Company Law Reform Bill [HL]

My Lords, company secretaries may play both an internal and an external role in their companies. However, at present, there is no particular statutory blueprint for their internal role. It is a matter for each company to decide the responsibilities and functions of its secretary, and there is probably much variation. In the light of this, we entirely accept the deregulatory recommendation of the Company Law Review that all private companies should be able to decide for themselves whether to appoint a secretary. The line drawn in the Bill, at the boundary of whether a company is public or private, is clear and obvious for all to see. It can be changed only by re-registration. As was pointed out in Grand Committee, the problem with trying, as these amendments do, to draw a boundary based on turnover and balance sheet totals, is that a company may well find itself in the position of discovering that it has been required to have a secretary only at the end of a financial year when it comes to draw up its accounts. Also the position as to whether it is required to have a secretary might change from year to year. This would clearly create an unsatisfactory degree of uncertainty. In relation to third parties, company secretaries are important as they may be co-signatories for executing documents for their companies and may authenticate documents and proceedings for them. As I have already explained, we propose to provide for companies to authorise individuals for them. This will not be a requirement. It will provide a new option for all companies, private and public, whether or not they have a company secretary. In view of this proposal, I consider it would be excessively regulatory to require any private company to appoint a company secretary. This is a matter best left to such companies to decide. I therefore hope the noble Lord will agree to withdraw the amendment.