Glossary term
Corporate Secretarial Compliance
Subject: Legal, Tax and Reporting, Corporate Secretarial and Company Law
Also known as: Company law compliance, Companies Act compliance, Statutory compliance (company law)
Corporate secretarial compliance is the work of meeting the duties that company law places on a company, such as holding meetings, keeping registers and filing returns on time.
Explanation
Every incorporated company owes its legal system a steady stream of formalities. It must hold board and shareholder meetings with proper notice, keep minutes, maintain statutory registers, file annual returns and accounts, report changes in directors or share capital, and obtain approvals for certain transactions. The company secretary, or an outside firm, normally runs a compliance calendar to track the deadlines. The rules come from the national companies statute and, for listed firms, stock exchange requirements as well. Missing a filing often brings late fees, and repeated lapses can lead to fines for the company and its officers, or removal from the register of companies. The function is administrative in form, yet it is how a company proves it exists lawfully and that its decisions were validly taken. Banks and investors often ask to see it during due diligence.
Example
A holding company has twelve subsidiaries across three countries. Its company secretary keeps a calendar showing each entity's annual meeting date, accounts filing deadline and director changes. When one subsidiary's return is two weeks late, the team files it with a fee and records the reason in the compliance report to the board.