charity company secretary slides stone king llp

Governance and Company

Secretary Forum

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Getting it right as a Charity

Company Secretary

London

6 November 2014

© Stone King LLP

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Today’s Plan

• Session one: Company Law Overview

• Session two: Articles of Association

• Session three: Role of the Company Secretary

• Session four: Companies House Filings – Practical Guide

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One - Company Law Overview

– Charitable companies are normally companies limited by

guarantee and do not allow distribution of profits to

Members

– Charities have Members and Trustees (who are normally

Directors)

– Charities are primarily governed by the Charities Act 2011

and the Companies Act 2006

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One – Members

• Similar to the role of Members in a share company

• No shares are issued

• Guarantee to pay a certain amount on a winding up (normally £1.00 or£10.00)

• Membership not transferable

• No individual financial interests in the Charity

• Have control over the charity by passing resolutions

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One - Members

Members’ Rights

Approve major decisions such as:

• amending the articles of association

• changing the Charity name, except where delegated to director’s underthe articles

• removing a Trustee (by ordinary resolution and subject to certainstatutory procedures)

• may appoint Trustees if allowed under the Articles

• substantial property transactions

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One - Members

Members’ Rights cont.

The Members also have the general right to:

• vote at general meetings and pass written resolutions

• receive notice of general meetings

• receive a copy of the annual accounts

• requisition (force the Trustees to call) a general meeting

• circulate a written statement to Members

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Two – Members Resolutions

NB: Members may approve accounts when laid before them at a General

Meeting but Trustees are ultimately responsible for their approval.

Members Special Resolution

at least 75% to pass

• Changing the name of the

Charity

• Adopting new Articles

• Direction to act or refrain

Members Ordinary Resolution

Over 50%

• Reappointment of the Auditors

• Noting the Accounts

• Remove a Trustee (subject to

statutory procedures)

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One - Trustees

Trustees

• Terminology – Trustees are normally Directors of a charitable company

• Responsible for management and day to day running

• May delegate tasks subject to supervision (if articles allow)

• Exercise the powers of the Charity

• Comply with statutory duties

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One - Trustees

Trustees Decision Making

• In a meeting decisions are normally taken by a majority vote

• Decisions can also be taken by written resolution, the articles normally

require all of the Trustees to sign the resolution

• Decisions may be taken by other means as provided for in the articles

including by electronic means

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One - Typical Decisions

Members’ Decisions

• Amendment to the Articles of

Association

• Change of Charity name

• Removal of Trustees (subject to

some Companies Act

formalities)

Trustees’ Decisions

• Whether to enter into certain

contracts

• Whether to employ certain

persons

• Whether to make grants

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Two –Articles of Association

Memorandum or Articles?

• Changes under the 2006 Act

• Provisions of an existing memorandum (including the objects) are now

provisions of the Charity’s articles

• Charities are not required to amend their articles to reflect this change, but

they may do this if they wish.

• If they wish to amend their memorandum in the future they may do so by

amending their articles.

• If on amending articles, the provisions of the memorandum are not

incorporated, ensure they are attached to the back of the articles, otherwise

may be deemed to no longer apply

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Two – Articles

Important aspects of your Articles

Objects

– These are the Charity’s charitable purposes

– The Charity must not act outside of its objects

Powers

– The powers sets out how the Charity may achieve its objects and

should not ideally be included in the objects clause

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Two – Articles


Members

– How members are appointed and removed

– Is there a requirement to hold an AGM each year, if so how much notice and how often

– Notice period for other meetings

– Quorum for Member’s meetings

– How a meeting may be requisitioned by the Members

– Who will be the chairman

– Notice period for proxy votes

– How may a poll be demanded

– Note that in relation to Member’s written resolutions, they will be deemed passed once have

requisite majority even if articles requires all Members to sign

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Two – Articles


Trustees

– How Trustees are appointed and removed

– Minimum and maximum number of Trustees, and special offices

– Retirement by rotation

– Notice period for meetings and the power to requisition a meeting

– Quorum for Trustee’s meetings

– Who will be the chairman and does the chairman have a casting vote

– Can decisions be taken electronically and should they be taken unanimously

– Procedure where there are conflicts

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Three - Company Secretary’s Role

Role of the Company Secretary

• Do you need a Company Secretary?

• Who can be a Company Secretary?

• Duties of Company Secretary

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Do you need a Company Secretary?

• No legal requirement to have a company secretary in law, unless yourarticles require one

• If you do not officially appoint someone as company secretary atCompanies House then someone else nominated by the Trusteesneeds to carry out the duties.

• Trustees are responsible to Companies House in the absence of aformally appointed company secretary

• Under company law a natural person or corporate body may be acompany secretary


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Duties of Company Secretary

• The Companies Act does not set out the roles, duties or responsibilities

of a company secretary

• Generally a company secretary will be responsible for:

Sending notices of Trustees’ and Members’ meetings

Preparing the agenda for Trustees’ and Members’ meetings

Ensuring that Trustees’ and Members’ meetings are carried out

properly

Writing up the minutes (statutory requirement)

Updating and maintaining company books

Filing relevant forms at Companies House


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Responsibilities of Company Secretary

Be clear what is expected of you – will depend on internal

arrangements within your charity

Four – Forms

Purpose Form No.

Change of Accounting Reference Date AA01

Appointment of Director / Corporate Director AP01 / AP02

Appointment of Secretary / Corporate Secretary AP03 / AP04

Annual Return AR01

Change of Director’s Details /Corporate Director’s Details CH01 / CH02

Change of Secretary’s Details / Corporate Secretary’s Details CH03 / CH04

Termination of appointment of Director TM01

Termination of appointment of Secretary TM02

Companies House Forms

Forms can be downloaded from Companies House at the following link:

www.companieshouse.gov.uk/forms/formsOnline.shtml

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Four – Registers

COMPANY REGISTERS

• Requirement to keep company books at the registered office or Single

Alternative Inspection Location (SAIL) address.

• Company books include the following registers:

register of members;

register of directors;

register of charges;

register of directors’ residential addresses;

register of secretaries, if appropriate; and

other registers, if appropriate (including register of mortgages & register of

debentures).

• All registers are public, bar residential addresses

• Registers may be held electronically

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Four – WebFiling

WEBFILING

• Most CH filing can be completed online using their WebFiling system.

• You will need to register by following the instructions at the following link:

ewf.companieshouse.gov.uk/

• Simple 2-step registration process to apply for a Security Code (sent to you

by email) and Authentication Code (sent by post to the registered office

address)

• Authentication code = existing Company’s signature

• PROOF - PROtected Online Filing – prevents the filing of certain paper forms

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Alexandra Whittaker

Senior Associate Solicitor – Charity

Tel: 01225 326767

Email: [email protected]

Caroline Leviss

Senior Associate Solicitor – Corporate and Commercial

Tel: 01225 326796

Email: [email protected]

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