Guide to Corporate Secretarial Services & Hiring a Suitable Firm
Why Hire a Corporate Secretarial Firm in Singapore?
Corporate secretarial firms are often hired to take charge of the administrative functions of a company, as well as ensuring that a company meets its compliance and reporting requirements. In such a case, the company secretary is a named individual from the corporate secretarial firm, who for recording and reporting purposes, is the person named as the official company secretary for a particular company.
In Singapore, a locally incorporated company has to meet numerous requirements set out by ACRA. A failure to meet these requirements could result in fines, penalties or both, imposed by law. Hence, most companies engage the professional services of a corporate secretarial firm to keep track of reporting deadlines and to handle the company’s compliance.
As a business owner, the issue of hiring a corporate secretarial firm can be a rather daunting one, given that there are so many service providers in the market. Despite having to meet the same compliance requirements as set out by ACRA, you will realise that different corporate secretarial firms have different ways of working.
Each firm will have their own strengths and weaknesses that complement your company. Here’s a guide to Corporate Secretarial Services in Singapore and how to can choose a suitable firm for your company.
ACRA Regulations on Hiring a Company Secretary
According to ACRA regulations, every company has to appoint a company secretary within 6 months of its incorporation, regardless of whether it is a private or public company.
The company secretary must also be ordinarily resident in Singapore – a Singapore citizen, Singapore Permanent Resident (PR) or an EntrePass holder. In some cases, the company secretary may even be legally responsible for the failure of the company to meet its reporting or compliance requirements.
If there is more than one director in the company, directors themselves can also be company secretaries. As per section 171(1E) of the Companies Act, ACRA does not allow sole directors of companies to be company secretaries.
ACRA Requirements to be a Company Secretary
A company secretary should have the knowledge and experience required to discharge his duties.
In addition, in accordance with section 171(1AA) of the Companies Act, the company secretary of a public company will have to fulfil at least one of the following requirements:
- 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
- Public accountant registered under the Accountants Act
- 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
In addition to hiring professionals, some owners of companies have their associates (sometimes family members) to fulfil this role for them, as long as they are adequately qualified, as per the qualifications above.
What Services Do Corporate Secretarial Firms Provide?
Corporate secretarial firms provide a wide and expansive range of services for companies to ensure that they meet numerous compliance and reporting requirements. Most corporate secretarial firms will provide services in the areas of:
- Updating and filing documents with ACRA
- The maintenance and upkeep of statutory registers
- The preparation of annual general meeting documents and meeting minutes
Secretarial services aside, a well-rounded corporate secretarial firm will also provide additional services that will facilitate the incorporation as well as the running of your business. These services include:
- Providing you with a nominee director
- Advising you on your company bookkeeping or your tax queries
- Assisting you in transactions such as the offering of new shares for your company and the conversion of loans to equity.
While these services as usually not stated explicitly as they are not secretarial services per se, corporate secretarial firms who are willing to provide these add-on services for you are the ones you know you can rely on for further queries and advice.
Lastly, more than simply being a service provider, company secretaries take on many other roles in the firm as well. These include reminding key personnel of meetings and deadlines, and providing advice to directors in the area of legal or compliance-related fields. Company secretaries are valuable assets to the company and take on a wide range of roles and responsibilities.
Can You Make Do Without Hiring a Corporate Secretarial Firm?
Some companies may not see the need to engage a corporate secretarial firm for a company secretary, choosing instead to “DIY”. There is no stipulation from ACRA that a corporate secretarial firm must be engaged to carry out corporate secretarial services for your company. This means that “DIY” secretaries are merely members of the company who are qualified and take on the roles of a company secretary. Whether “DIY” secretaries are suitable largely depends on whether you are a public or private company.
For company secretaries of public companies, you have to be a registered filing agent or registered qualified individual (such as a lawyer) on ACRA, as per section 171(1AA) of the Companies Act. This comes with its own set of requirements and requires you to submit an application on ACRA to be a registered agent or qualified individual.
This means that public companies cannot merely appoint anyone to be their company secretary. While it is still technically possible for public companies to go without appointing a corporate secretarial firm, they have to ensure that these individuals are qualified as per the above qualifications.
For company secretaries of private companies, anyone with a valid SingPass who is ordinarily resident is able to be appointed as one. Section 171(1A) of the Companies Act states that any individual who has the “requisite knowledge and experience to discharge the functions of secretary of the company” qualifies. Hence, you may choose not to engage a corporate secretarial firm, and appoint “DIY” secretaries. These include family members or friends, as long as they have a valid SingPass.
Benefits and Drawbacks of “DIY” Secretaries
There are benefits and drawbacks to going “DIY”. The clearest benefit would be that you save on the annual fees that you pay to the corporate secretarial firms, as well as any other add-on fees that you get charged with depending on what other services you require. Another possible benefit would be that with everything done internally, you would be saving time and effort that comes with liaising with an external firm.
A possible drawback of “DIY” secretaries would be their level of experience as compared to professionals from corporate secretarial firms. Most “DIY” secretaries would have less experience than corporate secretarial firms, or not be in touch with the latest industrial regulations and practices. This then opens up the avenue for mistakes to be made. For instance, deadlines can be missed or procedures not adequately followed, such as the changing of a registered address on ACRA without filing the proper resolution.
Compliance mistake are costly, and can result in penalties and fines imposed on the company. If serious enough, this could even lead to the removal of a director from his position, or imprisonment of the secretary.
Since public companies cannot merely appoint any individual with a SingPass unlike private companies, it is highly recommended that owners of public companies appoint a corporate secretarial firm rather than go “DIY”. Corporate secretarial firms provide professionals who are also equipped with the ACRA-stipulated qualifications, ensuring that public companies can comply with ACRA regulations.
Even for private companies, choosing a corporate secretarial firm to handle legal and compliance requirements for you could prove to be a worthwhile investment especially in the long term.
However, the decision to engage the firm is still down to company management. This is depending on how costs are managed and if the company can afford one, or choose to go “DIY” instead.
What Should You Look Out For in a Company Secretary?
There are certain traits and qualities that you should look out for in company secretaries from these firms that allow you to make a more informed decision. Do note that this list is non-exhaustive and merely highlights some of the important trademarks of a competent company secretary:
Strong corporate governance prowess
For instance, company secretaries who have strong organisational knowledge and how activities are run in your company. They would be more sensitised to changes such as appointments or removals of company officers, and subsequently be quick to carry out the necessary filing.
High level of organisation
With numerous roles and responsibilities, compliance duties and filings to carry out, your company secretary needs to excel in handling many tasks at the same time.
Competent in planning and keen eye for detail
Company secretaries must be schedule-driven and ensure that a company’s legal compliance requirements are met well before their due date.
Good communication skills
Communication with internal and external stakeholders of the company is commonplace for company secretaries. A good company secretary is one who is situationally aware, tactful and is competent in negotiation.
Cost Structures of Corporate Secretarial Firms
There are numerous corporate secretarial firms in Singapore readily available for your business, most of which are found online. Each firm will have their own way of charging your business, and it is best that you get in touch with these firms to find out in greater detail. Typically, some firms inform you of the fees upfront on their website, while other firms will give you a quotation upon emailing them.
Fees can range from $350-600 per annum, and each firm will “package” their services in different ways. It is important to find out exactly what you are paying for, and if there will be any additional charges. Most firms will cover the basic corporate secretarial services such as providing you with a named company secretary, filing your annual returns and preparing AGM documents. Other services such as the recording and filing the passing of resolutions may incur separate charges throughout the year as the resolutions are passed.
There are also periods of discounts from various corporate secretarial firms at different times, as well as “loyalty” packages which offer you cheaper packages if you hire them for a longer tenure. The standard tenure is usually 1 year. If you are not in a rush to hire a corporate secretarial firm, you should subscribe to their newsletters or updates to be informed of such discounts and packages.
Hiring Your Company Secretary
Hiring a company secretary with the right corporate secretarial firm is an important decision for business owners to make, statutory requirements aside. In the long run, a capable and trustworthy company secretary will go a long way in ensuring the stability of your business.
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