The Accounting and Corporate Regulatory Authority (ACRA) requires every company in Singapore to appoint a corporate secretary within six months of the company’s incorporation. The company secretary will be the chief officer in handling various administrative tasks and ensure that the company abides by the regulations.
There are times when the company may contemplate changing its corporate secretary. From the reasons why your company needs to change its incumbent corporate secretary to the importance of appointing an excellent one, this article will serve as a simple guide.
Reasons as to Why a Company May Change its Corporate Secretary
There are several reasons why a company may decide or need to change its company secretary. The following are some of these reasons:
- The incumbent corporate secretary does not have the capability for effective communication.
- The incumbent company secretary failed to give the appropriate information and advice with regards to the current compliance law and regulations.
- The company secretary demands unreasonable charges, apart from the yearly retainer pay.
- The current secretary is not capable of giving ancillary services that the company needs, such as the registered office.
The reasons mentioned above are some of the common reasons. Several other reasons can trigger the company’s decision to release its current corporate secretary and appoint a new one.
How to Change your Corporate Secretary
The new company secretary that the company wishes to appoint should be capable of helping the company in preparing the required documents, including:
- Director’s Resolution to record the resignation of the former corporate secretary as well as the appointment of the new one
- Resignation letter of the former secretary
- Form 45B for the current secretary, which shows his or her consent in taking up the position of a corporate secretary
- Lodgment to inform the ACRA about the resignation and appointment of corporate secretary
Although the former secretary can remain in the company, Director Resolution allows the new secretary to prepare a lodgment with ACRA. Moreover, the latter can help the company to prepare the termination letter and arrange for the gathering of documents from the former.
If the company doubt the competency of its former secretary, especially when it comes to handling the company’s registers and required filings, the company may request that the new company secretary conduct a due diligence exercise to make sure that the regulatory records of the company are in proper order.
Still, the biggest challenge that the company may need to face when changing its secretary is the refusal of the incumbent company secretary to cooperate, especially if the said secretary has a bad relationship with the company or incompetent when it comes to submitting a timely response.
Companies need to bear in mind the possibility of such circumstances to arise, which may lead to the postponement of the required filings with IRAS or ACRA. Such delays may cause the relevant authority to impose penalties on the companies.
Hence, to avoid undesirable situation from happening, the company should avoid changing its secretary when the statutory deadlines are fast approaching. It needs to make sure that the whole changing process would be completed before the deadlines.
Why is it Important to have a Reliable Corporate Secretary
The corporate secretary’s primary roles and responsibilities are to make sure that the company complies with every relevant regulatory requirement following the Companies’ Act. Companies that fail to comply with the law will have to suffer the penalties and in the worst-case scenario, may need to answer to the court’s summon. In fact, in April 2014 alone, ACRA had issued about ten thousand summonses to companies and directors that have violated or do not comply with the Companies’ Act’s regulations.
A company that has a competent and trustworthy company secretary will be free from worrying about the failure to perform the necessary legal compliance and having to deal with dire consequences due to such incompliances.
Getting Help from Experts when Changing a Company Secretary
Changing a company secretary can be a challenging task. Nonetheless, getting help from companies that offer corporate secretary services in Singapore can help with the whole ordeal and make sure that the process is completed smoothly.