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Why Do We Need a Certified Company Secretary?

Any investor who wants to incorporate a company in Malaysia must know that the Companies Act 2016 requires every company, private or public to have at least one company secretary. This is a requirement that must be fulfilled within 30 days of the company receiving its Certificate of Incorporation.

Many medium and large companies in Malaysia have in-house legal departments which report to the company secretary. However, smaller private (Sdn Bhd) companies rarely have the resources to maintain full-fledged legal departments. Hiring corporate secretarial services becomes the best option in order to comply with the Companies Act.

Either way, a company secretary is much needed and indispensable in running the affairs of a company. Broadly, the company secretary is mandated to look after and conduct all legal and procedural matters of the company as required by the Companies Act 2016, and all other applicable laws that may fall under the purview of a Company Secretary.

The roles and duties of a Malaysian company secretary can also be seen in the broad categories which fall under his or her office:

Role In Company Incorporation

Foreign investors wishing to do business in Malaysia are best advised to open a private limited company. This company incorporation in Malaysia is under the Companies Commission of Malaysia (SSM).

The procedures for company incorporation require that the incorporation documents be handled by a licensed company secretary. The company secretary ensures that all documents are verified and accurate before submission to the SSM.

The company secretary prepares the Articles of Association as well as the Memorandum of Association to ensure that all statutory details are captured. He or she also takes the directors through the process of declaration for avoidance of conflict of interest as well as compliance with the Companies Act on directorship.

Advisory role on Compliance with Statutory Requirements and

  • The company secretary has the imperative duty to ensure that the company in Malaysia is always compliant with legislation outlined in Companies Act 2016 at all times. In this role he or she acts as the official contact point for communication, preparation and submission of Statutory Returns between the company and the Suruhanjaya Syarikat Malaysia (SSM), which is the Registrar of Companies.
  • File all the company’s statutory information and fully document as required in the appropriate forms and lodged with the registrar of Companies within the required period of time.
  • Advise the board of directors on when to hold the company’s meetings including the  annual general meeting as required by the law.

Role In Company Meetings

A Malaysia Certified Company Secretary has the duty of preparing for the company meetings as well attending the meetings to record Boards and Members’ Resolutions. With regards to these meetings, the company secretary has the role and duties of:

  • Attending company board meetings and advising the board on various matters touching on legal compliance and corporate governance
  • Acting as a link between the shareholders and the company. In this regard, he or she prepares and reads important documents and puts out information during the Annual General Meeting or Extraordinary general Meetings. This information is included in notices (circular resolutions), annual reports and other publications needed by the shareholders. The company secretary communicates dates for these meetings to shareholders, as agreed by the board of directors.
  • Ensuring that the annual returns as passed during the Annual General Meeting, and lodging these returns with the Malaysian company registrar, and do it in time set by the Companies Act 2016.

Role In Keeping Company Books & Documents

The statutory books and documents of a company are kept by the company secretary. He or she is expected to keep all statutory books right from the time the company is incorporation in Malaysia. These books include Register of Directors, Register of Members, and the Company Certificate etc.

These books must be updated, accurate and secured from tampering. The company secretary is responsible for security and accuracy of all company documents including share certificates, meeting minutes, memorandum and article of associations and other crucial documents.

Qualifications Of A Company Secretary

The Companies Act sets out guidelines that should be used when appointing a company secretary. It should not be forgotten that a company secretary is an officer of that company and an advisor to the board. The desirable qualities of the company secretary include:

  • Be well familiarised and have an understanding of the provisions of the Memorandum and Articles of Association of the company.
  • Be conversant and in compliance with the different statutory and regulatory bodies.
  • Ensuring correct procedures are followed and adhered to it in accordance with the Company’s Memorandum and Articles of Association (M&A) and the Companies Act, 2016.
  • Advise the board and ensure the interests of the board and the company are always taken care of.
  • A person to be appointed to the position of company secretary must be at least 18 years old, the person should have a residence in Malaysia.
  • The appointee must be either a member of a professional body approved by the Ministry, or a licensed secretary granted by the SSM Malaysia (Companies Commission of Malaysia, CCM) as per section 139 of the Companies Act.
  • The person must not be bankrupt or convicted of any offence in or outside Malaysia under Section 130 (1) of the Companies Act.

Prescribed Bodies

The Companies Act allows company secretary appointees to come from prescribed bodies recognized by Malaysian Ministry of Trade. These bodies are:

  1. The Malaysian Association of the Institute of Chartered Secretaries and Administrators (MAICSA)
  2. Malaysian Association of Certified Public Accountants (MACPA)
  3. Malaysian Association of Company Secretaries (MACS)
  4. The Malaysian Law Bar
  5. The Advocates’ Association of Sarawak
  6. The Malaysian Institute of Accountants (MIA)
  7. The Sabah Law Association

It is absolutely important that a company in Malaysia appoint and maintain a company secretary. Failure to do so would be a breach of the law. It would also expose the company to numerous legal liabilities due to non-compliance on issues like filing of annual returns.  Compliance with the law is of utmost importance that touches on the company’s existence.