If you’re planning to set up a company in Singapore, you should know that the Accounting and Corporate Regulatory Authority (ACRA) requires each firm to appoint a secretary within the first six months of incorporation. The primary role of a company secretary is to discharge various administrative and reporting duties as required under the law.
Two common duties of a company secretary include filing annual company returns and recording board resolutions.
The law provides that a company secretary must be an ordinary resident of Singapore, among other qualifications.
Qualifications of a Company Secretary (CS) in Singapore
Section 171 (1AA) of the Companies Act stipulates that for one to serve as a company secretary, the following requirements must be met:
- Must be a member of the Institute of Company Accountants Singapore
- Must be a member of the Institute of International Accountants
- Must be a member of the Institute of Certified Public Accountants of Singapore
- Has to be registered under Cap 2 of the Accountants Act
- Has to be a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators
- Must be qualified under Cap 161 of the Legal Profession Act
- Must have been in practice for a minimum of three of the past five years prior to the new appointment.
While the above requirements are strict when it comes to public companies, private companies have the option to appoint persons that are either as qualified or knowledgeable in the secretarial field.
As you are about to find out, company secretaries play pivotal roles in organizations. This is why it is extremely important for you to elect qualified and experienced persons.
Before highlighting some of the key roles played by corporate secretaries, here’s why appointing the right one is extremely crucial.
Why Select the right Corporate Secretary?
The roles played by company secretaries are provided for in the law, this means that going against any such prescriptions may result in breaking the law.
A secretarial firm helps you comply with all the rules and regulations relating to companies, cushion you against fines, penalties, and lawsuits.
They ensure that you stay up-to-date with any new and existing legal compliance requirements. This means that administrative and legal matters relating to your company can be well taken care of under one docket.
Failure to comply with the law is not only costly in monetary terms but also reputation-wise. You know what they say about business reputation – people do business with people they know, like, trust and value. So, if you lack any of these values either due to legal compliance issues, you may be putting your company at the risk of losing or missing out on business.
To sum it all up, below are the main roles played by corporate secretaries under the law.
Roles of a Company Secretary
In a typical company, corporate secretaries normally find themselves involved in a number of functions. We have tried to highlight every important role below, but we couldn’t possibly put every tiny detail therein. Feel free to visit our service page for a more elaborate description of the roles of a corporate secretary.
For easier digestion, we’ve categorized the functions into three.
One of the vital roles of a company secretary involves offering sound advice to companies. As mentioned earlier, these professionals possess a wide scope of knowledge in legal and compliance matters and they are better placed to guide companies in this respect.
In addition, they have a deep understanding of organizations’ internal governance. They coordinate and oversee among other things, communications between the company and shareholders, as well as formulate sound strategies to aid in decision-making.
But company secretaries are not only charged with external legal compliance matters. They are also responsible for strict abidance to the internal policies and as well as suggesting and implementing changes as may be deemed fit. Their professional advice ensures that companies remain compliant with all of Singapore’s new and existing regulations.
This is believed to be the core function of a company secretary and quite wide in scope.
As administrators, corporate secretaries ensure that their clients comply with all ACRA regulations relating to submissions and deadlines on matters to do with company annual returns, among other things.
It is essential to note that company secretaries are not a substitute for accountants. The two teams have clear and separate roles. While an accountant is in charge of all the technical work relating to the financials of a company, a secretary may be charged with the administrative part of such reports including timely submission to relevant parties.
For instance, all meetings relating to companies including the AGM where books of accountants are presented to shareholders are organized and coordinated by the CSs. The resulting resolutions which may include the following year’s targeted profits, dividends distribution and more are recorded and maintained by the corporate secretary.
But don’t get mixed up on this – a good number of people confuse the extent of the role of company secretaries. In fact, some believe they are in charge of office phone calls and general organization simply because of the word ‘secretary’ appears in their titles. The kind of secretary discussed here is more of a managerial role as opposed to a clerical or support one.
As a matter of fact, most Company Secretaries are attorneys, MBAs, as well as Certified/Chartered Accountants.
The truth is that a company secretary is always at the core of a company, ensuring that all legal aspects of company reporting as complied with in a timely manner.
The fiduciary role of CSs is perhaps one of the most unpopular among the three, but as you’re about to find out, it also plays a key role in a company.
As an implied rule, company secretaries are required by the law to act in the best interest of the company, including the shareholders, at all times.
In the event of a conflict of interest, malpractice, or misrepresentation, they are mandated to provide strict guidance in accordance with the company policies as well as any external requirements.
The secretarial firm must also ensure that they act within the confines of the company provisions. Speaking of provisions, it is important to point out that a company secretary, just like all other staff members, is subject to the constitution of the client company.
In conclusions, you can clearly see that a company secretary position is one of the most beneficial appointments in any organization. So, whether a company is of a foreign origin or not, engaging a resident corporate secretary will not only streamline operations for you but also save you tons of money in penalties and/or fines.
At Biz Atom, we offer specialized secretarial services for companies all over Singapore. With years of experience, we boast of some of the most qualified team members with industry experience to help you stay on track with new and existing legal compliance matters.