Understanding the Role of a Company Secretary in Malaysia
Every company incorporated in Malaysia must appoint a company secretary within 30 days of its incorporation. This is not merely a formality—the company secretary plays a vital role in ensuring corporate governance and regulatory compliance. Under the Companies Act 2016, the company secretary serves as the primary liaison between the company, its directors, shareholders, and the Companies Commission of Malaysia (SSM).
Whether you are a business owner, aspiring company secretary, or simply seeking to understand Malaysian corporate law, this comprehensive guide covers everything you need to know about company secretary duties and responsibilities in Malaysia.
Legal Requirements Under the Companies Act 2016
Mandatory Appointment
Section 235 of the Companies Act 2016 mandates that every company must have at least one company secretary who has their principal or only place of residence in Malaysia. For public companies and companies with share capital exceeding a prescribed threshold, additional requirements may apply.
If a company fails to appoint a company secretary within the stipulated 30-day period following incorporation, the company and every officer who is in default commit an offence and may be subject to penalties.
Qualification Requirements
Section 236 of the Companies Act 2016 sets out the qualifications required to act as a company secretary in Malaysia. A person must be one of the following:
A member of a professional body prescribed by the Minister, which includes the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA), the Malaysian Institute of Accountants (MIA), the Malaysian Bar, the Malaysian Institute of Certified Public Accountants (MICPA), the Sabah Law Society, or the Advocates Association of Sarawak.
Alternatively, a person licensed by SSM under Section 241 of the Companies Act 2016 may also serve as a company secretary. This licensing pathway is available to individuals who may not hold membership in the prescribed professional bodies but meet other criteria established by SSM.
Core Statutory Duties of a Company Secretary
Maintaining Statutory Registers and Records
One of the fundamental duties of a company secretary is to maintain the company's statutory registers. These include the register of members, register of directors, register of secretaries, and register of charges. These registers must be kept up to date and made available for inspection as required by law.
The company secretary must ensure that any changes to these registers are recorded promptly and accurately. Failure to maintain proper records can result in penalties for the company and its officers.
Filing Requirements with SSM
The company secretary is responsible for ensuring timely lodgement of documents with SSM. Key filings include annual returns, notification of changes in directors or secretaries, changes in registered office address, allotment of shares, and any amendments to the company's constitution.
Each filing has prescribed deadlines, and late submissions attract penalties. For example, the annual return must be lodged within 30 days of the company's anniversary of incorporation.
Board and Shareholder Meetings
A company secretary plays a central role in organising and documenting board meetings and shareholder meetings. This includes preparing meeting agendas, issuing notices of meetings within the required timeframes, ensuring quorum requirements are met, recording accurate minutes of proceedings, and maintaining the minutes book.
For annual general meetings (AGMs), the company secretary must ensure that proper notice is given to all shareholders entitled to attend and that all resolutions are properly recorded and, where necessary, lodged with SSM.
Advising Directors on Compliance
The company secretary serves as the primary advisor to directors on matters of corporate governance and regulatory compliance. This includes advising on directors' duties under the Companies Act 2016, ensuring the company complies with its constitution, monitoring compliance with listing requirements for public listed companies, and keeping directors informed of changes in relevant laws and regulations.
Practical Responsibilities in Day-to-Day Operations
Corporate Governance
Beyond statutory duties, company secretaries contribute to good corporate governance by ensuring transparency in company operations, facilitating communication between the board and shareholders, assisting in the implementation of corporate policies, and supporting the board in decision-making processes.
Custody of Company Seal and Documents
Where a company maintains a common seal, the company secretary is typically responsible for its custody and proper use. Additionally, the secretary ensures the safekeeping of important corporate documents, including the certificate of incorporation, constitution, and share certificates.
Correspondence with Regulatory Authorities
The company secretary handles correspondence with SSM and other regulatory bodies. This includes responding to queries, submitting required documentation, and ensuring the company meets all regulatory obligations.
Consequences of Non-Compliance
Failure to comply with company secretary duties and statutory requirements can result in significant consequences. These include financial penalties imposed by SSM, prosecution of the company and its officers, striking off of the company from the register, personal liability for directors and officers, and reputational damage to the business.
Under the Companies Act 2016, penalties for various offences range from fines to imprisonment, depending on the nature and severity of the breach.
Practical Tips for Businesses
To ensure compliance and effective corporate governance, businesses should consider the following practical tips. First, engage a qualified and experienced company secretary who understands your industry. Second, establish clear communication channels between the company secretary and the board of directors. Third, implement a compliance calendar to track filing deadlines and statutory obligations. Fourth, conduct regular reviews of statutory registers and corporate documents. Fifth, invest in corporate secretarial software or services to streamline compliance processes.
Choosing the Right Company Secretary
When selecting a company secretary, consider their professional qualifications and whether they are licensed by SSM, their experience with companies of similar size and industry, their understanding of current regulatory requirements, their ability to provide proactive advice on corporate governance matters, and their availability and responsiveness to your company's needs.
Many businesses, particularly small and medium enterprises, engage corporate secretarial firms to fulfil this role. This approach provides access to expertise while ensuring continuity of service.
Conclusion
The company secretary is an indispensable part of any Malaysian company's corporate structure. Far from being a mere administrative role, the company secretary ensures that the company operates within the bounds of the law, maintains good governance practices, and fulfils its obligations to shareholders, regulators, and other stakeholders.
Understanding the duties and responsibilities of a company secretary is essential for directors, business owners, and anyone involved in corporate management in Malaysia. By ensuring proper appointment and empowering your company secretary to perform their role effectively, you protect your company from regulatory penalties and contribute to its long-term success.
Disclaimer
This article is intended for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. The information provided may not reflect the most current legal developments and is not guaranteed to be complete, accurate, or up to date. For advice on your specific circumstances, please consult a qualified legal professional or licensed company secretary in Malaysia.