Role of a Company Secretary in the DIFC

The role of the company secretary is pivotal in supporting and coordinating between various shareholders and directors of a company for the preparation and submission of documents to the DIFC authorities primarily the Registrar of Companies (RoC), updating and maintaining records, and advising the company’s board on changes in legislation which affects the administration and operations of the company.

The company secretary is one of the many cogs that make the company wheel continue to turn. However, the role of a company secretary is often undervalued as the function is more administrative rather than managerial. Whilst not having the range of duties and responsibilities of directors, a company secretary has critical tasks delegated to him/her and may be liable if those tasks are not carried out on time or in an appropriate manner, as prescribed by the DIFC law.

According to the DIFC Companies Law, every public company shall have at least 1 secretary whereas, in a private company it is optional and not a compulsion. 

 

Qualifications Of A Company Secretary

As per the DIFC laws, no formal qualification has been laid down for the company secretary. The appointment of the company secretary is at the discretion of each company. According to the DIFC new companies Law 2018, the company secretary must have requisite knowledge and experience to discharge the function of the Secretary of the Company and have held office for at least 3 years at a public body corporate. In a DIFC company, the secretary may be an individual, a body corporate, or a partnership, provided that in the latter cases the entity must be incorporated, established, or registered in the DIFC or registered in a jurisdiction approved by the RoC. A company secretary need not necessarily be an employee of the company, and the services can be contracted out to any individual or a professional firm. 

 

Duties And Responsibilities Of A Company Secretary:

The company secretary has been mentioned in the DIFC Companies Law Number 5 of 2018 though there is no comprehensive code of conduct defining the duties and responsibilities for company secretaries. The company secretary shall:

  1. Act honestly, in good faith and lawfully, and in the best interest of the company; 
  2. The secretary’s presence should be pervasive in all meetings whether they be annual general meetings or statutory meetings of shareholders as well as meetings of the board and committees thereof;
  3. Informing all directors and shareholders of the company through a minimum of 21 days’ notice, when a statutory meeting request is received from any of the directors/shareholders; maintenance of details of the meeting, such as the date and venue of the meeting, names of shareholders/directors attending, etc.;
  4. The secretary shall keep the record of the company. Coordinate and submit the annual returns of the company to the RoC before the end of the financial year;
  5. The company secretary has the duty of ensuring and enabling adequate information flows within the board and committees; 
  6. Act as a channel between the board and senior management and non-executive directors; 
  7. Advise the board on all governance matters;
  8. The company secretary is, together with the chairperson, responsible for the proper administration of meetings;
  9. The company secretary should also ensure that minutes are produced for all meetings.
  10. The company secretary should circulate the minutes to the board before the next board meeting and the opportunity should be given to directors at the next meeting to ask any questions that they may have about the minutes;
  11. Renewal of the company’s commercial license means Preparing all the necessary documents required for the renewal of the licence. Submitting the prescribed fees on behalf of the company, and filing the documents with the RoC; Here the secretary can also seek advice from experienced commercial lawyers. 
  12. Coordinate the submission of the financial statements and auditor’s report (FSAR) to the RoC; 
  13. Complete the DIFCSTAT annual economic survey. This involves coordinating with the company to obtain the necessary information required to complete the survey on behalf of the company;
  14. If any dissolution notice is issued by the DIFC authorities against the Company secretary is expected to Advise the company on the procedure, requirements, documentation, etc. mandated by DIFC; draft a special resolution for the change recorded;
  15. Prepare/modify the relevant documents, registers, and articles as applicable and submitted the relevant documents to the RoC
  16. A company secretary should exercise caution in ensuring that there are no conflicts of interest. Breach of the above duties, negligence, and defaults in payments made on behalf of the company may result in fines being levied on the company and possibly in the secretary becoming subject to internal disciplinary proceedings.

 

There is an implicit understanding that information provided to the company secretary is accurate and bona fide in all respects. The company secretary is not expected to ratify and ensure the veracity of the information provided and would not be liable if he can prove that he acted in good faith A company secretary may not be held liable or be subject to criminal proceedings in case of fraudulent dealings of the company, misappropriation of funds, etc. unless he or she is knowingly involved in the wrong-doing. In conclusion, the company secretary’s role, albeit administrative, is a vital component in the operations of any company.