Why Do I Need To Appoint a Corporate Secretary

The Accounting and Corporate Regulatory Authority mandates that every company incorporated in Singapore must fulfill the statutory requirement of appointing a company secretary within 6 months from the date of its incorporation.

The company secretary must reside in Singapore and will be the primary officer responsible for several administrative and reporting functions as stipulated under Section 171 of the Companies Act. Some of these core responsibilities include filing of the company’s annual returns, share transfers, registration of members, and recording and filing of board resolutions among others.

While the Companies Act outlines the legal framework within which the secretary and the directors must operate, it is the sole responsibility of the secretary to support the company directors in ensuring that the company complies with all the existing regulations.

This article highlights the statutory requirement for the appointment of a corporate secretary and the various, roles, and duties of the secretary.

The company’s board of directors will be tasked with the appointment of a company secretary.

According to Section 171 (1AA) of the Companies Act, The candidate selected for the job must be

1. A natural person
2. A resident of Singapore

This means that the secretary must be an individual human being residing permanently within the jurisprudence of the Republic of Singapore. This includes the citizens of Singapore, Permanent Residents and EntrePass holders.

For private companies, any qualified candidate with a SingPass and resides permanently in Singapore can be appointed to the position of a cooperate secretary. However, a company, which has just one director or shareholder, cannot appoint him or her as the position of company secretary.

The section also states that the company secretary can be appointed through a resolution passed by the company directors. The company directors will not, however, appoint a person into the position of company secretary if the individual has a debarment order issued by the Registrar, on the date of appointment.

The section further highlights that at no one time should the office of the company secretary be left vacant for a period exceeding 6 months.

Every company that is registered in Singapore must meet certain requirements in law when appointing their company secretary. The Singapore Companies Act requires that for an individual to be appointed as a company secretary, he or she must satisfy at least one of the following requirements:

• Be conversant with company laws and regulations of Singapore. 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 filling agent.
• Be a public accountant that is registered under the Accountants Act.
• Meet the standards stipulated within Legal Profession Act.
• Be a registered member of a professional body such as the Certified Public Accountants of Singapore, Singapore Association of the Institute of Chartered Secretaries and Administrators, Association of International Accountants or the ICA (Institute of Company Accountants).

The Company law in Singapore confers specific roles and responsibilities to the corporate secretary.

Due to the extensive scope of their jobs, company secretaries find themselves undertaking numerous roles within the company. Here is a list that highlights the various roles of cooperate secretaries in Singapore.

Administrative role

Company secretaries are the primary officers tasked with several administrative roles within the company. Some of the administrative roles include those of ensuring that the company files its annual returns on time, meets the set deadlines, and complies with any ACRA related regulations. The company secretaries extend their administrative duties by maintaining and managing company shares and the share register. This allows the directors to shift their focus into other functions in the company.

Advisory role

Given their extensive knowledge of the legal and compliance frameworks, corporate secretaries form a crucial addition to the company’s human resource.

First, they identify the need for certain actions, formulate strategies, and communicate with the directors and the shareholders for final decision making.

Secondly, they process the changes in compliance with the Laws of Singapore. Some of these actions may include company constitution amendments’, change in company name, appointment or resignation of the secretary, and other special resolutions.

Lastly, the top management rely on the secretary to offer practical support in the running of the company. This is not limited to ensuring that new directors are welcomed accordingly according to the Companies Act and the company’s constitution.

Fiduciary role

Company secretaries bear the fiduciary role to always act in good faith and serve in the best interests of the company.

This involves him or her:

• Refraining from disclosure of information that might lead to potential conflicts of interest.
• Not acting beyond the authority provided by the law.
• Must not, in the course of carrying out their functions make any secret profit.

Updating and filing with ACRA

The company secretary is tasked with:

• Filing of the company’s annual returns on time.
• Updating particulars of directors including appointment, resignation, or demise of company officials.
• Filing share allotments and transfers.
• Filing changes in company name or any amendments made in the company’s constitution.

Maintenance and updating of statutory registers

The company secretary must ensure that the following registers are up to date. The most common include the:

• Register of directors.
• Register of members.
• Register of secretaries.
• Register of share allotment among others.
• The secretary also maintains the minute’s book (AGM’s and EGM’s) and the annual company accounts report book.

Organization of board meetings and AGMs

The company secretary is required to:

• Prepare and attend board meetings.
• Advise the directors on the agenda to be discussed in the meeting.
• Prepare the minutes of the company and maintain the records as required by the law. The minutes form a part of the company records.
• Hand out the company’s financial reports.
• Monitor the movement of shareholders.
• Maintain reminders for filing deadlines.
• Prepare director’s resolutions.

Other responsibilities

• Custody of the company seal – He or she has to ensure the safekeeping and proper use of the company’s seal.
• Company insurance – The company secretary has to ensure that the company has an adequate insurance cover.
• Maintain shareholder relations – The secretary bears the duty to handle correspondence between the company and the shareholders. However, he or she cannot reveal any confidential material or information to any of the shareholders.
• Maintaining a registered office – Every company established in Singapore must have a registered address. The address must be indicated on all legal documents pertaining to the company and must be registered with ACRA. It is the secretary’s role to ensure that these directives are achieved.

While the responsibilities of the secretary are well laid under the Singapore Company Law, other duties may be added to the role depending on the specific employment contract. In addition, the responsibilities may be dependent upon the professional qualifications and experience of the secretary.

Since company secretaries are also subjects to their respective company’s constitution as well as the Companies Act, breach or negligence of their fiduciary duties can result to severe consequences’ to the company and its directors, including imprisonment, significant fines or removal of the secretary from office.

In the event that the company secretary chooses to resign, the following actions must be taken by the company.

• The outgoing cooperate secretary must submit a resignation letter to the board of directors.
• The board of directors must pass a board resolution agreeing to the resignation of the company secretary.
• Within 14 days of resignation, the company must then file a cessation of company secretary with ACRA.

Sometimes the company may decide to remove the company secretary from office. The company will normally request the secretary to resign, however, if he or she refuses to cooperate, the company might be opted to forcibly evict him from office.

Generally, the secretary can be removed from office through a board resolution. Once the resolution is passed, a cessation of company secretary must be filed with ACRA within a period of 14 days.

From advisory roles to company compliance, the role of a co-operate secretary is paramount for the continued business excellence. Therefore, ensuring that you get a competent and trustworthy candidate is vital since mistakes arising from this position can be quite costly. The directors, by choosing the right company secretary can ensure that the company is compliant with the laws and regulations of the governing institutions of Singapore.

Timcole is one of the leading company incorporation and accounting firm based in Singapore. Our wide range of professional services serve as a one-stop solution for your business, offering you the most affordable price for services conducted with the highest level of excellency.

Contact us to find out more on how we can help you with your company today.