What’s in this article
- Finding a company secretary that value adds to your business
- Legal Requirements appointing a company secretary
- What happens if I don’t have a company secretary?
- Procedure to appoint and remove a company secretary
- Powers of a company secretary
- Roles and responsibilities of a company secretary
- Duties of a company secretary
- Engaging your company secretary in Singapore
- FAQ
Good news – you’ve successfully registered your company in Singapore! What’s next?
Following your incorporation, the Company Law requires every company to appoint a company secretary in Singapore. This means that no matter which type of entity did you register with ACRA, you will need to engage a licensed company secretary to run your company’s compliance.
Finding a company secretary that value adds to your business
The reality is foreigners will need to engage a registered filing agent to register a company. This agent will usually be your company secretary.
Consider the following in selecting the right company secretary or service provider:
- Having a physical local presence in Singapore to aid communication between authorities
Offering local nominee directors with clean records
Established and experienced for good insight and foresight
- Resourceful, considering how quickly regulations are changing
As much as we want cost efficient, completely digitalised, and automated processes, the foundational procedures might not be ready for that. Here are instances where you’d really need to talk to someone and work closely with them:
Your bank account opening is no longer a simple procedure, and we explain why here
Applying for work visas in times of tightening or opening up regulations coupled with lower quotas, we go into this here
Legal Requirements Appointing a Singapore Company Secretary
Quoted from Section 171 (1AA) of the Singapore Companies Act and The Accounting and Corporate Regulatory Authority (ACRA), here are key takeaways:
1. It shall be the duty of the directors of a company to take all reasonable steps to secure that each secretary of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company.
2. A company must appoint a secretary within 6 months from its date of incorporation. A company secretary must be:
- A natural person;
- Local resident in Singapore (Singapore citizens, Singapore Permanent Residents (PR) and foreigners holding specific work visas).
3. Private limited companies need not appoint a professionally qualified secretary. Only public companies must appoint a professionally qualified secretary (e.g. lawyers, accountants and chartered secretaries).
4. Every company shall have one or more secretaries
Attention: The above 2 clauses allow persons who are not familiar with the Singapore Companies Act to act as company secretaries. Consequently, company secretary duties are not performed in entirety. Penalties incurred from late filing of AGMs and ARs, changes in company information are not updated in ACRA accordingly, proper registries are not maintained, etc.
- This might affect certain operational procedures like providing inaccurate information to banks when applying for loans.
- Thus, it is highly encouraged to hire a qualified service provider to act as the company secretary.
5. The position of company secretary must not be left vacant for more than 6 months.
6. Where a director is the sole director of a company, he shall not act or be appointed as the secretary of the company.
Legal Requirements appointing a company secretary
Quoted from Section 171 (1AA) of the Singapore Companies Act and The Accounting and Corporate Regulatory Authority (ACRA), here are key takeaways:
A. It shall be the duty of the directors of a company to take all reasonable steps to secure that each secretary of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company.
B. A company must appoint a secretary within 6 months from its incorporation date. A company secretary must be:
- A natural person;
- Locally resident in Singapore (Singapore citizens, Singapore Permanent Residents (PR) and foreigners holding specific work visas).
C. Private limited companies need not appoint a professionally qualified secretary. Only public companies must appoint a professionally qualified secretary (e.g. lawyers, accountants and chartered secretaries).
D. Every company shall have one or more secretaries
Attention: The above 2 clauses allows persons who are not familiar with the Singapore Companies Act to act as company secretaries. Consequently, company secretary duties are not performed in entirety. Penalties incurred from late filing of AGMs and ARs, changes in company information are not updated in ACRA accordingly, proper registries are not maintained etc.
- This might affect certain operational procedures like providing inaccurate information to banks when applying for loans.
- Thus, it is highly encouraged to hire a qualified service provider to act as the company secretary.
E. The position of company secretary must not be left vacant for more than 6 months.
F. Where a director is the sole director of a company, he shall not act or be appointed as the secretary of the company.
What happens if I don’t have a company secretary?
1. High possibility of enforcement actions due to late filing submissions
There will be late lodgement fee and court prosecution against companies and directors for annual return filing breaches. If the company has a history of not holding the Annual General Meeting (AGM) and not filing the annual return (AR) or compounded multiple breaches before, directors are prosecuted in court.
| Requirements | Type of Breach | Imposed against | Penalty |
|---|---|---|---|
| Section 197 | The AR is lodged late | Company | $300 with a minimum composition sum of $500 |
2. Other types of penalizing actions directors have high exposure to:
- Failing to provide updated information to stakeholders;
- Not calling for an extraordinary general meeting after the passage of any resolution etc
Procedure to Appoint and Remove a Company Secretary
Procedure to appoint a company secretary
Step 1: The secretary or secretaries shall be appointed by the directors
Step 2: Company secretary to complete Form 45B, a consent to act as a secretary.
Step 3: The company to file an appointment of company secretary with ACRA via BizFile
Procedure to remove a company secretary
Step 1: Resigning company secretary must submit a resignation letter.
Step 2: The board of directors must pass a board resolution accepting the resignation and removing the company secretary from their position.
Step 3: The company must file a cessation of company secretary with ACRA via BizFile within 14 days of the resignation.
Powers of a company secretary
The powers of the company secretary lies in their signature as certification of documents. Since the company secretary is recognised as the key person who maintains the records of the company, certification of company documents by the company secretary is generally accepted.
The powers are limited in a way that the company secretary’s signature can be replaced by other lawyers, accountants, or the company director. Otherwise, the certification procedure would require joint signatures of both director and company secretary.
Situations where a company secretary’s signature is required:
The bank would require a certified copy of the company’s resolution, usually jointly signed by a director and company secretary.
- Annual statutory audit
Auditors will request company secretaries to certify the records of a company’s minutes book for their annual statutory audits.
- Obtaining bank loans
Officers will require certification of company documents such as a constitution or resolution and affixing of the common seal.
Roles and responsibilities of a company secretary
The company secretary is an officer of the company, an advisor to the board, the main liaison between the shareholders and directors, and the main compliance officer.
1. Administrative role to the company
The is the primary role of a company secretary. As the critical business logic- contracting, clearing, settling, and record-keeping tasks that are foundational to all forms of business.
This includes the following:
- Ensuring company compliance with ACRA (board meetings, AGMs, EGMs, ARs, updated registries and company information, etc.)
Compliance with IRAS (stamp duties, tax filing deadlines etc.)
Administrative tasks from changes in shareholdings, directorship, company profile etc.
Some may provide assistance on operational matters like how to open a bank account, do you need a license to operate etc.
2. Advisory role to the directors
As a precursor to a company secretary’s administrative role, he/she advises company directors on how to fulfill their statutory duties and remain compliant with the Singapore Companies Act. This includes the following:
Providing guidance on proper corporate governance and ethical business practices
Advisory on directors duties in relation to financial reporting to ACRA
When to prepare for annual compliance filings (AGM, AR, Tax etc) to avoid late submission
How to introduce new directors and shareholders
3. Liaison-role to the shareholders
The company secretary is the first point of contact for shareholders who wish to communicate with the company and should maintain regular contact with the shareholders to ensure that their interests are heard by the board of directors.
4. Fiduciary role to the company
In the case of negligence or breach of fiduciary duties, the company secretary can be held liable. Serving in the best interest of the company, company secretaries are expected to:
- Ensure there is no conflict of interest with the company.
Not act beyond the authority provided by law.
Carry out their duties with care and diligence.
Not make any secret profit in the course of carrying out their functions.
Not reveal confidential information or trade secrets of the company.
Duties of a company secretary
Here is a non-exhaustive list of the duties of a company secretary:
- At least one of those secretaries shall be present at the registered office of the company by himself or his agent or clerk on the days and at the hours during which the registered office is to be accessible to the public.
ACRA related filings including filing notices of appointment, removal, and resignation of directors, CEOs, company secretary or auditors, preparing and filing annual return filings, filing changes in company name, share capital etc.
Maintaining statutory registers including register of, Substantial Shareholders, Company Charges, Directors, Secretaries, CEOs and Auditors, Nominee Directors, Directors’ Interests in Shares and Debentures, Controllers, Debenture Holders.
Annual general meetings, prepare and distribute necessary documents, prepare and distribute financial reports, record meeting minutes, prepare board resolutions, certify copies of minutes etc.
Other duties including ensuring the safe custody and proper use of the company seal, certifying true copies of documents etc.
Engaging your company secretary in Singapore
As outlined above, it’s clear that making the right choice for your company when it comes to company secretary is important. Choosing an ineffective and unreliable company secretary may cause blips in your business operations and potentially financial costs incurred for failing to comply to the latest regulations or filings.
FAQs
In Singapore, every company is legally obligated to have a company secretary. The decision about who is to be appointed as the company secretary is to be made by the board of directors.
Yes, both a Shareholder or a Director of a Company can be the Company Secretary. However, note that where a director is the sole director of a company, he shall not be the secretary of the company.
Yes, a PR is allowed to serve as a company secretary in Singapore.
No, unless your foreign company secretary is a natural person who is a local resident in Singapore.
Yes, with exceptions. Only foreigners with the following passes are allowed to serve as company secretary:
- Permanent resident of Singapore
- Entrepreneur Pass (EntrePass)
Tips: In certain cases, Employment Pass (EP) and Personalised Employment Pass (PEP) holders with a local residential address in Singapore can be considered a local resident.
Yes, the company owner can serve as the company secretary. However, the company owner should NOT be the only director.
Do note that you will still need a company secretary for any type of non-profit organizations and every company is obligated to appoint a secretary within 6 months after the incorporation.
