Can a Company Secretary Also Be a Director?

In a dynamic day and age, there are a lot of opportunities to combine roles or responsibilities within roles. A common question that many in the business world is whether a company secretary can also be a director. This article will explore whether the same person can do both roles and what the pros and cons of this would be.

Table of Contents

What is a company secretary?

A company secretary plays a vital role in the daily tasks of running a business. Being a company secretary demands someone to have advanced qualifications. Their tasks also include responsibilities such as taking care of select legal matters. They also must be at least 18 years old.

Typically, a company secretary is needed depending on the type of company. For example, it is mandatory for public companies to have a company secretary. Further, at least one of the secretaries must live in Australia. However, for private and/or proprietary companies, having a company secretary is not mandatory. The company may appoint one if they wish.

A company secretary’s roles and responsibilities are similar to that of a directors. Some of a secretary’s responsibilities include:

  • Drafting the minutes of meetings
  • Making sure the company is complying with all legal requirements
  • Adhering to company rules
  • Acting in good faith
  • Updating financial records
  • Ensuring good governance

This is not an exhaustive list of a secretary’s responsibilities however if you are wanting to find out more, click here.

What is a director?

A director of a company is someone who has been appointed to be ultimately responsible for the company’s decision making. Their responsibilities generally overlap with those of a secretary, however, they have a larger role in the company. Similar to secretaries, directors must be at least 18 years old and reside in Australia. Their responsibilities include:

  • Acting in good faith
  • Acting in the best interests of the company
  • Avoiding conflicts of interest
  • Exercising care and diligence in all their tasks
  • Following company’s constitution

If a director is in breach of their responsibilities under the Corporations Act 2001 (Cth), then they will be subject to penalties including imprisonment, monetary fines or both.

If you would like to know more about the similarities and differences between a company director and company secretary, click here.

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Can they be the same person?

So now we come to the main question at hand. Can they be the same person? Can a director and company secretary be the same person? The simple answer is yes. Yes, a company director can also be the company secretary. There aren’t any explicit or implicit prohibitions surrounding this. If a company director wishes to also be a company secretary, they may definitely appoint themselves. There will not be any penalties as long as they are registered and ASIC is aware of the situation. Both company secretaries and directors have duties that overlap more often than not. It can be the same person as long as the person fulfilling both roles’ obligations is doing so correctly.

What are the benefits?

  • Similar responsibilities
  • Legal obligations are the same
  • Less room for miscommunication
  • Both secretaries and directors must act in good faith and with care and diligence

What are the disadvantages?

Whilst there is much overlap between the two roles, both roles do have distinct and separate responsibilities. If both roles are done by the same person, this can create a huge burden on delivering responsibilities and obligations. Having the roles distinct and separate from each other is more beneficial than having the roles combined. Instead of one person focusing on both roles, there can be two separate people who are entirely focused on their own role and no one else’s.

Conclusion

Thus, a company director and company secretary have many similar and distinct responsibilities. A company secretary can also be a director as long as they fulfill the obligations and responsibilities required of both roles. There are many advantages and disadvantages of having the same person do both roles however ultimately it is the decision of the director and who they want to appoint. If you have any further inquiries, don’t hesitate to talk to a company lawyer.

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