If you've never started a business before, you may be wondering why you would need to pay a monthly fee to a company secretary for your Sdn Bhd. Firstly, it is a statutory requirement for all companies to appoint a company secretary as stated in the Companies Act 2016. Although the company secretary is not present on the ground-level of the company’s operations, the company secretary is considered to be an officer of the company who is advisory in nature, especially in corporate governance matters and boardroom procedures. These are the 8 main roles of a company secretary that helps you with your company’s legal compliance.
1. Advise on the registration and governance of the company
Engaging an experienced company secretary can save you the hassle of deciding on an available company name and preparing the information needed, ensuring a smooth company registration process. A company secretary not only helps you with starting a company, but they also provide advice on corporate restructuring, mergers, acquisitions, good corporate governance, and procedures of striking off or winding up a company. Here at Ashton, we handle the incorporation process of your company digitally and fully online, without having to meet up.
2. Ensure the company is compliant with laws and regulations
The company secretary is well versed with the Companies Act 2016, and is able to help you with compliance and governance of your Sdn Bhd in accordance to the law. This is not the only act that the Company Secretary is familiar with. There are other legal requirements that should be fulfilled by your business at all times such as taxes, business licenses, employer’s EPF, SOCSO, and EIS contribution, the employment law, etc. A company secretary will be able to advise you and connect you with relevant professionals should you require any of their services. You should always be able to turn to your company secretary regarding any business-related laws and regulations that you need help with.
3. Document meeting minutes and resolutions
A company secretary is required to attend Board Meetings and General Meetings and as requested, must prepare the agenda of the meeting, ensure that the meetings are properly called, constituted and carried out as per the law of meeting. The company secretary prepares the minutes of meetings and also follows up on any decision made during the meeting as instructed. Sometimes, extracts of resolutions that are decisions taken at meetings are prepared and certified as a true extract of the original meeting. The company secretary prepares and distributes circular resolutions to the directors to be signed if the board decides that a written resolution is sufficient. A written resolution signed off by the directors is considered to be sufficient evidence of the passing of a company decision.
4. Ensure company details are up to date
A company secretary is responsible for notifying the SSM of any changes in company details such as directors, shareholders, paid-up capital, shares, as well as update all related company documents that are kept in the registered office. Other documents such as the constitution, minute books, financial statements, meeting minutes, resolutions are also managed and kept at the registered office by the company secretary. Additionally, a company secretary certifies documents as true copies of the originals (CTCs) that are needed for official business matters.
5. Record the Financial Year End (FYE)
Financial Year End is the date when the company closes the financial accounts. It is usually the last day of a particular month that has been chosen. You should notify your company secretary of the FYE decided for your company as soon as possible.
6. Appoint auditor
An auditor has to be appointed by providing consent to act before they can provide auditing services to the company. There will be 30 days of vacant period each year after the FYE when a new auditor can be appointed. If there is no new auditor appointed during the vacant period, the previous auditor will be appointed automatically for the next financial year. If you wish to appoint a new auditor outside the vacant period, the resignation of the existing auditor has to be lodged to the SSM and the new auditor can be appointed after the existing auditor provides clearance to the company. However, you don’t have to appoint an auditor if your company falls under one of the following categories:
Dormant companies
Zero-revenues companies
Threshold-qualified companies
7. Verify the identity of directors and shareholders and lodge the declaration of beneficial ownership
Identity verification, also known as Know Your Customer (KYC), is an important process for the company secretary to ensure that all directors and shareholders are who they say they are. It can be done by meeting the directors and shareholders face to face or through e-KYC, before the company is incorporated or when a new director or shareholder is added to the company. Besides, the company secretary will obtain and maintain the records of the declaration of beneficial ownership upon receiving the information from directors and shareholders.
8. Lodge annual reports required by SSM
The SSM requires Sdn Bhd to lodge an annual return and audited financial statements together with directors’ reports each year. Failure to comply with this requirement can result in penalties for the company or the directors as stated in the Companies Act 2016. A company secretary ensures strict compliance with these datelines.
Prepare and lodge accurate Annual return
An annual return is a summary of the company with information such as business nature, registered address, directors and shareholders, etc. A statement still has to be lodged even if there are no changes in the information after a year of operating the Sdn Bhd. The company secretary is responsible for preparing the annual return and lodging it with SSM within the stipulated timeframe.
Lodging Financial statements with directors’ report
Financial statements are usually prepared by the accountants before being audited by a certified auditor. The auditor and the directors will prepare their report which explains information on the directors, main activities of the company, shares, dividends, business reviews, etc. These documents are then compiled and signed by the commissioner for oaths before being passed to the company secretary for circulation to shareholders and the auditor. Once it is approved by the board, the company secretary will be lodged to the SSM within 30 days after the circulation.
To conclude, a company secretary upholds a wide range of roles and responsibilities. As senior corporate officer of a company, the company secretary acts as the focal point for communication with the company’s main stakeholders such as the board of directors, shareholders, and senior management.
If you are thinking of starting your own business, talk to us today about setting up your Sdn. Bhd. company. We are a group of professional Company Secretaries who offer end-to-end business services and are more than happy to get in touch with you to answer your questions with no obligation at all! Call us today at 012-2297733 or email us at general@ashtoncorporate.com
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