‘A [company] secretary is a mere servant; his position is that he is to do what he is told, and no person can assume that he has any authority to represent anything at all.’ Lord Esher in Barnett, Hoares & Co. v. The South London Tramways Company  18 Q.B.D (AC)
‘[company secretaries’] pivotal position at the heart of the boardroom gives them a unique perspective on how boards are responding to external pressures such as political and market conditions, as well as how they are tackling key governance issues such as board diversity, stakeholder engagement and risk.’ Peter Swabey FCG introducing the FTSE 350 Boardroom Bellweather (report of the Corporate Governance Institute, 2021).
Critically examine the extent to which the role of the company secretary today has evolved to reflect the ‘pivotal position’ referred to above with reference to academic and professional commentary.
You are the company secretary of Bauhinia Brewers Ltd, (“Bauhinia”) whose business is a micro-brewery supplying bars and restaurants in Yorkshire. Bauhinia was incorporated 8 years ago by three friends, Vijay Mild, Barry Bitter and Mary Stout. Bauhinia has opted to keep its statutory books at the public central register at Companies House. The current directors and shareholders are as follows:
Vijay Mild (chair)
|Type of share||Shareholder||Number of shares held|
The company number: 98798753
The registered office: 1 Huddersfield Street, Huddersfield, Yorkshire
The accounting reference date: 31 December.
a) Due to the ever-increasing popularity of craft beers, Bauhinia has done well and has spare capital to invest. The directors and shareholders are all in agreement that the logical next step for Bauhinia would be to open its own bar through which it could sell its beers. However, as a safeguard, it is intended that a new and separate company will be used to undertake this venture so that Bauhinia will not be at risk if the venture is unsuccessful. The new company will be wholly owned by Bauhinia.
Assuming Bauhinia decides to purchase a shelf company which has adopted the Model Articles for Private Companies Limited by Shares, prepare a plan of the first board minutes of the shelf company, which should address the transfer of the subscriber share to Bauhinia, resignation and appointment of new directors (being the current Bauhinia directors) and a company secretary (Pamela Keen), change of the registered office and accounting reference date (all to be the same as for the Company) and change of the name to Craft Bar Ltd. The plan should reference all actions that need to be taken after the meeting, including filing of forms, updating of statutory registers and any other appropriate actions.
b) Having set up Craft Bar Ltd the business wishes to appoint two further directors who will run the business day to day. It is decided to appoint Carla Lager and Mandy Shandy as they know the Bauhinia business as shareholders and Carla has some past experience running bars. However, both are now in established jobs in large companies and they are not willing to leave them and commit to the directorships unless they are awarded service contracts which can only be terminated on 6 months notice given on or after two years. Separately, suitable premises have been identified for a bar. They are owned by a company in which Vijay Mild holds 15% of the shares and his wife 10% of the shares. The asking price for the property is £230,000.
You are asked by the directors of Bauhinia / Craft Bar Ltd to advise whether they can approve the director appointments and property purchase in a board meeting of Craft Bar Ltd or whether any other steps are necessary. Prepare a summary note answering their query and explaining the key steps required and why they are required. Identify any relevant sections of the Companies Act 2006 (note: you are not expected to address employment law or conveyancing aspects).
a) After ten more years of trading Bauhinia Brewers Ltd has expanded massively and has very substantial brewing sales as well as a number of subsidiaries operating a chain of bars and restaurants in most major cities in the UK. The company is also highly profitable. The directors still work day-to-day in the business overseeing brewing operations and managing all the details of the subsidiary operations. Their approach is to keep their overheads and head office staff to an absolute minimum and as key shareholders the directors have enjoyed close control of the business. However, the board still has ambitions, including for international expansion and are wondering about trying to list the company on the London Main Market. They would initially seek a standard listing but with an ambition to seek a premium listing as soon as possible. None of the directors knows much about what is involved.
Prepare a note for the board highlighting the main pros and cons of listing including an outline of the process and requirements for admission and the implications for reporting requirements and management of the business. Cover both standard and premium listing.
END OF PAPER
. Kindly make reference to the following materials:
1. UK Companies Act 2006
2. ICSA UK , The Chartered Governance Institute (CGI)- Guidance Note on Minute Taking
3. Company Compliance and Administration Text book by ICSA UK, The Chartered Governance Institute
- Companies (Company Records) Regulations 2008 SI 2008/3006
5. Lexis PSL, In-house Advisor, Company secretarial resources, Accounts and reports