Companies Act 2006 – CHAPTER 2
DERIVATIVE PROCEEDINGS IN SCOTLAND
505. Sections 265 to 269 seek to ensure maximum consistency between the position in
England and Wales and Northern Ireland and the position in Scotland (although the clauses
reflect the different procedural requirements which apply where proceedings are commenced
in the Scottish courts, in particular the fact that the leave of court must be obtained before
derivative proceedings may be raised). In view of this, they also put the rights of the member
to raise actions on behalf of the company on a statutory footing.
506. Section 265 differs from section 260 in its approach in that it confers the right to bring
the proceedings in the first place, and then, in the clauses which follow, regulate the
proceedings. (By contrast, the sections relating to proceedings in England and Wales and
Northern Ireland assume that there is already a right to bring such proceedings in England
and Wales and Northern Ireland; they therefore regulate the proceedings rather than confer
the right to bring them.)
507. Subsections (4) to (6) of section 268 confer on the Secretary of State a parallel power
to that in section 263 to make regulations with regard to the criteria to which the court must
have regard in determining whether to grant leave to continue a derivative claim and where
leave of the court must be refused.
PART 12: COMPANY SECRETARIES
Section 270: Private company not required to have secretary
508. This section replaces section 283(1) of the 1985 Act insofar as it applies to private
companies. It implements the CLR recommendation (Final Report, paragraph 4.7) that the
requirement for a private company to have a secretary be abolished. It defines a private
company “without a secretary” for the purposes of the Act as a company which has taken
advantage of the exemption provided by subsection (1) as opposed to one which normally has
a secretary but for some reason (for example the death of the office holder) is without a
secretary at a given time. Subsection (3) makes provision for private companies without a
secretary.
Section 271: Public company required to have secretary
509. This section replaces section 283(1) of the 1985 Act insofar as it applies to public
companies. It retains the requirement that a public company must have a secretary. The
secretary may also be one of the directors.
Section 272: Direction requiring public company to appoint secretary
510. This section is a new provision, enabling enforcement of the continuing requirement
for a public company to have a secretary. It does not apply to private companies. Where it
appears that a public company does not have a secretary, the Secretary of State may give a
direction to the company. The company must comply with the direction (by making the
appropriate appointment and giving notice of it) within the period specified in the direction.
The section provides for an offence for failure to comply with a direction.
Section 273: Qualifications of secretaries of public companies
511. This section updates section 286 of the 1985 Act. It makes it the duty of the directors
of a public company to ensure that the secretary has both the necessary knowledge and
experience and one of the qualifications listed in subsection (2). The qualifications specified
in this section are the same as in the 1985 Act except that:
• they do not include the qualification of having held the office of the company’s
secretary (or assistant or deputy secretary) on 22 December 1980;
• in subsection (3)(f), “Chartered Institute of Management Accountants” replaces
“Institute of Cost and Management Accountants” as the Institute changed its name in
1986.
There is no requirement for the company secretary to be a natural person. (Compare the
requirement in section 155 that a company must have at least one director who is a natural
person.)
Section 274: Discharge of functions where office vacant or secretary unable to act
512. This section replaces section 283(3) of the 1985 Act. It provides for the situation
where the office of secretary is vacant or there is no secretary capable of acting for any other
reason. In these circumstances, if the company has an assistant or deputy secretary, then that
person may fill the position of secretary; if not, any person authorised by the directors may do
so. This section differs from section 283(3) of the 1985 Act by permitting the directors to
authorise any person to act as secretary, rather than only an officer of the company.
Section 275: Duty to keep register of secretaries
513. This section replaces the requirement in section 288 of 1985 Act. It requires every
company to keep a register of its secretaries containing specified details. Subsection (3)
provides that the register must be kept available for inspection either at the company’s
registered office or at a place specified in regulations made under section 1136. Subsections
(5) to (8) retain the public right of inspection, sanctions and means of enforcement of the
right of inspection.
Section 276: Duty to notify registrar of changes
514. This section replaces the requirement in section 288(2) of the 1985 Act. It requires
notification to the registrar within 14 days of any change in the company’s secretary or any
change in the particulars contained in the register of secretaries. The consent of the person
having become a secretary or joint secretary of a company must accompany the notice. The
section retains the existing sanction and ensures that the public record is kept up to date as
regards the secretary of every company.
Section 277: Particulars of secretaries to be registered: individuals
515. This section replaces section 290 of the 1985 Act insofar as it applies to secretaries
who are individuals. It requires a company to enter in its register of secretaries the name and
address of any individual who is its secretary. The definition of name is the same as for
directors (see section 163): in particular, the register must include any name used or in use for
business purposes since the age of 16. The section retains an exception relating to the former
names of peers but, as recommended by the CLR, not that for the former names of married
women. The address to be registered is a service address: this implements the CLR
recommendation (Final Report, paragraph 11.46) that the requirement for home addresses for
company secretaries be abolished.
Section 278: Particulars of secretaries to be registered: corporate secretaries and firms
516. This section replaces section 290 of the 1985 Act insofar as it applies to secretaries
who are not individuals. It sets out the details which must be registered where the secretary of
a company is either a body corporate or a firm which is a legal person under the law by which
it is governed. The requirements that apply in the case of an EEA company follow the
recommendations of the CLR (Final Report, paragraph 11.39).
517. The section also makes provision about the details which must be registered where all
the partners in a firm are joint secretaries.
Section 279: Particulars of secretaries to be registered: power to make regulations
518. This section is a new provision. It provides a power for the Secretary of State to make
regulations that add or remove items from the particulars that have to be entered in a
company’s register of secretaries. A similar power is provided by section 166 for directors’
particulars.
Section 280: Acts done by person in dual capacity
519. This section replaces section 284 of the 1985 Act. It provides that where a provision
requires or authorises a thing to be done by or to both a director and a secretary of a company
it will not be not be satisfied if done by the same person acting in both capacities.
PART 13: RESOLUTIONS AND MEETINGS
520. The provisions in this Part replace most of Chapter 4 of Part 11 of the 1985 Act on
meetings and resolutions. The changes in the law derive principally from the CLR’s
consultation on “Company General Meetings and Shareholder Communications” and
recommendations from Chapters 2, 6 and 7 of their “Final Report”, together with two
subsequent consultations; the Modernising Company Law White Paper of July 2002 and the
Company Law Reform White Paper of March 2005.
521. In addition to implementing detailed policy changes, Part 13 implements two general
changes.
• First, the law makes the current “elective” regime the default for private companies.
This means, for instance, that private companies will no longer need to “elect” to
dispense with the Annual General Meeting (AGM): they will not be required to hold
an AGM in the first place.
• Second, the current law is drafted on the basis that the main way in which shareholder
decisions are taken is in general meetings. The new provisions proceed on the basis
that in future this will not be the case for many private companies. Private companies
will not be required in future to hold general meetings; instead provision is made for
new procedures for decisions to be taken by written resolution.
522. The law relating to decisions has been restated in a way that deals first with private
companies. Additional layers of requirements for public and quoted companies holding
general meetings follow in subsequent provisions. There are provisions at the end of the Part
about record keeping. In general, where this Part imposes an obligation or confers a power, it
will apply notwithstanding anything in the articles unless otherwise indicated.