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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience:  Solicitors 2 years plus PQE
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1. I would like to know the pros and cons of appointing a corporate

Resolved Question:

1. I would like to know the pros and cons of appointing a corporate entity vs. an individual, as company secretary in the UK.
2. We have a dormant company which is in plan for liquidation, what are the pros and cons of taking this company and appointing as corporate secretary vs. appointing a new entity as corporate secretary.
Many thanks
Sylvia
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. I am a company law expert. Before I way up the pros and cons - does the company need a secretary at all (under the articles of association or for administrative purposes)? Legally private limited companies are no longer required to appoint company secretaries.
Customer: replied 1 year ago.
Yes we have had a company secretary for many years, and understand the importance of having one.
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. Legally there is no real difference between having a person or a corporate entity. A secretary can accrue next to no personal liability for carrying out their role, so the risks are minimal. The main pro of having a corporate secretary is their actions as signatories and their attendance at meetings are done by the their authorized agents i.e the directors of the corporate secretary - this means you have fewer concerns about whether someone can actually turn up or not to a meeting. The disadvantage of having a corporate person is you are less likely to have one individual that is intimately involved with your business and the company affairs, a natural person is more likely to take a far more hands on role. I would also note that dependent on where your corporate secretary is based (if it is a professional body e.g an accountant) they are less likely to attend the meetings in person (in order to keep cost down) and will probably want to attend meetings electronically. Finally if you do use your accountant (for example) to provide the service, it is possible they may want an indemnity to protect against any claims made against the company officers. Can I assist any further? Kind regards AJ
Customer: replied 1 year ago.
Thank you for your email, so in your opinion there are no real differences and which one would you advise a company to use.
Also, You did not answer the second leg to my question.
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. My opinion would be that you should appoint someone that has the skill and availability to service your requirements - i.e understand your business and be available for meetings and to sign contracts. There is no real risk in using the dormant company - has the dormant company ever traded? Does it have any creditors? Also will the directors of the dormant company be available to carry out the secretarial function of the other company?
Customer: replied 1 year ago.
The dormant company used to exist as a service company but is now in the process of being voluntarily liquidated. There are no creditors and the accounts are being wound up. The question is, would be better to complete the liquidation of this dormant company; remove it from the liquidation process and use the company as the new corporate secretary or set up a new entity as a corporate secretary. the Directors of the dormant company would also be the directors of the new entity
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. If you were to do that, it would obviously save you the cost of going through the liquidation/dissolution - so there is an advantage to doing that. Otherwise the annual running costs of that company should be relatively small - would you only keep on one director? AJ
Customer: replied 1 year ago.
consideration should be had of tax and accounting implications ???
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. If the company is dormant, then presumably it has not traded recently - so what accounting transactions will it actually have? There should be none of any significance if the company is dormant? The same applies to its tax status.
Customer: replied 1 year ago.
Thank you, ***** ***** your experience, are there any other implications one should think about?
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. I would just make sure that the main company has updated and modern articles or association so that it can do things like hold meetings electronically and service notices by email. That way if the director of the corporate secretary is unavailable or out the country they can still attend important meetings. Kind regards AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience: Solicitors 2 years plus PQE
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Customer: replied 1 year ago.
thank you

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