Can a Company Secretary be Held Personally Liable for Debts?
For many businesses the company secretary fulfils an important role of keeping on top of administrative duties, and ensuring that any decisions made by the board of directors are accurately carried out.
As an officer of the company, the company secretary actually shares many legal duties with company directors and it’s for this reason that disqualified directors are prevented from filling the role.
What is a Company Secretary Responsible for?
The company secretary is tasked with seeing that the core administrative responsibilities of the company are fulfilled. These include:
- Filing Annual Returns
- Ensuring the Confirmation Statement is sent to Companies House
- Filing the annual director’s report
- Files the auditors report if your company size make that applicable (£10.2m annuals or has assets totalling more than £5.1m )
A company secretary may be held personally liable should the rules laid out in the Companies Act not be adhered to. Just as directors themselves might be held financially responsible for negligence, so too does the Companies Act make clear, in almost 100 of its sections, the offences which any company officer could commit.
These might include serious criminal offences such as fraudulent trading, as well as tmore benign situations such as administrative oversights.
Most of these offences apply to every office ‘in default’ which means anyone who “authorises or permits, participates in, or fails to take all reasonable steps to prevent” a wrongful act being carried out.
Where HMRC finds evidence of either negligent or fraudulent behaviour it has various mechanisms in place, such as a Personal Liability Notice. These are sent to make officers personally responsible for debts owed HM and Revenue.