The Role of the Company Secretary in Regulated Entities
What is a Company Secretary?
Who may be Appointed as a Company Secretary?
The Maltese Companies Act requires all companies to appoint as Company Secretary, a person who appears to have the requisite knowledge and experience to discharge the functions of a company secretary. Apart from the aforementioned, the Companies Act does not provide any specific criteria for eligibility.
On the other hand, it sets out certain disqualifications, providing that a company shall not appoint as Company Secretary, (i) a person interdicted, incapacitated or an undischarged bankrupt; (ii) a person convicted of an offense relating to money laundering, affecting public trust, theft, fraud or knowingly receiving property obtained by theft or fraud; (iii) a minor not emancipated to trade or (iv) a person who has been made subject to a disqualification order.
The Role of the Company Secretary
The Company Secretary’s Role in ordinary private limited liability companies usually consists of (i) drawing up and maintaining minute books and registers, (ii) organizing and ensuring proper notice of all meetings, (iii) authenticating company documents and (iv) preparing and delivering all returns and other documents required by the Registrar of Companies. Failure to carry out these duties can lead to significant penalties being imposed on the company itself, as well as personally on the person assuming the Company Secretary role.
Thus, it is crucial that the Board of Directors appoint a person that is familiar with the functions and duties of the Company Secretary are set out by Maltese Company Law.
What are Regulated Entities?
Regulated Entities are those entities which operate within a framework of specific regulations set out by the Maltese Financial Services Authority (MFSA) or other competent regulatory authorities. These entities mainly consist of public limited liability companies (“listed companies”) and other entities which require a licence or authorisation to operate (“licensed companies”), such as collective investment schemes (funds), banks and other payment institutions, businesses operating in gaming or blockchain, etc.
Extended Responsibilities of the Company Secretary in a Regulated Entity
The Regulatory Authorities’ ever-increasing demand for disclosure and reporting obligations, as well as the increased rate at which inspections are being conducted, necessitates that the books and minutes of the Regulated Entity are kept in a clear, detailed and pristine manner.
Thus, it is becoming ever more crucial that the person appointed as Company Secretary of a Regulated Entity is a person that possesses sufficient knowledge, experience and qualifications to understand the complex business transacted at General Meetings and Board Meetings of the Company, in order for such person to be able to reduce the discussions and decisions taken into clear and organised minutes.
For this reason, Regulated Entities are opting to appoint qualified professionals which, apart from possessing a basic understanding of Maltese Company Law, understand the business in which the regulated entity operates and are constantly keeping up to date with the development of legislation and regulatory requirements in that particular field.