Why Do We Need a Company Secretary in Malaysia?
Roles & Duties
A company secretary assists the company in achieving compliance with various statutory requirement, including the preparing and submitting of statutory returns with the companies commission of Malaysia. He or she also assists in the preparing and filling of Annual Returns of a company to the Companies Commission of Malaysia (SSM).
A company secretary is actually involved in assisting the company to become compliant right from the point of incorporation. They help the company prepare the incorporation documents as required by the Companies Commission of Malaysia.
A look at the broad functions of the company secretary gives a good idea why it is absolutely important to get a company secretary during the entire lifespan of a company in Malaysia. Here are some of the roles and duties of a company secretary.
- The primary duties of a Company Secretary is to safeguard and protect the interest of the company in matters pertaining to all legal, statutory, administrative and other policy matters of the company.
- A company secretary ensures that there is compliance when appointing directors by ensuring proper compliance to procedure for the appointment of directors. He also assists the induction of the directors and including assessing the precise training needed by directors and the executive management. He also gives comprehensive practical support and guidance to directors and non- executive directors.
- A company secretary ensures the company is always compliant with all relevant statutory and regulatory requirements as they change and how the impact matters pertaining to the specific business interests of the company.
- The company secretary assists in making compliant decision making and crafting of corporate strategies by ensuring that the board’s decisions and instructions are appropriately communicated to the relevant staff and all shareholders of the company.
- A Company Secretary is the primary point of contact for institutional like the Companies Commission of Malaysia, as well as other shareholders.
- A company secretary ensures that a company’s interests are protected when there are undertakings like corporate acquisitions, disposals and mergers. The company secretary ensures there is effective documentation, due diligence disclosures, proper commercial evaluation prior to completion of a transaction, and the timely execution of documentation etc.
Who Can Be Appointed As A Company Secretary?
The qualifications for a Malaysia certified company secretary are set out by the Companies Act 2016. Some of these requirements are:
- Be a member of a professional body or any other body prescribed by the Malaysia Ministry of Trade. Company secretaries can be a professional drawn from these bodies:
- A Chartered Accountant registered under Malaysian Institute of Accountants (MIA)
- A Chartered Secretary registered Malaysian Institute of Chartered Secretaries and Administrators (MAICSA)
- A Licensed Secretary licensed by Company Commission of Malaysia to be company secretary)
- A Lawyer registered with Malaysian Bar, or appropriate authorities.
- A person has to obtain a license from the Companies Commission of Malaysia (CCM) that was also known as Registrar of Companies ROC). Any person practicing without a license is liable to prosecution and a penalty not exceeding Five Thousand Ringgit.
- The name of the person proposed for the position of company secretary should be included at the point of submitting incorporation documents to the Registrar of Companies, also known as Suruhanjaya Syarikat Malaysia (SSM). If this is not done, the company must do so within 30 days of receiving the Certificate of Incorporation.
How Is A Company Secretary Appointed?
- At the point of company incorporation in Malaysia, the first company secretary shall be named in the Articles of Association. When this is done, the appointment is effective from the date of incorporation.
- Any subsequent appointment of a company secretary apart from first secretary will be done by the board which only requires formal board resolution.
- The appointment of the company secretary is recorded on Form 49 which is filed with the Registrar of Companies within 30 days of receiving the Certificate of Incorporation.
- The Registrar of Companies shall enter the details of the Company secretary register book of the company.
Companies with larger operations may need more than one company secretary. The Companies Act allows the appointment of more than one company secretary. Large companies that have other branches across the globe can register several company secretaries for easier handling of legal matters across borders.
Conclusions on the need for a company secretary
- A company secretary can quicken the process of a company incorporation.
- A company secretary ensures all-time compliance with different regulations that touch the company’s matters. This is important as the business environment is fluid and the company may be caught unawares and unprepared by laws that would have disastrous bearing on the company.
- The interests of the company and the board of directors are always protected as the company secretary ensures that these parties are not exposed to liability when operating in Malaysia