Why You Need To Appoint A Corporate Secretary

 

 

The Accounting and Corporate Regulatory Authority (ACRA), requires a company to appoint a corporate secretary is within the first six months of the incorporation of a company, or they will be dealt a penalty fee of up to $1,000. Besides the requirement of the ACRA, a corporate secretary is almost a ‘must’ in most cases, with several key responsibilities and tasks they’re entrusted with. From ensuring all critical decisions are finalized to efficient communication throughout the organization, a company secretary is essential in the clockwork functioning of a corporation. 

We’re here to break down the need for a corporate secretary and the crucial roles they play within a company’s system.

 

Corporate Secretary Appointment Provisions

In Singapore, the appointment of a corporate secretary is governed by the Companies Acts, which sets out the requirements for who can be appointed as a company secretary and the responsibilities they must fulfil. According to the Act, the appointed secretary ought to be a Natural Person and a resident of Singapore.

The company’s board of directors appoints the corporate secretary. The board can appoint or remove the corporate secretary at any time, subject to the provisions of the company and other applicable laws. If a company has only one shareholder or director, they cannot be assigned the corporate secretary role. 

If the Registrar has issued the candidate a debarment order on the day of the appointment, the position will be withheld, and the individual will not be appointed. If the company secretary resigns or is dismissed by the board of directors, the role must be reassigned within six months.

 

Qualifications Of A Corporate Secretary

For a very meticulous and intensive job, standards and qualifications should be fulfilled by an individual to be entrusted with the role of a company secretary. To be appointed as a corporate secretary according to the Singapore Companies Act, the candidate should meet one of the following conditions:

– Well-versed with Singapore’s corporation regulations and laws. The candidate must have a minimum of three to five years of experience for him or her to be appointed as a secretary in a public company. ACRA defines this person as a qualified individual or a registered filing agent.

– A registered public accountant under the Accountants Act

– Conform with requirements as stipulated-by the Legal Profession Act

– Registered as a member of a professional accountancy body such as the Association of International Accountants and the Singapore Association of the Institute of Chartered Secretaries and Administrators

Many company secretaries in Singapore have a background in law, accounting, or business and may have a professional qualification in one of these areas. For example, they may be a qualified lawyer, a chartered accountant, or hold a business degree. Therefore, for anyone looking to apply for a company secretary role, it would bolster confidence should they attain these qualifications to prove their capabilities.

 

Corporate Secretary: Responsibilities and Roles

A company secretary tackles many different roles and is expected to fulfil all of them with due diligence. A few roles are noteworthy and more or less tell the story of the position.

 

Administrative

The administrative role of a company secretary varies depending on the size and complexity of the company, but generally, the company secretary is responsible for a wide range of administrative tasks. These may include:

– Maintaining the company’s statutory records and registers, including the register of registrable controllers, register of members, the register of directors and secretary, and the minute book

– Issuing share certificates and maintaining the register of members

– Arranging and attending meetings of the board of directors and committees and preparing and distributing agendas, papers, and minutes

– Filing the company’s annual return with the Accounting and Corporate Regulatory Authority (ACRA) on a timely manner

– Maintaining the company’s statutory books and records, including the company’s constitution and any resolutions passed by the board of directors

– Assisting with the preparation of the company’s management accounts and financial statements

– Handling correspondence and communications with shareholders, regulators, and other stakeholders

The company secretary is also typically responsible for ensuring that the company complies with all legal and regulatory requirements and advising the board of directors on their legal and regulatory obligations. With most of the administration taken care of, the board of directors can funnel more time and resources into other company functionalities.

Advisory

In addition to their administrative responsibilities, the company secretary also plays an advisory role concerning the company’s corporate governance processes; this may include:

– Advising the board of directors on their legal and regulatory obligations and ensuring that they are aware of any changes to the law that may affect the company

– Assisting the board in developing and implementing policies and procedures to ensure that the company is run in an ethical and transparent manner

– Guidance toward best practices in relation to corporate governance and risk management

– Finalize decision-making by communicating with both directors and shareholders

– Advising the board on the management and control of the company’s financial and other resources

– Assisting the board in developing and implementing strategies for the company’s long-term success

The company secretary’s advisory role is important, as they are responsible for ensuring that the company is run in a way that is compliant with all relevant laws and regulations and that they are consistent with the highest standards in corporate governance.

Fiduciary

A company secretary must act with integrity, honesty, and good faith in carrying out their duties and responsibilities. They must also exercise due care, skill, and diligence in carrying out their duties and ensure that the company’s assets are used in a way that is consistent with the company’s best interests.

In addition to these general duties, they are to:

– Refrain from disclosing any information that could potentially lead to a clash of interests

– Act within the boundaries of authority allocated by law

– Not make any unaccounted profit when performing their tasks and responsibilities

The fiduciary role helps ensure the company is run in a way that is consistent with the interests of the company and its shareholders to help protect its reputation and ensure its long-term success.

 

Other Responsibilities

Corporate secretaries should also always be in possession of the company’s seal and ensure it’s only used when required or to prevent any false approval of documents. Aside from that, they also affirm sufficient insurance coverage over the company and verify that all company legal documents are indicated with the correct company address and registered under the ACRA.

Most responsibilities of a corporate secretary will have already been stated under the Companies Act, but further work can be designated according to the agreement between the secretary and the company prior to appointment. Duties can also be subject to change should the corporate secretary not be able to perform them satisfactorily.

Resignation Of A Corporate Secretary

In the case where a company secretary wishes to resign, there are procedures in place that the company should regulate:

– A resignation letter by the company secretary should be submitted to the board of directors

– An ordinary resolution by the board of directors agreeing to the resignation 

– Filing a cessation of corporate secretary with the ACRA within two weeks of the resignation.

It is also important to note that the change of company secretary should be recorded in the submission of the annual return form.

 

Importance Of Company Secretaries

Company secretaries play a vital role in ensuring that companies are run ethically and transparently and comply with all legal and regulatory requirements. They are responsible for managing the company’s corporate governance processes and ensuring that its board of directors is informed of its legal and regulatory obligations.

Across the many different roles they play, and the efficiency they always have to be working hand-in-hand with the board of directors and shareholders, it is safe to say that the position is most suitable for a corporate service provider such as One Tax CM Pte Ltd. The corporate secretary role takes up drastic amounts of time and energy but is essential in keeping the company functioning and working like a well-oiled engine. Without a corporate secretary, there will always be a deficiency in the workings of a corporation. Having them be mandatory tells the story in itself.