The Companies Commission of Malaysia (SSM) was in the news recently talking about the need to tighten the rules for company secretaries. This is to be expected as the company secretary is a key figure for any company in Malaysia today. The company secretary’s office is needed right from the point of company incorporation. The company secretary then plays a very crucial day to day role in ensuring the company complies with various corporate governance issues as well as other legal requirements.
To appreciate the vital role of a Malaysia company secretary, it is important to look at the various roles and duties that he/she plays in the administration of a company’s affairs.
A person or corporate secretarial services in the position of a company secretary is the officer of that company and an adviser to the board. The desirable qualities of the company secretary include:
- Being familiar with and understanding the provisions of the Memorandum and Articles of Association of the company.
- Be conversant and in compliance with of different statutory and regulatory bodies.
- Ensuring correct procedures are followed and adherence to it in accordance with the Company’s Memorandum and Articles of Association (M&A) and the Companies Act, 2016.
- Advise the board and ensure the interests of the board and the company are always taken care of.
1. Compliance with Statutory Requirements and Advisory
- The first duty of a company secretary is to ensure that a company in Malaysia is always compliant with legislation outlined in Companies Act 2016 at all times. This includes acting as the official contact point for communication, preparation and submission of Statutory Returns with the Suruhanjaya Syarikat Malaysia (SSM).
- Ensure that changes in a company’s statutory information is fully documented as required in the appropriate forms and lodged with the Registrar of Companies within the required period of time.
- Advise the board of directors on when to hold the company’s annual general meeting as required by the law.
2. Presiding Over Company Meetings
A Malaysia Certified Company Secretary oversees the preparation of company meetings as well attending the meetings and recording the Boards and Members’ Resolutions. The roles and duties related to meetings include:
- Attending board meetings and advising the board on matters relating to legal compliance and corporate governance
- Act as a link between the shareholders and the company. This involves preparing and reading important matters during the Annual General Meeting or Extraordinary general Meetings. This information is included in notices (circular resolutions), annual reports and other publications needed by the shareholders. The company secretary communicates dates for these meetings to shareholders, as agreed by the board of directors.
- Filing of the annual returns as passed during the Annual General Meeting, and lodging these returns with the Malaysian company registrar, and do it in time set by the Companies Act 2016.
3. Keeping the Company’s Statutory Books
The company secretary is expected to keep all statutory books right from company incorporation in Malaysia. These books include Register of Directors, Register of Members, and the Company Certificate etc.
The company secretary is responsible for security and accuracy of all company documents including share certificates, meeting minutes, memorandum and article of associations and other crucial documents.
The vital position of a company secretary requires only a qualified person or secretarial services. This is more so because this position’s duties and roles go beyond mere administrative duties but encompass roles that the existence of the company depends on.
The company secretary has the crucial role of ensuring that statutory compliance matters under the Companies Act is enhanced and enforced, and to ensure that good corporate governance is practiced by the board of directors. This is not always easy if the company secretary’s advice is against the wishes of the board of directors.
There are strict qualification guidelines on who can become a company secretary. The Companies’ Act requires that anyone who becomes a company secretary is licensed by the Registrar of Companies, or is a member of a professional body prescribed by the Minister of Domestic Trade, Cooperatives and Consumerism as published in the Malaysia gazette.
The bodies prescribed are able to give the necessary qualifications for a company secretary, including the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA), Malaysian Institute of Certified Public Accountants (MICPA), Malaysian Institute of Accountants (MIA), the Bar Council of Malaysia, Sabah Law Association, Advocates Association of Sarawak and the Malaysian Association of Company Secretaries (MACS).
To employ a company secretary, the SSM (Company Registrar) must be satisfied that the proposed person is academically qualified and has the integrity required in running a company’s affairs. Knowledge of company law as well as different regulations relating to corporate governance in Malaysia is also mandatory.
Continuing Professional Education is a requirement for company secretaries. These are courses and training’s that are aimed at improving the capacity of these professionals in a changing business environment.
The CPE is enforced by the SSM’s requirement that a company secretary should have attended a minimum number of training sessions and courses before having his professional license renewed.
As Malaysia’s agency to oversee corporate regulatory compliance, the SSM is fully committed to ensuring that it licenses only competent and qualified persons to company secretary positions. This is to enhance a corporate environment where corporate governance standards are highly followed.
There are cases where the SSM has taken action against errant company secretaries who have misled or acted against the interests of their companies. In these instances these errant professionals are issued with show-cause letters and reprimanded. Extreme cases lead to blacklisting and de-listing from the roll of membership of the prescribed bodies. Where criminal charges can be proven these suspects are charged in a court of law.
It should be noted that there are people or service companies that masquerade as ‘company secretaries’ when they do not have the qualifications or license to hold these titles legally. It is important that anyone wishing to do company incorporation in Malaysia exercise due diligence in the search for a company secretary.