How to Manage Your Own Company Secretarial File [Guide for Small Business Owners].

I often get asked by business owners why accountants charge them for simply forwarding the ASIC company statement once a year.

My answer to this question is that:

  1. your accountant is probably offering their premises as your company’s registered office; and

  2. there is administrative work involved in maintaining your company’s corporate secretarial file. This is an important aspect of running any company, even though sometimes you may not see the value in it.

I’ve seen accountants charge anywhere from $100 all the way to $500+ for these types of services. It’s not my place to say whether these charges are justified. Instead, I’m going to provide company directors with an alternative.

I’m going to show you how to manage your corporate secretarial file yourself.

If you’re the type of business owner who doesn’t mind partaking in a little bit of paper pushing on occasion, please read on.

In this post I’m going to show you how to:

  • Identify what your company secretarial file contains.
  • Keep your company secretarial file up to date.
  • Notify ASIC of changes to your company.

I’m even going to give you the template documents you need to:

  • Evidence key company decisions
  • Appoint or remove a company director
  • Appoint or remove a company secretary
  • Declare solvency
  • Change a company’s registered address

Before we get started, it’s important to understand that updating your company secretarial file is a three step process.

  1. Identify where a change to your company’s details will occur;
  2. Make sure that the right documentation is kept on your company secretarial file to properly evidence this change; and
  3. Notify ASIC within 28 days of any change.

For many small companies with a simple ownership and control structure, doing the above will probably take you less than 1 hour per year.

[Note: this information has been prepared for the benefit of small proprietary companies that are not required to prepare and lodge financial reports with ASIC and that do not have complex ownership or control structures.

It provided for general informational purposes only and is not designed to be a substitute for professional advice tailored to your company’s specific needs. In providing this general information we are not, and are not purporting to be, legal practitioners.]


Company officeholders – a primer

Before we get down to the nitty gritty, it’s important to understand what role company directors and secretaries have in the administration of a company.

A proprietary company, regardless of size, requires at least one director.

A secretary may also be appointed - however it is not a requirement for running a proprietary company. In practice, it is common for the company secretary to be one of the directors.

The directors of a proprietary company have the ultimate responsibility for ensuring proper management of the company's secretarial matters. These matters include (but are not limited to):

  • Checking the ASIC annual company statement and pay annual fee;
  • Keeping appropriate company minutes or resolutions recording company business;
  • Ensuring proper financial records are maintained;
  • Ensuring compliance with the company constitution / shareholder’s agreement; and
  • Notifying ASIC of changes to company details.

While it is ultimately the directors' responsibility for proper management of the company, it is important to note that a company's secretary (if appointed) can also be subject to civil penalties or disqualification where ASIC is not advised of changes to company details within the required timeframe.


Company secretarial file – what’s inside?

I think it would be safe to assume that your company’s secretarial file was handed to you by your accountant or lawyer and promptly filed into the ‘very important, but will never look at again’ storage box (along with birth certificates, university degrees etc.).

However, if you do want to maintain your own company secretarial file, it’s important to know exactly what’s inside. So, let’s dust the file off and take a look inside.

The documents you’re likely to come across in a company secretarial file include:

  • Company constitution
  • Register of members / options / debentures
  • Share certificates
  • Consent forms for company office holders
  • Consent forms for shareholders
  • Company minutes recording decisions made by the directors and shareholders
  • Shareholders agreement (if any)



Now that you have a better idea about what’s inside a company secretarial file, let’s move on to how you can keep it updated.


What changes could occur during the year that would trigger a need to update your company’s secretarial file?


1. Receipt of ASIC annual company statement

The most frequently encountered event in the corporate secretarial calendar is receipt of the ASIC annual company statement.

Why?

Well for many small proprietary companies, checking, paying and filing this document may be the ONLY company secretarial task that they will need to undertake for the year.

Directors should check the details on their company’s statement and then pay the annual review fee to ASIC. At this time, the directors should also prepare and sign a solvency resolution on behalf of the company.

A question I often get asked is whether this solvency resolution is a requirement or whether it’s an unnecessary (and often costly) extra bit of paperwork. The answer is a definite YES.

While it is true that if the directors pass a positive solvency resolution (i.e. they believe the company is solvent) and pay the company review fee, no documentation needs to be sent to ASIC - a signed minute evidencing the resolution should always be kept on the company secretarial file!

You can download draft documents to pass a solvency resolution for free HERE.


2. Change to company officeholders

Appointment of director

For a company to appoint a director, the individual to be appointed first needs to provide a signed consent to the company.

Once the signed consent has been received, a members resolution should be passed formally appointing the director to the company.

Once the resolution has been passed, notification should be provided to ASIC within 28 days of the appointment by way of a Form 484.

You can download draft documents to appoint a director for free HERE.

Appointment of secretary

For a company to appoint a shareholder, the individual that is to be appointed first needs to provide a signed consent to the company.

Once the signed consent has been received, a directors resolution should be passed formally appointing the officeholder to the company.

Notification should be provided to ASIC within 28 days of the appointment by way of a Form 484.

You can download draft documents to appoint a secretary for free HERE.

Resignation of director / secretary

When a director or secretary intends to vacate their position, the individual will first need to provide written notice to the company of their intention to vacate their position.

Once the written notice has been received, a directors resolution should be passed formally removing the officeholder.

Notification should be provided to ASIC within 28 days of the removal by way of a Form 484.

You can download draft documents to remove a director for free HERE.

You can download draft documents to remove a secretary for free HERE.

Change to personal details of director / secretary

If the name or residential address of a company officeholder has changed, notification should be provided to ASIC within 28 days by way of a Form 484.

No formal resolution is required.


3. Change to name or address of members (shareholders)

For proprietary companies, the member register contained within the company secretarial file should be updated to reflect any changes to the name or address of a shareholder.

Notification should be provided to ASIC within 28 days of the change by way of a Form 484.

No formal resolution is required.


4. Change to registered office or principal place of business

Unless the company is the occupier of its registered office, a signed consent from the occupier of the premises being used as the company’s registered office is required. This is most commonly required where the registered office of the company is an accountant, lawyer or family member’s address.

Once signed consent has been received from the occupier, a directors resolution should be passed confirming the change in registered office or principal place of business of the company.

Notification should be provided to ASIC within 28 days of the change by way of a Form 484.

You can download draft documents to change a company's registered office for free HERE.


5. Changes to shareholdings, share capital or share structure

Where there has been a change in your company's ownership, share capital or share structure, there could be significant tax (and commercial) implications to the company and its shareholders.

These types of transactions are something that a small business owner who is moonlighting as their company’s secretary should never attempt to navigate on their own.

It is crucial that you consult with your accountant or lawyer before attempting to prepare DIY documentation to reflect the change or to notify ASIC yourself.



Summary

The situations described in this guide comprise the majority of company secretarial actions required for small proprietary companies.

While managing your own company secretarial file can seem daunting - there are literally hundreds of possible company secretarial actions for proprietary companies - most of these would rarely be encountered for the majority of proprietary companies.

Remember, that for most small proprietary companies there will only be one company secretarial task that directors need to complete for the year – their company's annual statement and solvency resolution. Preparing these will take you less than an hour per year.


What tips do you have for managing your company’s secretarial file? Please share them with the sansdesk community in the comments.