No, a registered and incorporated company in Singapore cannot operate for more than six months without a corporate secretary. The position is even a requirement for a company’s incorporation as stipulated by Singapore’s Accounting and Corporate Regulatory Authority (ACRA). However, the eligibility requirements for a corporate secretary depend on whether the company is a public or private enterprise.
Based on Section 171 (1AA) of the Companies Act, private companies can hire anyone with a genuine SingPass for this role. The individual must, however, demonstrate that he or she possesses the skill sets and experience to discharge the functions of a company secretary.
The requirements are a bit different when the company is a public entity. To qualify as a corporate secretary for a public company in Singapore, a person must:
- Legally reside in Singapore
- Be a natural person
- Be fit to discharge this role
- Have taken and passed the Anti-Money Laundering (AML) or Combating the Financing of Terrorism (CFT) course and proficiency test.
Why Do Companies In Singapore Need Corporate Secretaries?
Several regulations and laws guide the establishment and operations of companies in Singapore. However, without a dedicated company representative to keep a tab on these laws, many companies risk infringing them, even though it might mostly be unintentional. And besides affecting the government’s revenue generation, such non-compliance with established corporate governance practices can also affect the smooth running of the business.
What Are The Responsibilities Of A Corporate Secretary?
In Singapore, a company secretary’s role depends on each company. However, one fundamental responsibility of a corp sec is to ensure that the company they represent complies with the relevant laws governing their operations. But for most companies, a corporate secretary will also perform these other functions:
- Maintain and update the company’s minutes and record books
- Call for meetings upon the orders of the director or relevant authority
- Prepare minutes and administer such to directors and relevant stakeholders
- Notify directors of pending deadlines from ACRA, especially as it relates to annual returns
- Update the company’s stakeholders and directors on any change in ACRA’s regulations
- Perform any other functions as specified in the company’s employee+ handbook.
How Do Companies In Singapore Recruit Corporate Secretaries?
Startup companies with only a few workers can look inward for someone to take on these roles. However, ACRA forbids a person from acting as a company’s director and secretary. Each company’s approach to filling this corporate secretary role depends on its size, resources, and needs. But generally, it will fall under any of these three categories:
- Looking Inwards
- Employing A Permanent Secretary
- Outsourcing To An Agency
Small and private companies can assign one of their staff members to play this role since hiring a full-time employee can take a toll on its finance. But as noted earlier, the director’s and the secretary’s roles must be kept separate.
Well-established companies with a large workforce can afford to employ a full-time in-house secretary. This arrangement is what ACRA would support, as it identifies a specific person responsible for liaising with the authorities on behalf of the company. Of course, that comes with extra expenditure for the company, but its advantage is that it is more reliable than the other two options. In addition, the risk of flouting any law or missing a deadline is low with an in-house corporate secretary because it is their primary duty to take care of such matters.
The third option involves companies outsourcing their corporate secretary roles to a consulting agency. Many of such exists in Singapore, and they often have experienced professionals in secretariat roles who can keep their clients informed concerning their legal responsibilities. The advantage of this approach is that it saves companies some funds which they would otherwise have spent hiring a full-time secretary.
Are There Penalties For A Company Not Having A Corporate Secretary?
Yes, ACRA prescribes a fine of $1,000 for any company in Singapore that does not have a corporate secretary. But that is only part of it when it comes to the setbacks of not having a secretary. There is a high possibility of such companies contravening many guidelines and missing deadlines, which can badly affect the business. Some of the violations a company can incur because it doesn’t have a secretary include:
- Not registering an official address for your business
- Forgetting to update the ACRA registrar for any change in the company’s composition and location
- Not publishing the company’s official registration number and name as required
- Missing deadlines for filing the company’s annual returns
- Not notifying the registrar of a change in auditors and directors.
Each of these violations and others captioned in the Companies Act carries a penalty, often involving huge sums. Some offences may lead to the closure of the business and a possible jail term for culpable directors or business owners. And beyond the “bad name” the company may leave with the government authorities, the lack of a competent company secretary can severely affect the business itself.
Shareholders and investors often lose confidence in companies with corporate governance issues. Therefore, it is not in the interest of either an emerging or established company to present itself as incapable of managing its administrative responsibilities.
It is almost impossible to successfully manage a company in Singapore without a corporate secretary. In addition to a director, a secretary makes up two of the other critical human resource required under ACRA regulations before a business can be incorporated.
While it is theoretically possible to adopt the DIY approach, especially for a private business, large corporations always need a dedicated secretary to manage their complex needs. Therefore, another option for most companies is outsourcing this role to a corporate service provider with a proven track record.