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SINGAPORE POLYTECHNIC School of Business

BA1027 CORPORATE SECRETARIAL PRACTICE

CHAPTER 1 INTRODUCTION TO ‘CORPORATE SECRETARIAL PRACTICE’ -


DUTIES, QUALIFICATIONS AND APPOINTMENT OF THE
CORPORATE SECRETARY;

Objective
The student should be able to understand the role, functions, qualifications and appointment
procedure of a company secretary.

Contents

• The Role of the Company Secretary


• Do all Companies need a Company Secretary?
• The Qualifications and Appointment of the Company Secretary
• The Status And Liability of the Company Secretary
• The Company Secretary and the Registry of CompaniesAccounting and
Corporate Regulatory Authority (ACRA)

• The Status And Liability of the Company Secretary


• The 3 main types of Duties of the Company Secretary
________________________________________

The Role of the Company Secretary


The company secretary plays an important role in ensuring that:
- a company, and
- its directors
comply with company law.

The functions of the secretary are largely administrative in nature. He does not have the
power to participate in the management of the company’s affairs, but he carries out the
directors’ decisions.

However, the articles of most companies normally state that the use of the company’s
common seal must be supported by the signatures of the secretary and one director. (When
the common seal is used, the company is bound even if the contract is not supported by
consideration – e.g. when the company gives a guarantee for its subsidiary’s debts)

Do all Companies need a Company Secretary?


The Companies Act requires every limited company to have a formally appointed company
secretary. (The Secretary must submit a form to ACRA confirming that he or she undertakes
the responsibilities of that position.)

In all companies, whether public or private, the secretary performs an important role in
ensuring that the company meets statutory requirements.

For public companies these may be complicated tasks requiring specialised up-to-date
knowledge of company law. Therefore, public companies are required to appoint a
professionally qualified company secretary.

In contrast, company secretaries for private companies need not be professionally


qualified.
The Qualifications and Appointment of the Company Secretary
Chapter 1 © 20098 by Singapore Polytechnic. All Rights Reserved.

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SINGAPORE POLYTECHNIC School of Business
BA1027 CORPORATE SECRETARIAL PRACTICE

A company must appoint a secretary within six months of its incorporation. This office must
not be left vacant for more than six months at any time. The secretary must be a natural
person who has his principal or only place of residence in Singapore.. (section 171) A
company may appoint more than one secretary.

Such person is appointed by the directors. The company’s articles of association will usually
provide for the secretary’s terms and conditions of office to be determined by the directors.

Articles 95 of Table A provides as follows:-


95. The secretary shall in accordance with the Act be appointed by the directors for such
term, at such remuneration, and upon such conditions as they may think fit; and any
secretary so appointed may be removed by them.

Under the Companies Act, section 171(1A) provides that the directors of a private company
are under a statutory duty to ensure that the persons appointed as a company secretary are
persons who appear to them to have the requisite knowledge and experience to discharge the
functions of secretary of the company.

In the case of a The directors of a public company, the directors must ensure that the person
appointed as secretary of their company is one who:

(a) appears to them to have the requisite knowledge and experience to discharge the
functions of a secretary of a company, and

(b)(i) on 15 May 1987 held the office of secretary in that company; or

(ii) for at least 3 years of the 5 years immediately before his appointment as secretary,
held the office of secretary of a company; or

(iii) is a lawyer, accountant registered with the Institute of Certified Public


Accountants of Singapore (i. the law should also protect the members who have
invested their capital for specific purposes e a CPA), a member of SAICSA, or a
member of such other professional association as may be prescribed; or

(iv) is a person, who because of such academic or professional qualifications as may


be prescribed by Minister of Finance/Registrar, is capable of discharging those
functions.

As mentioned earlier, private companies need not appoint professionally qualified (e.g. CPA)
company secretaries (as discussed in para (iii) above). This is consistent with the steps to
simplify the incorporation and administration of private companies. Private companies have
to decide whether they want to undertake these responsibilities internally (eg. by a director or
an employee) or appoint a professionally qualified company secretary. The intended effect is
to keep maintenance costs for small business low. Some private companies may make
“business decisions” (as opposed to being obliged by law) whether to retain professionally
qualified company secretaries.

It is possible for a director (except a sole director) to be appointed as a company secretary.


To become a secretary of a company, the person appointed by the directors must lodge his
Chapter 1 © 20098 by Singapore Polytechnic. All Rights Reserved.

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SINGAPORE POLYTECHNIC School of Business
BA1027 CORPORATE SECRETARIAL PRACTICE

consent to act as secretary in Form 45B with the Registrar within one month after his
appointment.

If the office of secretary is vacant, anything required to be done by him may be done by the
directors or by a person authorised by the directors.

The Company Secretary and ACRA the Registry of Companies


A company secretary will have regular dealings with the Accounting and Corporate
Regulatory Authority Registry of Companies - as this is where public records about every
company are held.

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SINGAPORE POLYTECHNIC School of Business
BA1027 CORPORATE SECRETARIAL PRACTICE

The Companies Act requires that a minimum amount of information about a company must
be publicly available, including:
- annual accounts (usually, but not always, consisting of a copy of the latest financial
statements),
- the registered office address, and
- details of directors, the secretary and members.

The Status And Liability of the Company Secretary


The company secretary is an officer of the company. This means that he may be criminally
liable for defaults committed by the company including any failure to file (within the time
allowed):
- any change in the details of the company’s directors and secretary, or
- the company’s annual return.

Further, the secretary must be present by himself, his agent or clerk at the registered office of
the company on the days and at the hours during which the registered office is to be
accessible to the public. This is to ensure that summonses to court and other official
documents can be served on the company.

The 3 main types of Duties of the Company Secretary


The company secretary is responsible for administrative and regulatory compliance. The key
functions and duties include establishing and maintaining all necessary company registers;
arranging for shareholders; and directors’ meetings; lodging and filing documents with
ACRA; acting as liaison with SGX and ensuring compliance; arranging for allotment and
issues of share, and handling transfer and transmission of shares; providing administrative
assistance in preparing and presenting annual returns; acting as advisor to directors, officers
and members as well as intermediary between directors and officers; and being responsible
for custody and use of common seal of the company.

Generally the The duties of the company secretary may be divided generally into three main
areas:
1. maintaining statutory registers
2. completing and filing statutory forms
3. convening meetings (especially the AGM) - and subsequently recording the
resolutions passed (and filing the resolutions where required under law).

1. Maintaining statutory registers


All companies must maintain up-to-date registers of their key details, which include:
 Register of members [s. 190, Companies Act]
 Register of debenture holders [s. 93, Companies Act]
 Register of directors, auditors, managers and secretaries [s. 171 and s. 173, Companies
Act]
 Register of directors' shareholding and other interest [s. 164(1) and s. 164(8), Companies
Act]
 Register of mortgages and charges [s. 138(2), Companies Act]
 Register of substantial shareholders for companies listed on SGX [s. 88(1), Companies
Act]

Chapter 1 © 20098 by Singapore Polytechnic. All Rights Reserved.

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SINGAPORE POLYTECHNIC School of Business
BA1027 CORPORATE SECRETARIAL PRACTICE

The details retained within these registers would include, for example, names, addresses,
dates of appointment (and resignation) and the number and type of shares held.

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SINGAPORE POLYTECHNIC School of Business
BA1027 CORPORATE SECRETARIAL PRACTICE

2. Completing and filing statutory forms


Here the role of the company secretary would extend to ensuring (for example):
- the annual accounts are filed on time at the Registry of CompaniesACRA.
- the completion and filing of the annual return. This is a 'snapshot' of the general
information about the company, which must be checked closely and amended if
necessary, signed and dated and returned to the Registry of. If this is returned late or not
returned at all, the company, its director(s) and secretary may be prosecuted
- the completion of several forms that the company may have to file at the Registry of
CompaniesACRA, including:
- changes in directors, secretaries and their particulars
- a change of accounting period/balance sheet date
- a change of registered office
- any allotments of shares
- any amendment to the Memorandum and Articles of Association of the
company.

Usually these forms have to be filed at the Registry of CompaniesACRA within a specified
deadline following the change.

3. Meetings and resolutions


Company law sets out procedures for conducting certain aspects of company business
through formal meetings, where resolutions will be passed.

(NB: A resolution is an agreement or a decision taken by the directors (BOD meeting) or


members (general meeting of members). When resolutions are passed/approved by the
required majority, the company is bound to follow these decisions.)

Here the role of the company secretary would be to ensure:


- that proper notice of meetings is given to those who are entitled to attend, and
- that copies of resolutions are sent to the Registry of CompaniesACRA, where required,
within the relevant time frame.

Chapter 1 © 20098 by Singapore Polytechnic. All Rights Reserved.