How Secretaries Help Companies Ensure Regulatory Compliance
If you have recently incorporated a business in Singapore, one of the next essential steps you should take is to hire company secretary services. According to the Companies Act of 1967, new companies in Singapore are required to appoint a corporate secretary within six months of incorporation. This secretary must be a natural person and a resident of the country or at least a holder of an employment pass.
The position of company secretary cannot be left vacant for more than six months; otherwise, you or your company directors may incur a penalty of up to S$1,000. Singapore law views secretaries as one of the key officers of every company, mainly because secretaries are vested with an array of responsibilities, such as ensuring that their company remains compliant with regulatory requirements. Continue reading to learn more about how secretaries help businesses maintain compliance in Singapore.
The importance of having a company secretary for compliance
In Singapore, a corporate secretary acts as a company’s governance advisor and compliance officer. They are in charge of ensuring that the company complies with all relevant regulations and laws in the country. The critical role of a secretary includes:
- Establishing and maintaining the corporate records of a company.
- Verifying compliance with the Companies Act.
- Preparing and submitting annual returns to the proper authorities.
Company secretaries also advise senior executives and directors on corporate governance matters and keep account of any change in the regulatory environment that may impact the company. With all these essential duties, it is no wonder that the appointment of a company secretary is mandated by law – this is the primary reason foreign companies engage with corporate secretary services when incorporating a business in Singapore.
Essential services provided by company secretaries
In essence, the evolving role of a corporate secretary is crucial to ensuring that a company meets all its legal obligations and abides by the highest standards of corporate governance. A company secretary caters to a wide variety of compliance needs to make sure that a company does not violate any law or regulation. Here are some important compliance services provided by corporate secretaries:
- Drafting and re-evaluating the company’s Articles of Association, resolutions, shareholders’ agreements, and other documents in relation to corporate governance.
- Drafting, submitting, and updating corporate records like registers of members, secretaries, directors, and other officers.
- Arranging and organising statutory meetings, such as board meetings, Annual General Meetings (AGMs), and Extraordinary General Meetings (EGMs).
- Keep up-to-date on any changes in regulatory or legal requirements of companies.
- Giving advice on compliance issues that arise out of international or domestic law.
- Acquiring necessary governmental approvals.
- Assisting with dissolutions or mergers and acquisitions.
- Maintaining essential records and databases.
Penalties if a company does not appoint a corporate secretary
As mentioned earlier, an incorporated and registered company in Singapore cannot operate for more than six months without a secretary. If a company does not appoint a corporate secretary within the prescribed period, the Accounting and Regulatory Authority of Singapore (ACRA) may impose a fine of S$1,000. Furthermore, aside from this, there is also a high probability that the erring company will contravene many guidelines and miss deadlines, which can adversely impact its business.
Here are some common violations a company may incur because it has no corporate secretary:
- Failing to register an official address for their business.
- Forgetting to notify the ACRA registrar of any change in the company’s location and composition.
- Failing to publish the official name and registration number of the company.
- Missing deadlines for submitting the company’s annual returns.
- Failing to update the ACRA registrar of any change in directors and auditors.
All these violations, as well as those specified in the Companies Act, carry a penalty, which often involves huge sums. Some offences may even result in the closure of the business and possible imprisonment for culpable business owners or directors. Ultimately, beyond the bad reputation that the company may leave with the authorities, not having a competent corporate secretary can seriously negatively affect the business itself.
Several laws and regulations guide the establishment and operation of companies in the country, but without a dedicated and knowledgeable secretary to keep tabs on these laws, many businesses risk infringing them, albeit mostly unintentionally. Indeed, it is almost impossible to manage a company successfully without a corporate secretary. So, if you want your business to succeed while remaining compliant with all corporate laws and regulations in Singapore, be sure to appoint a reliable secretary immediately after incorporating your company.
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