Why Do I Need To Appoint A Company Secretary?
Under the Singapore Companies Act, it is mandatory for every company to appoint a company secretary within 6 months of the date of its incorporation. It is of utmost importance to appoint a qualified Company Secretary with the necessary knowledge and experience to perform the administrative and reporting functions that are governed by the law. It is his/her duty to assist the directors in ensuring that the company meets all its regulatory obligations.
He/She must be residing locally in Singapore and not be the sole director of the company.
In compliance with section 171(1AA) of the Companies Act, the appointed Company Secretary must possess at least one of the following qualifications:
- Been a secretary of a company for at least 3 of the 5 years immediately before his appointment as secretary of the public company
- Qualified person under the Legal Profession Act (Cap. 161)
- Public accountant registered under the Accountants Act (Cap. 2)
- Member of the Institute of Certified Public Accountants of Singapore
- Member of the Singapore Association of the Institute of Chartered Secretaries and Administrators
- Member of the Association of International Accountants (Singapore Branch)
- Member of the Institute of Company Accountants, Singapore.
According to the handbook “ACRA and I” published by ACRA in 2011, even though the role, duties and responsibilities of a “Company Secretary” is not defined in the Companies Act , it is an important appointment as he/she is the officer primarily responsible for administrative and reporting functions that are governed by the law. The Secretary should assist the directors to ensure that the company meets all its regulatory obligations.
Like all directors, the Company Secretary is an officer of the company answerable to duties and obligations set out in the Act, including the following fiduciary duties usually applicable to directors:
• To act in good faith in the best interest of the company
• To avoid conflict of interests
• To carry out duties with reasonable care and diligence
• Not to make illegitimate profits from personal dealings for/with the company
Although the ultimate responsibility for complying with legal obligations lies with the directors, the Secretary may also be held liable for the company’s failure to comply with the law in certain situations. This is because the Act recognises that the directors depend on the Secretary for guidance on compliance issues. It also includes secretaries in its definition of ‘officer’, which mean they are bound by all the relevant duties and obligations.