Much like other professional service providers such as accountants and lawyers, the company secretary industry is competitive, with over 16,000 licensed company secretaries in Malaysia according to the SSM Annual Report 2017. Hence, appointing an experienced company secretary to take on various responsibilities for your company is crucial to ensure that your company’s governance is in order and in compliance with the Companies Act 2016. Here’s an overview of the process of appointing a new company secretary for your existing Sdn Bhd.
1. Provide essential information about your company.
Unlike an employee who is hired to carry out tasks as stated in the job description, an appointed company secretary is personally liable towards your company. Hence, they are required to carry out due diligence before making the decision of whether or not to be appointed as the company secretary of your company. The required documents might vary based on the company secretary’s request. These are some of the information and documents needed:
- Company name and registration number.
- The date of company incorporation.
- Name and contact information of your existing company secretary.
- Full name and identity number as stated in MyKad or passport, and contact details with the current residential address of all directors and shareholders.
- Proof of residency in Malaysia of directors in the form of tenancy agreement, sales and purchase agreement, or utilities bills under the directors’ name.
- Valid visa of at least 6 months if you are a foreign director residing in Malaysia.
It is ideal that your company has paid off compound if there is any, has filed Annual Return and Financial Statements accordingly in previous years, and the directors are not declared bankrupt.
2. Verify identity for directors and shareholders.
Identity verification, commonly known as KYC (Know Your Customer) among industries, is a mandatory step for the company secretary to ensure that the directors and shareholders are the people they claim to be. This is crucial to prevent fraud and falsification of identity.
Traditionally, it is done through an in-person appointment where the person comes to the office and presents his identity document such as an IC or passport. A digital company secretarial firm may carry out e-KYC for identity verification purposes of directors and shareholders using e-KYC software with the following combination of authentication factors:
- Document identification – Take a photo of your identity document through the e-KYC software
- Facial verification – Take a selfie through the e-KYC software
- Liveness verification – Record a video of yourself through the e-KYC software according to instructions
3. Confirm the appointment of the new company secretary and the resignation of the existing company secretary.
Once the company secretary has accepted the appointment to be the new company secretary of your company, they will send you and your existing company secretary a notice to confirm the appointment.
Depending on the terms of the appointment, there may be a notice period for the company secretary who resigns. Upon clearing all pending payment(s) to the existing company secretary, you may request for their resignation by issuing a termination letter. The existing company secretary will lodge their resignation and reassignment of the company secretary that indicates who will be the new company secretary to the SSM.
4. Sign the necessary board resolutions for the appointment and resignation.
The new company secretary will prepare some documents to be signed by directors regarding the decision of changing the company secretary. These can be signed electronically.
- Board resolution for the appointment of company secretary
- Board resolution for the acceptance of resignation or removal of the existing company secretary
5. Make payment for the monthly company secretarial fee.
Charges vary across different company secretarial firms. There may be a processing fee for the change of company secretary but most of the firms charge only the monthly company secretarial fee. This step may happen earlier or later depending on the payment term of the company secretarial firm.
6. Sign the board resolution for the change of registered address.
Once the SSM has approved the reassignment of the company secretary, your new company secretary will send you an email to confirm the change. Then, you will sign a board resolution for the change of registered address to change your registered office from the previous company secretary’s address to the current one. A registered office is the company secretary’s office where all official notices will be sent. Your previous company secretary will also hand over all the company documents to your new company secretary.
The process of changing the company secretary for your existing company is more complicated compared to incorporating a new company because there are existing company information that has to be updated and documents to be moved from the previous company secretary office to the current one. The entire process can take several weeks; hence, it is important to keep your statutory documents and company files in order to ensure a smooth company secretary appointment process.