Like other countries, Singapore also has its statutory requirements that need to be followed from time to time. Observance of these regulations is crucial when setting up a Singaporean company or when operating an existing one. One must note that corporate secretarial service providers like SBS Consulting can provide professional support in handling these provisions.
Why is it important to have a Company Secretary?
The Accounting and Corporate Regulatory Authority (ACRA) has stipulated that every Singapore-incorporated company must have at least one secretary upon registration. The company secretary acts as the compliance officer and is responsible for ensuring that the company complies with its statutory requirements within specific timelines and also runs its operations as provided in the constitution of the firm.
The company secretary does a vital job. They work with different authorities to make sure the company is compliant with the various laws. Company secretaries also facilitate communication in the organization, thereby making sure that critical information gets to directors, managers, employees, and shareholders. In this way, through the support of good corporate governance practices, they create a positive impact on the workplace.
However, some business owners, especially the ones who are new to the business world, do not see the importance of a company secretary and consider it as an added cost. This misconception fails to recognize the need for a qualified company secretary whose role is to regulate the company as well as facilitate its functioning.
Myth 1: A Corporate Secretary’s Job Is Only as Good as a Personal Assistant
The job profile of a corporate secretary is often misunderstood by most people by being compared to an administrative assistant. This perspective greatly underestimates the essential roles that corporate secretaries play.
Fact: Understanding the Importance of a Corporate Secretary in Corporate Governance
On the contrary, a corporate secretary is much more than a secretary, he/she plays a crucial role in a company. Primarily, they are accountable for guaranteeing the firm operates in line with the existing legislation as well as regulations and upholds sound governance. This entails drafting and submitting letters, particularly to authorities such as the Accounting and Corporate Regulatory Authority (ACRA), managing board meetings, and keeping records of the company’s transactions.
Corporate secretaries also play an important role of providing recommendations to the board of directors. They advise the board on issues of corporate governance so that the board takes appropriate actions that are legal. This advisory role is crucial in protecting the company from legal and regulatory issues.
Furthermore, the corporate secretaries ensure the proper flow of information between the board, management, and shareholders. They maintain a continuous information flow within the organization to ensure that it runs efficiently and with a high level of transparency. It is evident that with such level of involvement and responsibilities the corporate secretary is very different from a personal assistant.
In other words, this official plays a significant role in providing a company with legal support and ensuring its compliance with governance standards, which means that the contributions of a corporate secretary are much greater and play a much more important role than many people can imagine.
Myth 2: Anyone Can Replace a Corporate Secretary’s Role
A number of business people have a stereotype that the position of the corporate secretary can be occupied by any employee of the company and, in any case, does not require special training. Consequently, this belief could create many problems for the company in the long term.
Fact: It goes without saying that a corporate secretary should have some specific knowledge and experience.
The truth of the matter is that the job of a corporate secretary requires a set skill set and knowledge of corporate regulations, governance, and compliance. A corporate secretary is not just an ordinary worker within the company, but he or she is an important officer whose main role is to ensure that the company complies with both legal requirements as well as the corporate measures that are put in place.
The skills that are necessary for a corporate secretary include the knowledge of the legal requirements that govern the company’s operations. A key requirement is to know about the changes in legislation and make sure that the company’s policies and procedures conform to these changes. This means that it has to be professional, with a constant focus on updating and the ability to learn about the current rules that are in force.
In addition, corporate secretaries manage important functions such as drafting and submitting legal documents, coordinating and archiving board meetings and managing corporate documents. These responsibilities demand accuracy, mastery of law and detail. Delayed filings or false statements may lead to fines, lawsuits and harm the reputation of the company.
Also, corporate secretaries are usually known to be trusted associates of the board of directors, who offer guidance on various governance issues. It is an important advisory function that enables the board to make decisions within legal frameworks, especially where there are grey areas.
When a company appoints a new corporate secretary who does not possess sufficient experience, it exposes the entity to increased compliance and governance deficiencies. The position must be occupied by a person who not only has the necessary knowledge but also wants to work towards achieving the highest principles of business ethic.
Myth 3: Corporate Secretaries Are Only Needed to Start a Company
A common misconception is that the role of a corporate secretary is only crucial during the initial stages of a company's formation. Some believe that once the company is set up, the need for a corporate secretary diminishes.
Fact: Corporate Secretaries Are Essential for Ongoing Compliance and Governance
This is the reality that corporate secretaries are involved in the constant and crucial activity throughout the entire life cycle of enterprises. They specialise in much more than just formation and incorporation services.
Company secretaries make sure that the company does not violate any law throughout its operations as a going concern. This involves registering and submitting annual returns within the specified legal requirements, keeping proper records of the company and ensuring the company follows the set corporate governance structures. These constant compliance activities are important for avoiding legal troubles and remaining a penalty-free organization.
In addition, they are important in enhancing proper communication within the company since they act as corporate secretaries. They also attend and record board meetings, take minutes, and make sure the final decision is well recorded. These developments ensure that the company is transparent and accountable, a factor that is vital in the running of the company and ensuring that shareholders and other stakeholders have faith in the company.
They also have the responsibility of coordinating matters within the firm for instance matters relating to changes in the directorship, shareholders register and the constitution of the firm. We rely on their advice for the proper implementation of these changes in accordance with legal provisions and submission of requisite documentation.
In other words, the function of a corporate secretary is strategic and not only limited to the establishment stage but also throughout the lifespan of a firm. They keep the company clear of legal issues, uphold sound corporate governance and governance structures and facilitate the smooth running of the company.
Myth 4: Every Singapore-Incorporated Company Needs a Full-Time Secretary
There is a misconception that every Singapore-incorporated company must hire a full-time corporate secretary to meet regulatory requirements. This belief can deter small businesses and startups from incorporating due to perceived high costs.
Fact: Corporate Secretarial Services Can Be Outsourced
In fact, there are no statutory obligations for companies in Singapore to have a full-time corporate secretary. Instead, they have the advantage of outsourcing corporate secretarial services to professional firms instead. It is especially useful for small businesses and startups who may not be able to afford a permanent employee for the position.
A notable benefit of outsourcing corporate secretarial services is that it renders the services of highly qualified secretaries who are conversant with the laws of Singapore. They are also capable of handling all compliance services including the preparation of annual returns, statutory registers and compliance with corporate governance requirements. This structure ensures companies are able to fulfill their legal requirements without having to employ a dedicated corporate social responsibility officer.
In addition, outsourced corporate secretarial services come with the benefits of scalability. In this way, the level of the support provided can be changed to meet the needs of the company as it develops. This approach guarantees the company’s compliance during each of its stages of growth while avoiding internal organizational changes all the time.
When companies outsource their corporate secretarial services, they will be able to manage their core business effectively while at the same time observing all legal requirements. This model is effective and relatively cheap, thus refuting the argument that every Singapore-incorporated company requires a full-time corporate secretary.
Explore More Corporate Solutions with Velarys Corporate Services
A company secretary does not need a law degree to be an effective officer, but they must be tech-savvy and knowledgeable about the latest software that streamlines their responsibilities. While companies can hire secretarial services internally, outsourcing is a viable option. Velarys Corporate Services offers comprehensive solutions for those looking to outsource their secretarial needs in Singapore.
At Velarys Corporate Services, we provide a wide range of corporate solutions, including secretarial services. Our professional team collaborates closely with you to help manage and grow your business efficiently. Contact us today to explore your options. Call us at —————, or visit our website at www.velarys.com.