Company Secretary – Role and Duties
The Company Law in Singapore mandates that every company must appoint a Company Secretary. The Company Secretary is responsible for ensuring that the company complies with the relevant legislations and regulations. The Secretary also keeps the Board Members informed of their legal responsibilities towards the company. The Company Law defines the legal framework within which the Secretary and the directors must operate.
The Company Secretary is the compliance officer of the company. The Board, as well as the Chairman rely on the Company Secretary to advise them about their duties under the law, the corporate governance requirements, compliance with the listing rules and in conducting the legally required meetings in a timely and appropriate manner.
This article will highlight the statutory requirement to appoint a Company Secretary and the overall responsibilities of the Secretary. It will further discuss the duties of Company Secretary as a corporate professional and the importance of the Secretary’s role in an organization.
Section 88 of the Companies (Amendment) Act 2014 states that every company in Singapore must appoint one or more Company Secretaries. The Company Secretary must be:
- A Natural person. and
- Resident of Singapore.
This section also states that the directors of a company, when appointing a Secretary must ensure that the Secretary has the requisite experience, academic and professional qualifications.
A company cannot appoint a person as a Company Secretary if that person has a debarment order against him or her by the Registrar, on the date of appointment. The Registrar can debar a Secretary who is in default of any of the relevant sections of the Act.
A company cannot appoint a director as a Company Secretary if he or she is the sole director of the organization.
The office of the Secretary must not be left vacant for more than 6 months at any time. Most founders will appoint a Company Secretary at the same time when incorporating their company.
Duties of a Company Secretary
The Company law in Singapore vests specific duties with the Company Secretary. Following are the main duties of a Company Secretary, including their administrative and statutory duties.
MAINTENANCE OF STATUTORY REGISTERS
The Company Secretary has to maintain and update the statutory registers such as the register of substantial shareholders, register of charges, register of members etc. as prescribed by the law.
CUSTODY OF THE COMPANY SEAL
The Company Secretary has to keep the company seal under their safe custody and also use it on documents when required.
NOTICE AND AGENDA OF MEETINGS
The Company Secretary has to send the notices of the meetings to the members and shareholders. The Secretary must also prepare the agenda and organize these meetings.
FOLLOW THE CONSTITUTION OF THE COMPANY
The Company Secretary has to ensure that the company and its directors abide by the rules set out by the Constitution of the Company at all times.
PREPARATION OF ACCOUNTS
The Company Secretary has to ensure that the accounts of the company are prepared as per the Company Law provisions. Once prepared, the Secretary has to file these statements with the Registrar.
IDENTITY OF THE COMPANY
The Company Secretary has to ensure that the company’s name and entity number are stated on all the notices, business letters and other official correspondences.
FILING OF STATUTORY FORMS WITH THE REGISTRAR
The Company Secretary has to file necessary returns and forms with the Registrar within the specified timeline. The filing of returns and forms such as Annual Returns, return of allotment of shares and notice of appointment or resignation of a director are also the responsibilities of the Company Secretary.
PREPARATION OF THE MINUTES OF MEETINGS
The Company Secretary is required to prepare the minutes of meetings, which are records that the company has to maintain as per the law. These minutes form a part of the company records.
INSURANCE FOR THE COMPANY
It is the duty of the Company Secretary to ensure that an adequate insurance cover is in place for the company, directors, officers and the office and staff.
EVENT BASED COMPLIANCE
Besides the annual compliances and general duties of a Company Secretary, their duties require them to file documents with authorities in the following situations:
- Change of the registered office of the company
- Appointing a new director or resignation of an old director
- Amendment to the Constitution of the Company
- Change of Company Name
- Charge creation
- Increase or decrease of share capital
Besides complying with the company law requirements, the Company Secretary also carries out the following duties:
- Assists the chairman to convene the meetings of the company and makes arrangements for these meetings.
- Advises the directors in carrying out their statutory duties in a timely manner.
- Performs necessary functions which relate to shareholders and debenture holders. These functions include issuing share certificates, inviting applicants for subscription, handling the transfer process and ensuring timely payment of dividend.
- Handles the correspondence between the shareholders and the company. The company also imposes a specific duty on the Secretary not to disclose any confidential information of the company to any of the shareholders.
- Allows the members, shareholders and other people to inspect the statutory registers unless the law prohibits it.
- Ensures transparency and accountability in the functioning of the company.
- Acts as a liaison between the Board on one hand and the shareholders on the other.
- Acts as the officer in charge of the entire secretarial work of the company.
- Overlooks the administrative functions of the company.
The duties of a Secretary also depend on the specific employment contract that he or she has with the Company and other duties may be added to the role. Furthermore, the responsibility of the Company Secretary depends upon his or her professional qualifications and experience. For example, a Secretary that has an accounting experience may also look after corporate finance and internal audit matters of the company. If legally trained, the Secretary can assist the company in the drafting of contracts and litigation matters.
Importance of the Role
The role of a Company Secretary has undergone a drastic change over the years. The position of a Company Secretary in an organization is a legal requirement. It also helps promote good corporate governance in the company. The following relationships of a Company Secretary highlight the importance of this role to the organization:
BOARD OF DIRECTORS
The Secretary is an advisor to the directors. The appointment of new directors on the Board is managed by the Secretary. The Secretary provides necessary guidance to the Board of Directors regarding their duties and helps facilitate board meetings.
It is the responsibility of the Company Secretary to ensure that the company is compliant with all relevant company laws. The Secretary provides guidance to the company on business ethics as well as corporate governance.
The shareholders of the company approach the Secretary as their first point of contact. This is because the Secretary is close to the Board of Directors and can assure the shareholders that the Board will discuss the matter in the next meeting.
To be a successful Company Secretary and ensure the efficient running of the company, the Secretary must possess the following:
- The Secretary must be able to make quick decisions as per the changing business environment.
- A sense of fairness should be an inherent quality of a Company Secretary.
- He or she should be aware of the latest developments of the legislations with respect to the company.
The Monetary Authority of Singapore, through its Code of Corporate Governance, states that the company must define the role of the Secretary clearly. As per the code, the Secretary has to ensure the compliance of laws and regulations and be present at all the board meetings to advise the Board on governance matters.
Company Secretary as a Fiduciary
As an officer appointed in a fiduciary capacity, the Company Secretary must always keep the following in mind:
- The personal interest of the Company Secretary must not clash with those of the company.
- The Company Secretary must not act beyond the authority provided by law.
- The Company Secretary must carry his duties with care and diligence.
- The Company Secretary must not make any secret profit in the course of carrying out his or her functions.
- The Secretary must not reveal confidential information or trade secrets learned during the employment period.
- The Company Secretary can be held liable in case of negligence or breach of duties.
NoteThe definition of an “officer” as per the Companies Act includes a Secretary of the company. The Secretary being an officer of the company will be liable in certain circumstances where the company fails to comply with the laws.
When incorporating a company in Singapore, the appointment of the Company Secretary is an important step. The directors of a company must keep the company compliant with the company law. By choosing the right Company Secretary they can ensure that this function is performed professionally. If a company uses a professional services firm for the incorporation of the company, very often that firm appoints one of its employees as a Company Secretary. For this reason, it is all the more important that you choose a reputable corporate services firm for your initial incorporation.