Company Secretary in Malaysia: A Comprehensive Guide to Governance and Compliance

Contents

Overview of the Role
1.1 Role and Responsibilities of a Company Secretary
1.2 Legal Requirements for Appointing a Company Secretary
Appointment of a Company Secretary
1. Criteria for Selecting a Company Secretary
2. Appointment Process and Legal Requirements
  2.1 Summary Process: Appointment of First Company Secretary
  2.2 Summary Process: Appointment of a New Company Secretary
Office of the Company Secretary
3.1 Duties and Responsibilities
3.2 Requirements for Maintaining the Office

The role of the Company Secretary in Malaysia is a linchpin in ensuring that companies adhere to the legal and regulatory requirements mandated by the Companies Act 2016. As businesses navigate through complex regulatory landscapes, the Company Secretary ensures that the company adheres to all legal obligations while promoting operational efficiency, strategic decision-making, and effective communication with stakeholders. This article explores the responsibilities, legal requisites, and the operational framework of the Company Secretary's office.

1. Overview of the Role

1.1 Role and Responsibilities of a Company Secretary

The Company Secretary is a key figure in corporate governance, providing essential support to the board of directors and ensuring that the company meets its statutory obligations under Malaysian law. Their role is multifaceted, encompassing compliance, corporate governance, and administrative functions. Below are the core responsibilities of a Company Secretary:

Corporate Governance Custodian:
- Advises on compliance with corporate governance frameworks.
- Ensures adherence to the Companies Act 2016 and other relevant laws.
- Provides guidance on the legal implications of board decisions and corporate policies.
Regulatory Compliance Facilitator:
- Prepares and files statutory returns, including annual returns, to the Suruhanjaya Syarikat Malaysia (SSM).
- Keeps track of regulatory changes and ensures that the company complies with updated laws, including tax regulations, anti-money laundering measures, and employment legislation.
- Ensures timely filing of documents such as financial statements and other statutory declarations to avoid penalties.
Board and Stakeholder Support:
- Organises and facilitates key meetings such as Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs), ensuring that accurate minutes and resolutions are recorded.
- Acts as a liaison between shareholders, directors, and regulatory bodies.
- Provides advice on board procedures, resolutions, and other matters requiring corporate governance knowledge.

For detailed information on the Company Secretary's role and regulatory guidelines, the SSM official website is an invaluable resource, providing comprehensive information on corporate governance.

1.2 Legal Requirements for Appointing a Company Secretary

The Companies Act 2016 sets out specific legal requirements for the appointment of a Company Secretary. These requirements are as follows:

Every company must appoint a qualified individual as a Company Secretary.
In Malaysia, the qualifications to become a Company Secretary are outlined in Section 235 of the Companies Act 2016. The essential criteria are as follows:
- Natural Person: The individual must be a living person, not an entity.
- Minimum Age: Must be at least 18 years old.
- Residency: Must be a Malaysian citizen or permanent resident with a principal place of residence in Malaysia.
- Professional Membership: Must be a member of a recognized professional body authorised by the Ministry of Domestic Trade and Consumer Affairs.
- No Criminal Record or Bankruptcy: The individual must not have been convicted of any criminal offense or declared bankrupt.
- Recognised Professional Bodies
  - The professional bodies approved by the Ministry include:
    - The Malaysian Association of Company Secretaries (MACS)
    - The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA)
    - The Malaysian Institute of Certified Public Accountants (MICPA)
    - The Malaysian Bar
    - The Malaysian Institute of Accountants (MIA)
    - The Advocates’ Association of Sarawak
    - The Sabah Law Association
- These organisations provide licensing and certification to ensure that company secretaries meet the necessary legal and professional standards. This framework is crucial to maintain accountability and efficiency in corporate governance across Malaysia.

2. Appointment of a Company Secretary

1. Criteria for Selecting a Company Secretary

The ideal Company Secretary possesses:

Professional Expertise: The ideal candidate should possess professional certifications from recognised bodies such as MAICSA, MIA, or MACS. They should have experience in managing corporate governance and statutory compliance within the context of Malaysian law.
Personal Traits: Unquestionable integrity, strong analytical skills, and effective communication abilities. The Company Secretary should have a high level of integrity and trustworthiness, as they will be handling sensitive company information.

Business owner can consult for professional advice on selecting a suitable candidate.

2. Appointment Process and Legal Requirements

The appointment process includes:

Internal Board Approval: A resolution must be passed by the board of directors. The board must confirm that the appointed individual meets all the eligibility criteria.
Submission to SSM: The company must notify SSM of the appointment within 14 days of making the decision. This is done by submitting the prescribed forms to the SSM. The submission ensures that the appointment is officially recognised and recorded.
Written Acceptance: The appointee must formally accept the role in writing, indicating their agreement to serve as the Company Secretary. This formal acceptance ensures that the individual understands their responsibilities.

2.1 Summary Process: Appointment of First Company Secretary

When establishing a company, appointing the first Company Secretary is a critical step:

Identify a qualified candidate during incorporation.
File the Secretary’s information with SSM.
Setting up the governance framework from the outset to ensure smooth operations in the company’s early stages.

2.2 Summary Process: Appointment of a New Company Secretary

In cases of resignation or termination:

Replacement Protocol:
- File a termination notification for the outgoing Secretary.
- Appoint a new one via a board resolution.
Handover and Documentation:
- Ensure proper transfer of statutory documents.
- Update all corporate registers.

3. Office of the Company Secretary

3.1 Duties and Responsibilities

The Company Secretary is tasked with managing various corporate governance and compliance functions, including:

Statutory Registers: Maintaining updated records for shareholders and directors.
Corporate Seal: Ensuring its security and proper usage.
Compliance Calendar: Tracking statutory filing deadlines to avoid penalties.

3.2 Requirements for Maintaining the Office

To ensure the efficient running of the Company Secretary's office, businesses should consider the following:

Technological Resources: Employ advanced systems for document management.
Continuous Education: Stay updated with changes in legislation and governance best practices.
Transparent Operations: Maintain meticulous records and ensure they are easily auditable.

Conclusion

The Company Secretary in Malaysia is more than a legal mandate; they are the custodians of corporate integrity and a strategic partner in governance. For businesses aiming to thrive in Malaysia’s competitive market, ensuring the appointment of a competent and qualified Company Secretary is a cornerstone of success. By selecting a qualified and experienced Company Secretary, businesses in Malaysia can foster good governance, enhance operational efficiency, and safeguard their legal interests.

Recommended Resources:

· SSM Malaysia: SSM Malaysia Website – A key resource for understanding regulatory requirements.

· MAICSA: MAICSA Website – For professional development and certification details.

· MACS: MACS Website – Insights on company secretary qualifications and membership.

· MIA: MIA Website – For accounting professionals seeking company secretary roles.

· Bar Council: Bar Council Website – For legal professionals interested in company secretary certifications.

Disclaimer: This guide provides general information. Always consult with local legal professionals for personalised advice tailored to your specific business needs.