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Why Do You Need Company Secretary in Malaysia

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Why Do You Need Company Secretary in Malaysia

A company secretary eases all your business’ process. It is outsourcing a secretary from a trusted firm. 

Many people tend to confuse the position of company secretary with a traditional office secretary. 

There are certain duties and roles that every company secretary must fulfil as per Malaysian law.

Do you NEED to pay a monthly fee to an appointed company secretary? 

Yes, as per Section 139A of the Companies Act 1965, every organisation in Malaysia must appoint a company secretary. 

Section 236 of the Companies Act 2016 further states that a qualified company secretary must be appointed within 30 days of a company’s establishment.

If you have no experience in running a company, you may be wondering the purposes of paying a monthly fee to a company secretary for your Sdn Bhd. 

A company secretary does not contribute directly to the operation of the company. 

They act as administrative officer and advisor for a company, especially in corporate governance matters and boardroom procedures. 

These 8 roles of a company secretary helps you with your company’s legal compliance

What is a company secretary?

A company secretary is a qualified individual who is an officer of a company. 

It is the responsibility of the Board of Directors of the company to appoint a company secretary. 

This decision must be taken very carefully after thorough research and interviewing because a company secretary plays a critical role in a company.

A company secretary is responsible for much more than just compiling records or performing the traditional duties of a regular secretary. 

They are to be involved in all of the departments of an organisation. 

Company secretaries should have the required skills and knowledge to regularly monitor and review company procedures and advise the board of the company on important matters. 

They also have to work with other companies like accounting firms in Malaysia to which a company might have outsourced its services.

1. Advise on registration and governance of company

A company secretary not only helps you with starting a company, but they also provide advice on corporate restructuring, mergers, acquisitions, good corporate governance, and procedures of striking off or winding up a company.

An experienced company secretary can save you the hassle of deciding on an available company name and preparing the information needed. 

It will ensure a smooth company registration process better than incorporating your Sdn Bhd through the MyCoID portal on your own.

A digital company secretarial firm allows you to register your Sdn Bhd fully online without having to meet up with a company secretary or visit the SSM counter. 

They must have knowledge of the important processes of a company. 

This is the primary reason why experienced and professional individuals are appointed to this position because they are familiar with the requirements of this job. 

A company secretary should have knowledge about:

  1. Essential information about the organisation and business models so he or she can advise the Board for the betterment of the company.
  2. Rules and regulations that apply to the company.
  3. The essential provisions of the Articles of Association of the company.
  4. Corrective measures that have to apply in case of an error or problem arising at the company.

2. Ensure company is compliant with laws and regulations

Under Malaysian law, a company secretary is responsible for ensuring that legal and standard business protocols are being implemented and that the organisation is in compliance with legal guidelines and local rules and regulations. 

You can ask your company secretary regarding any business-related laws and regulations that you are unsure of.

A company secretary will advise and get you in touch with relevant professionals to provide the necessary services. 

There are other legal requirements that should be fulfilled at all times such as taxes, business licences, employer’s EPF, SOCSO, and EIS contribution, the employment law, etc. 

The key updates of the Companies Act 2016 simplified compliance with the governance of a Sdn Bhd. 

Most of these legislations are stated in the Companies Act 1965

3. Document meeting minutes and resolutions

A company secretary is required to prepare the agenda of the meeting and ensure the meetings are properly called, constituted and carried out in accordance with the law of meeting. 

The role of a company secretary is not only limited to advising the board about the dates of the annual general meeting. 

They are also to attend Board Meeting (meetings of directors) and General Meetings (meetings of shareholders) as requested.

The company secretary prepares the minutes of meetings and follows up on any decision made during the meeting as instructed. 

Sometimes, extracts of resolutions that are decisions taken at meetings are prepared and certified as a true extract of the original meeting. 

A company secretary is an essential link between shareholders and a company. 

Any significant announcement like changes in the company must be announced to the shareholders via the company secretary.

They prepare and distribute circular resolutions to the directors to be signed when the board decides that a written resolution is sufficient.

A written resolution signed off by the directors is sufficient evidence of the passing of a company decision. 

They must also make sure that annual returns are filed with concerned authorities.

4. Ensure company details are up to date

A company secretary is responsible for notifying the SSM of changes and updates related to company documents that are kept in the registered office. 

They also have to ensure that all of the changes made in a company are as per the law and the company’s rules. 

Company details such as directors, shareholders, paid-up capital, shares, and constitution could change from time to time as the company grows. 

He or she is responsible for communicating with official companies, authorities and other partners such as accounting firms in Malaysia. 

Other documents such as the constitution, minute books, financial statements, meeting minutes, resolutions are also managed and kept at the registered office by the company secretary. 

Additionally, a company secretary certifies documents as true copies of the originals (CTCs) that are needed for opening a business bank account, loan application, and other official matters.

Malaysian law also dictates that holding an annual general meeting is essential for a company.

For this purpose, they should advise the board of the company about the relevant dates on which annual general meetings can be held.

5. Record the Financial Year End (FYE)

A company secretary needs to record the Financial Year End (FYE) of a company. 

Financial Year End is the date when the company closes the financial accounts. 

It is usually the last day of a particular month a company has decided. 

You should inform your company secretary of the FYE decided for your company as early as possible.

6. Appoint auditor

A company secretary has to appoint an auditor for the company. 

Unlike accountants and lawyers, an auditor has to be appointed by providing consent to act before they can provide auditing services to the company. 

Each year after the FYE, there will be 30 days of vacant period when a new auditor can be appointed. 

If there is no new auditor appointed during the vacant period, the previous auditor will automatically be appointed for the next financial year. 

The resignation of the existing auditor has to be lodged to the SSM before appointing a new auditor. 

The new auditor can be appointed after the existing auditor provides clearance to the company 

But, you don’t have to appoint an auditor if your company falls under one of the following categories:

  • Dormant companies
  • Zero-revenues companies
  • Threshold-qualified companies

7. Verify the directors and shareholders identities and lodge the declaration of beneficial ownership

Identity verification, or more commonly known as the Know Your Customer (KYC), is an important process for the company secretary in ensuring that all directors and shareholders of the company are who they claim to be. 

This is done by meeting the directors and shareholders face to face or through e-KYC, before the company is incorporated or when a new director or shareholder is added to the company. 

The company secretary needs to obtain and maintain the records of the declaration of beneficial ownership upon receiving the information from directors and shareholders.

8. Lodge annual reports required by SSM

A company secretary ensures strict company compliance with deadlines set by SSM.

The SSM requires Sdn Bhd to lodge several mandatory reports each year – an annual return and audited financial statements together with directors’ reports. 

There are penalties for the company or the directors that failed to adhere to this requirement as stated in the Companies Act 2016. 

A company secretary avoids these penalties for you and your company.

Annual return

Even if there are no changes in information after a year of operating the Sdn Bhd, a statement still has to be lodged to confirm that there are no changes made. 

This annual return is a summary of the company with information such as business nature, registered address, directors and shareholders, etc. 

The annual return is prepared on the anniversary of the company incorporation date and should be lodged within 30 days thereof.

Financial statements with directors’ report

Financial statements are usually prepared by accountants before audited by a certified auditor. 

Auditor will then prepare an auditor’s report.

Directors will also need to prepare a report which explains information on directors, main activities of the company, shares, dividends, business reviews, etc. 

These documents are then compiled and signed by the commissioner for oaths before being passed to the company secretary for circulation to shareholders and the auditor. 

Once approved by the board, it will be lodged to the SSM within 30 days after the circulation.

No organisation can run smoothly without a company secretary as the law has made it compulsory for companies to hire one soon after companys’ inception. 

However, your company has complete freedom to choose a company secretary to your liking. 

It is an essential position that should be filled as soon as possible so that a company secretary can directly contribute to the success of the company. 

Besides fulfilling the requirement as stated under Section 235 of the Companies Act 2016, a company secretary needs to obtain a practising certificate that should be renewed every 3 years. 

Not everyone can act as a company secretary. 

Masta has the expertise to ensure your companies’ smooth running. 

Get in touch with Masta today.

Book a consultation now

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