Venturing into a new business by starting a company is not easy as you will have to juggle limited resources to ensure every penny is well spent. Company secretarial charges may be seen as a mandatory cost to a company, with the Companies Act 2016 requiring all Sdn Bhd to appoint a company secretary, but their value is often not well understood by business owners. Hence, most business owners tend to go for the cheaper option as the company secretary does not seem to play an important role in day-to-day business operations. Let's take a look at how company secretarial fees are charged in Malaysia.
Retainer fee versus subscription fee
The monthly retainer fee for company secretarial services in Malaysia ranges from as low as RM60 to as high as RM600 per month. This fee generally does not include any services provided by the company secretary of your company, aside from being compliant to the Companies Act 2016. Any other company secretarial services requested, like the filing of annual returns, would require additional payment to the company secretarial firm.
Another pricing model of a company secretarial firm is based on monthly subscription. A subscription fee is more commonly charged in the Software as a Service (SaaS) industry where you would enjoy a range of services for a fixed fee paid each month. While this pricing model is used in the digital company secretarial industry overseas, it is still relatively new in the Malaysian company secretarial landscape. Business owners in Malaysia are used to paying a low monthly retainer fee to the company secretary and getting invoices on any ad hoc company secretarial services done.
The norm of hidden fees
With a low monthly retainer fee, most company secretarial firms have to charge a higher fee for each service provided upon request, such as preparing company resolutions, providing certified true copies of statutory documents for the purposes of loan applications and opening business bank accounts, etc. Most company secretarial firms even include charges for emails, phone calls, and even for each document printed in the invoice issued.
It is true that there is a fee payable to the Companies Commission of Malaysia (SSM) for lodgements made with the SSM. Usually, company secretarial firms have to charge a service fee on top of the fee payable to the SSM, as stated in the official Table of Fees, to cover expenses and make up for the low monthly retainer fee.
A company secretary should be paid for their liability, not services
Business owners might have gotten used to the pay-per-service type of pricing model from a conventional company secretarial firm, but that might not be the best way to engage with a company secretary. Being an appointed company secretary to your company means they have the liability to ensure compliance to the laws and regulations of Malaysia at all times. They should be available for consultation when you have a question regarding the statutory compliance of your company. Hence, unlike an accountant or a lawyer, a company secretary should not be paid for each ad hoc service they provide, but for their role in providing good corporate governance and ensuring the statutory compliance of your company.
At first glance, it might seem expensive to pay a monthly subscription fee of RM200 instead of a retainer fee of RM60 to appoint a company secretary for your company. However, in the long run, this fixed monthly pricing not only allows you to plan your company's financials easily, but it also means that your company is in the safe hands of an experienced company secretary who is liable of ensuring your company's compliance to the laws and regulations under the SSM. Thus, understanding the roles of a company secretary is important for you to make the right choice as the business owner to engage a suitable company secretary for your company.