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The law recognizes registered companies as independent entities. According to the Singapore’s Companies Act, it is a basic requirement for every company to appoint a secretary who is required to be a resident of Singapore. The act, however, does not define the extent of company secretarial companies that may be offered to any company in Singapore. The basic responsibility of a company secretary remains to assist the company’s directors in ensuring the company complies with all regulatory obligations. The Act identifies the secretaries as a key resource to the directors in compliance and in such way may be held responsible in any event of failure.
Legal requirements in appointing a company secretarial
According to the Accounting and Corporate Regulatory Authority (ACRA), Singapore’s national regulator of public accountants and business entities, every company is required to appoint a company secretary within the first six months after its incorporation. To fit the position, the chosen candidate must be a resident of the country either by birth or acquired status. More to this, a sole director in the company is not a viable candidate for the position. However, if there are a number of directors in the company, the company secretary can be an appointee who is also a director.
Required qualifications for a company secretary
Qualifications required of any individual offering company secretarial services in Singapore are stipulated by the Companies Act, Section 171 (1AA). According to the Act, a suitable candidate must fulfill at least one of the following qualifications;
- Held a position of a company secretary for at least three years within a period of five years right before the appointment to a public company.
- Holds legal profession qualifications and registration as stipulated by the Legal Profession Act (Cap. 161).
- Be qualified and registered as a public accountant in accordance with the Accountants Act (Cap. 2)
- Be registered and active member of the Institute of Certified Public Accountants of Singapore.
- Be a registered member of the Singapore Association of the Institute of Chattered Secretaries and Administrators.
- Be a registered member of the Singapore Branch of the Association of International Accountants.
- A registered and active member of the Institute of Company Accountants in Singapore.
Appointment of the company secretary
In Singapore, it is the duty of the company’s board of directors to appoint the most effective company secretary. This is done in accordance with the laid rules and regulations of the company where the board also decides on the extent of duties and responsibilities accorded to the secretary. Some of the key consideration in the setting of the company secretary’s remuneration includes qualifications and experience among others.
Employing a company secretary or outsourcing of the services
Despite being a requirement for a company to have a secretary, it is not stipulated as to the terms under which one is engaged. For this reason, small and start-up companies may find it difficult to have a company secretary hired on a full-time basis. In such an event, sourcing for the services from independent services providers comes as a viable option. This not only provides an opportunity to enjoy the services at a reduced cost but as well, the cost of infrastructure to construct and equip a new office is also foregone. Independent company secretarial service providers are always available, provide with the service on contractual basis giving the company an opportunity to enjoy the quality and experienced services. However, a background check is important in selecting such a company to ensure it possesses the right qualifications and capacity to handle the desired responsibilities.
Expected roles of a company secretary
At the time of appointment, the ideal candidate must be in a position to fulfill the expected role within the company. The role of the secretary in this regard is to ensure the company abides by all the set legal obligations as well as ensuring the company affairs are run in accordance with the set rules. A company secretary is required to act at all times in the interest of the company and avoid conflicting interests with other parties. This is further extended to the directors who expect to be provided with timely information in regard to board meetings and the content to be discussed in such forums. It is the responsibility of the secretary to ensure that shareholders are informed of the annual general meeting and they are equipped with financial statements to enable them takes part in decision making during the meeting.