Who are Irish company officers?
Irish company officers are the Directors of the Company and the Company Secretary.
The officers in a company have obligations under of the Companies Acts.
Those obligations are different for Directors and Secretaries.
The Director’s duties are owed under both statute and common law. The key duties of Directors are confined within Part 5 of the Companies Act 2014 (as amended). The Directors are entrusted with the duty, power and responsibility of managing the affairs of the company.
They owe a fiduciary duty to the company. This duty involves acting in:
- Good faith;
- Honestly and responsibly;
- And in accordance with the company’s constitution.
Qualification for Appointment as a Director
- Cannot be under the age of eighteen (18); (Section 131)
- Cannot be a body corporate; (Section 130)
- Cannot be an undischarged bankrupt; (Section 132)
- Cannot be a Director of more than 25 companies unless they are exempt; (Section 142)
- Cannot be disqualified. (Chapter 4 Part 14 Companies Act 2014)
A minimum of two Directors and one Company Secretary for all companies except Private Limited Companies by Shares as they can have one Director, if so desired.
Disqualification of a Director
Directors can be restricted or disqualified from acting as an officer to a company by the High Court or a Director may undertake to accept restriction or disqualification by the Corporate Enforcement Authority.
The Companies Act 2014 (as amended) states that in order for a restricted Director to act in relation to a company, the allotted share capital of nominal value must not be less than €500,000 in the case of a public limited company or public unlimited company. In the case of any other company type it must not be less than €100,000.
Restrictions can last for 5 years. There can be different periods set for disqualification, but the normal period of disqualification would be 5 years also. Restriction can be made in relation to an insolvent company unless the Court is satisfied that the person acted responsibly and honestly in relation to the conduct of the affairs of the company or has co-operated with the liquidator in relation to the conduct of the winding up of the company or if it is just and equitable in the eyes of the court that the restriction is not made.
In circumstances if a director breaches their fiduciary duty to the company they can be liable to account to the company for any gain which they make, directly or indirectly, from the breach of duty. They can also be required to indemnify the company for any loss or damage resulting from their breach of duty. A Director who authorises restricted activity i.e. loan, credit transactions etc. can also be liable to account or to jointly and severally indemnify along with any other persons who authorised such transactions.
Where relief is sought in civil proceedings if the Court is satisfied that the Director has acted honestly and reasonably and having regard to the circumstances of the case ought fairly to be excused for the wrong concerned.
It will be presumed that the Director enabled the default by the company if they were aware basic facts concerning the default. To rebut this presumption it must be shown that the defendant took all reasonable steps to prevent it, or it was beyond the defendant’s control to prevent the default.
Qualifications of a Company Secretary
The Directors must, under Section 129 of the Companies Act, ensure that the person appointed to such a position has the skills and knowledge to discharge their statutory and legal duty and such duties delegated by the Directors.
The Directors must take all reasonable steps to ensure that the Company Secretary is able to carry out the function of their role. They should:
- They should have held such position three years out of the five years preceding their appointment; or
- Is a member of a body for the time being recognised by the Minister for Business, Enterprise & Innovation; or
- Is a person by virtue of their holding or having held any other position or by being a member of any other body appears to the Directors to be capable of discharging their duties.
Company Secretary Duties
The main duties of a Company Secretary are administrative rather than managerial, they are the principal legal administrative and compliance officer within the company and have no decision-making power. It is worth noting that a Company Secretary can be one of the Directors in the company and can be a body corporate (i.e. accounting or solicitor firms)
The specific duties of a company secretary are:
- Filing Documentation at the CRO;
- Maintaining the statutory registers and minute books i.e. Register of Members, Directors and Secretaries, Director’s and Secretaires interests in Shares and Debentures;
- Convening annual and emergency general meetings of members laying down the necessary notice requirements.
- Ensuring that statutory forms are completed and filed on time in the CRO;
- Delivering to the CRO copies of resolutions passed by the company;
- Supplying a copy of the company’s financial statements to every member of the company, every debenture holder and every person who is entitled to receive notice of general meetings (21 clear day notice requirement);
- Keeping, arranging and entering minutes of Directors’ meeting and general meetings;
- Ensuring that those entitled to do so may inspect company records;
- Safekeeping, custody and use of the company seal;
- Ensuring that company complies with its obligation to publish its name (paint/affix name outside of every business office);
- Ensuring that particulars relating to Directors are shown on all business letters of the company.
Company Secretary LiabilityAs a Company Secretary is an officer of the company they can be criminalised for default by a company. Any officer of the company who is in default shall also be liable to a fine or a penalty. They will be presumed to have enabled the default by the company if they were aware basic facts concerning the default, in order to rebut this presumption, it must be shown that the defendant took all reasonable steps to prevent, or it was beyond the defendant’s control to prevent the default.
Company officers are Directors and Company Secretary. Their roles are divided but are crucial. Directors manage the day-to-day running of the company and Company Secretary roles are administrative. Both officers play a crucial role within a company and uphold their responsibilities.