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Should I Switch My Corporate Secretary Partner?

Viewed by 2,719 Smart Towkays

Jun 20, 2024

Should I Switch My Corporate Secretary Partner? SG

This article is co-written by Smart Towkay and Grof Singapore.

Running a small business in Singapore is an exciting and challenging endeavour. However, navigating the intricacies of corporate compliance can quickly morph from thrilling to tedious. That's where your trusty corporate secretary partner steps in, ensuring you adhere to regulations while you focus on scaling your venture. But what happens when this partnership starts feeling less than, well, partner-like? Is it time to switch to an experienced corporate service provider as your corporate secretary partner to ensure your company’s compliance with Singapore company law and to better guide the directors of the company?

This blog post delves into the world of corporate secretaries, dissecting the signs that might indicate a switch is necessary and guiding you through the process of finding the perfect fit for your company's secretarial services. So, buckle up, entrepreneurs and small business owners, because we're about to help you make an informed decision that secures your company's smooth sailing amidst the regulatory waves. Whether you're just starting out or looking to switch, having a reliable and efficient company secretarial services partner can greatly benefit your business and fulfil your corporate secretarial needs with greater convenience and ease.

What is the role of a corporate secretary in a company?

Before diving into red flags, let's solidify our understanding of a corporate secretary's role. Think of them as your legal guardian angel, meticulously ensuring your company adheres to Singapore's Accounting and Corporate Regulatory Authority (ACRA) regulations. They handle a crucial set of tasks, including:

Maintaining statutory registers: our corporate secretary meticulously updates and safeguards these records.
Filing annual returns: Every year, companies must submit specific information to ACRA. Your partner takes care of this, ensuring timely and accurate submissions.
Convening and documenting meetings: Board meetings and general meetings are essential for decision-making. Your corporate secretary ensures proper procedures are followed and minutes are accurately recorded.
Coordinating with shareholders: The company secretary facilitates communication with shareholders, issues documents on capitalisation and rights, tracks changes in the register of members, investigates beneficial ownership, and maintains shareholder relations.
Liaising with ACRA: Need clarification on regulations? Your partner acts as your bridge to ACRA, ensuring smooth communication and compliance.

Essentially, your corporate secretary partner keeps your company operating within the legal framework, freeing you to focus on growing your business.

Signs You Might Need a New Corporate Secretary Partner

Now, onto the not-so-ideal scenarios. Here are some telltale signs that your current corporate secretary partnership might be due for a refresh:

Missed deadlines: Compliance is crucial, and missed deadlines can incur penalties and reputational damage. If your partner consistently misses filing deadlines, it's a red flag.
Communication breakdowns: Clear and timely communication is vital. Struggling to reach your partner, receiving vague responses, or experiencing information silos are all reasons for concern.
Lack of proactivity: A good corporate secretary goes beyond the bare minimum. Proactive advice on changes in regulations or upcoming obligations demonstrates genuine care for your company's well-being.
Limited expertise: As your business evolves, your needs might change. If your partner's expertise doesn't cater to your evolving requirements, it might be time to explore other options.
High fees with low value: Feeling like you're overpaying for subpar service? Don't settle! Explore the market and compare prices to ensure you're getting the best value for your investment.

These are just a few pointers. If you find yourself nodding along to several of these, it might be time to consider switching partners.

Considerations Before Making the Switch

Before hitting the "search" button, take a moment to reflect on your specific needs. This introspection will guide you towards the right partner:

Company size and complexity: The number of shareholders and the complexity of your business impact your secretarial needs.
Industry regulations: Different industries have specific compliance requirements. Choose a partner with expertise in your sector.
Budget: Be realistic about your budget and explore options that offer tailored services within your means.

By having a clear understanding of your requirements, you'll be able to attract the perfect corporate secretary partner who seamlessly integrates into your business ecosystem.

How to Choose the Right Corporate Secretary Partner

Choosing the right corporate secretary partner is a crucial step in ensuring the smooth operation of your company. Consider the following factors when making your selection.

Criteria Stipulated by ACRA

ACRA of Singapore sets the criteria for corporate secretarial services. When choosing a corporate secretary, ensure they meet the following criteria as stipulated by ACRA:

They must be a natural person, either a resident of Singapore or a holder of an employment pass/entrepass.
The corporate secretary needs to have extensive knowledge and experience in compliance duties, corporate governance, and local regulations.
ACRA specifies statutory obligations that the corporate secretary must fulfil, such as filing annual returns, maintaining statutory registers, and providing advisory services.
ACRA specifies that the sole director of a company and the company secretary cannot be the same person.

The Process of Changing Your Corporate Secretary in Singapore

Switching your corporate secretary partner in Singapore is a straightforward process, but it's essential to follow the proper procedures to ensure a smooth transition. Here's a step-by-step guide:

Step 1: Identify a Suitable Replacement

When selecting a new corporate secretary, it's crucial to ensure they meet the legal requirements in Singapore. This includes being a local resident and not the sole director of the company. Additionally, it's preferable to choose a secretary with relevant qualifications, such as being a member of the Singapore Institute of Public Accountants (ISCA) or the Singapore Association of the Institute of Chartered Secretaries and Administrators (CSIS).

Step 2: Obtain the Resignation of the Existing Secretary

If your current secretary is willing to resign, you'll need to obtain a formal resignation letter from them. This can be done by communicating the issues that necessitate their removal and reaching a mutual agreement.

Step 3: Appoint the New Corporate Secretary

To officially appoint the new corporate secretary, you'll need to pass a board resolution and have the new secretary complete a Form 45B, indicating their consent to take on the role. These documents, along with the former secretary's resignation letter, must then be filed with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore.

Step 4: Facilitate a Smooth Transition

The new corporate secretary should work closely with the outgoing secretary to ensure a seamless handover of all corporate records, documents, and files. This due diligence process helps to maintain the integrity of your company's records and minimises the risk of any disruptions.

Conclusion

Switching company secretaries requires careful consideration, but it can be a game-changer for your business. By identifying the need for a change, understanding your requirements, and diligently searching for the ideal partner, you pave the way for a smooth transition and long-term success. Remember, a competent and responsive corporate secretary can be your silent hero, freeing you to focus on what you do best: growing your business.