Wonder why you have to pay a monthly fee to appoint a company secretary? These are the 5 main responsibilities of a company secretary towards your Sdn Bhd.
If you have no experience in starting a company, you may wonder why do you have to pay a monthly fee to appoint a company secretary for your Sdn Bhd. Even though it is a requirement by the Companies Commission of Malaysia (SSM) for all companies to appoint a company secretary, the company secretary appointed does not seem to do much in contributing to the operation of the company. These are the 5 main responsibilities of a company secretary that you should know as a Sdn Bhd owner.
Although you can incorporate your Sdn Bhd through MyCoID portal on your own, engaging with an experienced company secretary can save quite some hassles on deciding a company name that is still available and preparing the information needed to ensure a smooth incorporation process. A digital company secretary even allows you to incorporate your Sdn Bhd fully online without having to meet up with a company secretary or to visit the SSM counter. A company secretary not only helps you with starting a company, but they also provide advice on procedures of striking off or winding up a company.
Unlike the old Company Act, the Company Acts 2016 has simpler compliance to follow for a Sdn Bhd. However, it is not the only law a Sdn Bhd needs to follow. There are other legal requirements that that should be fulfilled at all times such as taxes that should be paid, business licenses, employer's EPF, SOCSO, and EIS contribution, the employment law, etc.. A company secretary can advise and get you in touch with the relevant professionals to provide the necessary services. Hence, you can turn to your company secretary regarding any business-related laws and regulations that you are unsure of.
Although an Annual General Meeting (AGM) is no longer required for a Sdn Bhd, a company secretary is required to attend general meetings of directors and shareholders as requested by the company and take the meeting minutes. Meeting minutes will be signed off by the chairman of the meeting and board resolutions are prepared by the company secretary for decisions made. When a meeting is not required in order to make a decision, a company secretary prepares and distributes circular resolutions to the directors to be signed. A written resolution signed off by the director or company secretary is considered to be sufficient evidence of the passing of a company decision.
Company details such as directors, shareholders, paid-up capital, shares, and constitution could change from time to time as the company grows. A company secretary is responsible for notifying SSM on such changes and update all related company documents that are kept in the registered office. Other documents such as accounting records, financial statements, and legal instruments are also managed and kept at the registered office by the company secretary. A company secretary also prepares certified true copies (CTC) documents that are needed for opening a business bank account, loan application, and other official matters.
SSM requires a Sdn Bhd to lodge several mandatory reports each year - annual return and audited financial statements together with directors' reports. There are penalties for the company or the directors for failing to adhere to this requirement as stated in the Companies Act 2016. A company secretary advises the company to follow the deadlines as required.
An annual return is a summary of the company with information such as business nature, registered address, directors and shareholders, etc.. Even if there are no changes in this information after a year of operating the Sdn Bhd, a statement still has to be lodged to certify that there are no changes made.
It is the directors' duty to prepare financial statements of the year which are audited by a certified auditor before sending them to all shareholders of the company. Besides getting approval from the Board, the financial statements should have a directors' report attached, explaining information on the directors, main activities of the company, shares, dividends, business reviews, etc..
"[Company secretaries'] value and worth have to be redefined and due recognition is given to them for the enhanced profile they now have to assume," said Kulwant Kaur, technical director of MAICSA back in the year 2003. Not everyone can act as a company secretary. Besides fulfilling the requirement as stated under Section 235 of the Companies Act 2016, a company secretary needs to obtain a practising certificate that should be renewed every 3 years. Company secretaries are just like accountants, lawyers, and other professionals that provide essential services to assist your Sdn Bhd so that you can leave the important but time-consuming tasks to them and focus on your business. Hence, don't hesitate to ask your company secretary for advice if needed.
Disclaimer: Information provided in this article is for general reference only. Please seek advice from company secretary, lawyer or other professionals according to your business's needs.