An essential requirement in keeping a company compliant with company law is annual company secretarial compliance. This service is often provided by the accountant or solicitor and it is vital that the firm has the necessary process and procedures in place to ensure they provide this service to their clients.

Risk of Providing Company Secretarial Services

Like any service being provided the big risk is if something goes wrong and you get sued.
Company Secretarial practice is no different. We need to examine the risks from two perspectives

Ad Hoc Work

It never amazes me how much a practitioner goes above and beyond to help their client. This is something to be admired and feared! Particularly when it comes to Co Sec! We have seen so many cases where things were done wrong or not completed and has led to way bigger issues. Because things are never really reviewed at the time and if CRO never picks up on it people think its fine however when a company is being bought or sold or is in legal dispute that is when things get reviewed with a fine tooth comb and if it wasn’t done correctly this could lead to a major issue and cost and expense for the client that would far out weigh the fee to do it right the first time.

  • The firm prepared documentation that was never completed or filed
  • No minutes were prepared to approve the changes or the register written up to date
  • The person that instructed the firm did not have the authority to do so and the documentation has been prepared and filed
  • The client thinks you are looking after it

If the firm is acting as the named Company Secretary you should consider providing this through a company. The firm should also consider the risks of acting as named company secretary. The directors are responsible for the compliance of the company however as the company secretary is an officer of the company they may have exposure under the Tax Acts and the firm should also consider the PR impact if something goes wrong.

Many accountancy firms have just one engagement letter covering all aspects of the service provided by the firm. In the case of Company Secretarial services I would encourage a separate engagement letter setting out what services the firm will provide and more importantly what services it will not provide. It should also deal with the liability for late filing penalties and the responsibilities for the audit if the company is late filing. Even to cover the cost of the fees for express post or the courier!

How Can CLS Help

We can review the existing company secretarial function and provide practical advice, procedures to ensure the firm provides a profitable and complete service to their clients. For more information please contact one of the team

For more information contact one of the team on 059 9186776 or send us an email.

 

Please Note:

Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.

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