Have you slipped in meeting some of these requirements? Is it time you looked at appointing a company secretary?
If you are still unsure, International Accounting Solutions can complete a health check on your business to see the areas where you are complying and the areas your business needs help. A health check will highlight where your business needs to focus its attention.
Let’s relieve some of your pressure and get it right, so you and your business can strive and thrive – please call us on +61 2 8298 5301 or complete the form and we’ll get back to you.
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