In Singapore, Section 171 of the Companies Act mandates every company to appoint at least one Corporate Secretary. We highlight the key responsibilities of the corporate secretary and how to choose the right one for your organization.
Who is a corporate secretary?
A Corporate Secretary is the governance officer of an organization responsible for ensuring its compliance to the legislation, rules, and regulations set by the authorities. In hiring secretaries, the board of directors is responsible for ensuring that the individuals have the required professional and academic knowledge as well as experience to perform their duties functionally.
A Corporate Secretary must ensure that the company is compliant to the regulatory and statutory requirements set by the Accounting and Corporate Regulatory Authority (ACRA) and the Companies Act. This entails matters related to annual returns, Annual General Meetings (AGM) as well as board meetings and minutes, and other administrative duties.
In Singapore, all companies are required to appoint a Corporate Secretary within 6 months from the incorporation date and the role shall not be left vacant for more than 6 months.
Key responsibilities of corporate secretary
Corporate secretary is considered the key personnel of a company to perform and uphold duties such as:
Liaison between the Board of Directors and the Shareholders
The corporate secretary will act as the first point of contact to convey the opinions, comments, and suggestions from the shareholders to the Board of Directors and vice versa on corporate governance to ensure that their concerns are addressed. He should also be responsive and follow up on any issues or solutions related to ACRA compliances or corporate governance.
Advise the Board of Directors on statutory compliances
The Corporate Secretary has to inform, remind and update the Board of Directors of any statutory requirements under the Companies Act and handle related documentations.
If there are any changes in the shareholders and management officials, for example, directors, CEO, managers or secretaries, and company structures, the Corporate Secretary is required to report and update the changes on various registers.
Role with legal compliance and preparation of necessary documentation
A Corporate Secretary has the obligation to inform any changes in the details of the company to ACRA. After receiving the board of director’s action plan, he or she has to prepare the necessary documentation based on the Singapore legal framework. Examples of changes that need to be reported are drafting resolutions, share transfers or allotments, and editing the Company Constitution.
Perform secretarial tasks
Secretarial tasks include organizing and facilitating board and committee meetings, preparing agenda and minutes of the meetings as well as handling other necessary paperwork.
Perform fiduciary duties in the best interest of the company
A corporate secretary should be unbiased and perform duties in the best interest of the company and its stakeholders. Should there be any misrepresentations, conflict of interest or malpractices in the company, the CS is required to inform and guide the related parties in accordance with the Companies Act.
Safeguard the Company Seal
Traditionally, a corporate secretary is in charge of the safekeeping of the common seal. He is authorized to use the common seal to execute official documents along with a company director.
However, as of March 2017, it is no longer mandatory for companies to use the common seal for executing documents.
It is common practice that companies engage professional companies such as accounting firms and corporate secretarial companies to provide secretarial services and undertake compliance work.
Under such an arrangement, the professional firm would enter into an agreement to provide secretarial service and permit their staff to be named as the client’s secretary at a retainer fee.
What to look for when choosing a Corporate Secretary for your company in Singapore?
Look out for the following criteria when appointing a Corporate Secretary or outsourcing the duties to an organisation:
Qualifications and background experience
To qualify as a Corporate Secretary for a private company, the individual must be a Singaporean, a permanent resident or an Employment Pass holder of Singapore and have the experience or knowledge to fulfill the required secretarial duties.
For a public company, the individual should also be a member of the Institute of Certified Public Accountants of Singapore (ICPAS), Chartered Accountant, Associate of Singapore Association of the Institute of Chartered Secretaries and Administrators, or have been practising as a corporate secretary for a minimum of 3 years of the 5 years immediately before the appointment as the secretary.
A director may also hold office as secretary unless such director is the sole director of the company.
Understanding of your requirements
Your chosen CS should have the ability to resonate with the company’s objectives, vision and mission while handling all matters related to law, corporate governance and statutory compliances.
He or she should work well with different teams or departments as well as board members, directors and stakeholders by providing timely professional suggestions and insights.
Working knowledge of automated compliance software
There are many automated compliance software in Singapore that the Corporate Secretaries can utilize to keep track of changing compliance obligations, regulator filings date and changes to share registers.
Some of the compliance software include:
- ProKorp – Automates all tasks to go paperless and comply with ACRA regulations.
- Singapore Secretarial Services Solutions by Orson – helps in automation of the legal entity.
- Bluemeg – the Global Entity Management & Governance SaaS provides services and solutions such as e-signing, compliance, CRM, accounting, government and registrations
Understanding the use of modern tools
There are some software solutions that can be useful for the corporate secretaries in terms of going paperless to cut cost, minimize errors and improve tasks completion time. The use of these modern tools are particularly relevant since ACRA has also digitized almost all of its operations:
- Boardfolio – allows digitization of board and committee meetings to streamline processes to reduce paperwork by accessing meetings agendas, minutes, and resolution online.
- Convene – virtual AGM is made possible by increasing participation and engagement from shareholders.
- SQL View – a Board Management Software that improves corporate governance related to board meetings; a Document Management System (DMS) helps to centralize and automate all important information of a company.
- BoardPac – a global board meeting solution that allows synchronization of data.
- Wealthworks+ – a flexible trust and corporate entity management software that keeps a company updated on the administrative and compliance of funds, trusts, partnerships, companies, foundations, estates, individuals and other complex structures of wealth.
Responsible, responsive and reliable
The CS should be responsible for handling all advisory, administrative and fiduciary matters of a company. He or she should be responsive to your request and can be relied upon to monitor all filing due dates and important deadlines for submission of documents to avoid any fines, penalties, prosecution or risk of losing reputation for the company.
Combination of skill sets
The CS should be diligent and meticulous to avoid making any mistakes in regards to submitting accurate information to the regulatory bodies.
He or she should also have good communication skills to be able to assess, judge, convey and receive information accurately, especially if there is any conflict of interests and issues involving the directors and stakeholders.
It is also imperative for the CS to understand the trend of the regulatory environment and have organizational knowledge to help the company in compliance and corporate governance matters.
Cost of services
The annual remuneration of a full time experienced Corporate Secretary with more than 10 years of experience would be starting from S$60,000. For companies who don’t have enough work to occupy a professional, this is a steep cost to bear.
The average mid sized corporate secretarial firms typically charge from S$500 to S$2,000 a year for the provision of routine corporate secretarial services. The price often depends on the scope of services included: a flat fee for routine responsibilities and additional charges for additional resolutions.
When surveying the prices of corporate secretarial services, there are some common questions that you could ask to determine if the corporate secretarial firm is suitable for your organisation. These include:
- What is the scope of work covered under the provision of corporate secretarial services?
- What is the range of fees for ad-hoc work not covered under the annual retainer fee? E.g Transfer of shares, dividend declaration, etc
- Are there any hidden costs such as deposit, termination fee, disbursements for printing, photocopying??
- Is there any yearly increase in charges?
A number of duties are placed upon the secretary. In many cases, such duties vary from compliance work to an advisory role, according to the size and complexity of the company and on the terms agreed between the secretary and the company.
The primary responsibility of the secretary is towards the directors but the company secretary is not to be regarded as their servant; he/she is an officer of the company under the Companies Act with considerable authority derived from the constitution and the Companies Act.
In this respect, he/she is personally liable for his/her actions, not least in regard to the statutory duties
and he/she will be liable to the penalties laid down in the Companies Act for an officer in default.
One of the best ways to choose the right corporate service provider is to rely on feedback from other customers or recommendations from close associates.