COMPANY SECRETARY

PREPARED BY:
SITI MARIAM ATAN
SENIOR LECTURER
LAW DEPARTMENT
UiTM CAWANGAN JOHOR
LEARNING OUTCOMES

Students shall be able to:

1) Explain the qualifications and the procedure for
the appointment of a company secretary, the
duties and powers of a company secretary, and
when a person may be disqualified to act as a
company secretary.
2) Apply the law in solving certain problem.
CONTENT
1 INTRODUCTION

2 QUALIFICATION OF DIRECTORS

3 DISQUALIFICATION OF DIRECTORS

4 APPOINTMENT OF DIRECTORS

5 REMOVAL

6 RESIGNATION

7 DUTIES AND RESPONSIBILITIES

Introduction

 Every company is required to appoint at least one

company secretary who ordinarily resides in Malaysia -
section 235 of the Companies Act 2016.
 The company secretary is considered as an officer of the
company – section 2(1).
 Panorama Development (Guilford) Ltd v Fidelis
Furnishing Fabrics Ltd (1971)
 The court said that the secretary is the chief administrator
of the company and thus, has the ostensible authority to
bind the company.
Introduction

 Section 240 - the office of the secretary of the company

shall not be left vacant for more than 30 days at any
one time. This section reinforce the importance of the
company secretary’s office.
Qualifications of a Company Secretary

1) Natural person of 18 years and above.

2) Residence in Malaysia
3) Member of prescribed body or licensed by the Registrar
of Companies.
4) Has obtained a practising certificate.
Qualifications of a Company Secretary
1) Natural Person of 18 years and above
 Section 235(1) – a company shall have at least one
secretary who shall be:
a natural person
18 years of age and above
A citizen or permanent resident of Malaysia
Who shall ordinarily reside in Malaysia by having a
principal place of residence in Malaysia.
 Thus, only human being can be a company secretary.
 A corporation and a firm cannot be a company secretary.
Qualifications of a Company Secretary
 There are companies which outsource their company
secretarial functions to a management company or firm.
In these cases, the company will appoint a person
nominated by the management company or firm to be its
company secretary.
2) Residence in Malaysia
 Section 235(1) – the company must have at least one
company secretary who is a citizen or permanent resident
of Malaysia.
 He must ordinarily reside in Malaysia by having his principal
place of residence in Malaysia.
Qualifications of a Company Secretary
 If a company have more than one company secretary, all
of them must fulfil the residency requirement.
 Fong Poh Yoke v The Central Construction Co (M) Sdn Bhd
The word “residence” means the person must be residing in
the place with some degree of continuity.
 He may have two places of residence so long as he
ordinarily resides in Malaysia.
Qualifications of a Company Secretary

3) Member of prescribed body or licensed by the Registrar

of Companies.
 No person shall act as a secretary of a company unless he
is a member of a prescribed body or licensed by the ROC
– section 235(2)
 The prescribed bodies are listed in the Fourth Schedule to
CA 2016 as well as those prescribed by the Minister by
notification in the Gazette.
 Organisations listed in the Fourth Schedule:
Malaysian Association of the Institute of Chartered
Secretaries and Administrators (MAICSA)
Qualifications of a Company Secretary
Malaysian Institute of Accountants (MIA).
Malaysian Bar Council.
Malaysian Association of Company Secretaries (MACS)
Malaysian Institute of Certified Public Accountants (MICPA).
Sabah Law Association.
Advocates’ Association of Sarawak.
 A member of any of the above bodies may act as a
company secretary without obtaining a licence to
practice from the ROC.
Qualifications of a Company Secretary
 A person who is not a member of any of the prescribed
bodies but with the necessary skills and knowledge may
act as a secretary of a company if he is licensed by the
ROC under section 20G of the Companies Commission of
Malaysia Act 2001 for that purpose. He is then known as a
licensed company secretary.
 Has obtained a Practising Certificate
 Section 241 – “any person who is qualified to act as a
secretary and who desires to act as a secretary shall be
registered under this section before he can act as a
secretary”.
 Application for practising certificate may be made to the
ROC.
Qualifications of a Company Secretary
 Section 241(5) – a person who has been appointed a
secretary of a company but has yet to register with the
ROC may remain as the secretary of the said company for
a period of 12 months. At the end of the 12th month, he will
be disqualified as a secretary.
 Once section 241 comes into force, a person even though
a member of a prescribed body or licensed by the ROC,
will not be qualified to be appointed a secretary until he
has obtained his practising certificate.
 ROC may revoke the practising certificate of a person if he
has failed to act honestly or use reasonable diligence in
the discharge of his duties as secretary – section 238(2).
Qualifications of a Company Secretary

Dual positions.
A company may appoint its director to act as its
company secretary.
However, the person who is holding the dual positions
as director and company secretary cannot act in both
capacities at the same time.
Section 242: “A person is prohibited to act in a dual
capacity as both a director and a secretary in a
provision requiring or authorising a thing to be done by
a director and a secretary”.
Qualifications of a Company Secretary
Illustration :
Alan is a director as well as the secretary of ABC Sdn Bhd.
A document requires the signatures of director and
secretary. Alan cannot sign the document both in his
capacity as director and secretary of ABC Sdn Bhd.
Disqualification

Section 238:
Characteristics of a person who is disqualified to act as a
company secretary:
An undischarged bankrupt;
Convicted of an offence in connection with one of the
following offences:
Offence in connection with the promotion, formation
or management of a company;
Offence involving bribery, fraud or dishonesty;
Breach of fiduciary duty as director – failure to
exercise reasonable care, skill and diligence (section
213);
Disqualification
Breach of fiduciary duty as a nominee director, that is
acted in the best interest of his nominator instead of
the company (section 217);
Improper use of the company’s property, company’s
information, his position, corporate opportunity, or
conflict of interest (section 218);
Substantial value transaction involving director or
substantial shareholder (section 228); or
Company’s failure to keep proper accounts, or
wrongful trading (section 539).
ceased to hold a practising certificate issued by the ROC.
Disqualification
A person who is disqualified as a company secretary
may continue to act in such capacity with the approval
of the court. If he fail to do so, he and every director
who knowingly permits him to act in such capacity will
be guilty of an offence – section 238(3).
Appointment
Section 236(3) – a company appoints a person as its
secretary only if he is qualified and is not disqualified.
He must also have given his written consent.
 First Secretary
The propose first secretary may be given in the
application for incorporation of the company.
Section 18(5) – “The person named in the statement
as a director or a secretary, if any, shall be deemed
to have been appointed to that office.”
The board of directors is required to appoint the first
secretary within 30 days from the incorporation of the
company – section 236(2).
Appointment

 Subsequent Secretaries
 The appointment of a subsequent company secretary is
made by the board of directors. The board shall also
determine the terms and conditions of his appointment
– section 236(1).
Removal

 Boards of directors may remove a company

secretary from his office in accordance with the
terms of his appointment or constitution - section
239.
 The removal of secretary and the appointment of
another person to replace him will usually be done
simultaneously – section 240.
Resignation

 Unless there is a contract to the contrary, the company

secretary may resign at any time by submitting a notice
of his intention to the board of director – section 237(1)
 If none of the directors of the company can be
communicated with at the last known residential
address, the secretary may notify the Registrar of his
intention to resign – section 237(2).
 He ceases to be the secretary on the expiry of 30 days
from the date of the notice or the period specified in the
company’s constitution or terms of his appointment –
section 237(3)(a).
Resignation

 In the case where the secretary resign by notifying his

intention to the Registrar, he shall cease to be the
secretary on the expiry of 30 days from the date of the
notice to the Registrar – section 237(3)(b).
 The resignation shall not take effect according to the
rule in section 237(3) if the company’s constitution or the
terms of appointments stipulate that the resignation shall
take effects only upon the directors resolving to accept
the resignation.
 The office of the company secretary cannot be left
vacant for more than 30 days – section 240.
Resignation

 There are instances when the company secretary is not

a fulltime staff of the company. He is retained by the
company to handle only the secretarial matters of the
company. There is a contract for service between him
and the company. He is not in constant contact with the
company or stationed in the company’s premises.
Duties And Responsibilities Of A Company Secretary

 Company secretary handles the administrative matters

of the company
 Re Maidstone Buildings Provision Ltd
Held: Company secretary handles the administrative , not the
management, matters of the company
1) Advise on registration and governance of a Company
 Even though a person has the option to incorporate a
Company on his own, it is always better to appoint a
licensed Company Secretary to initiate the incorporation
application. This is to avoid any complication during the
process itself.
Duties And Responsibilities Of A Company Secretary

A Company Secretary is also in charge to advise a

client on their corporate restructure, mergers,
acquisition, good corporate governance as well as
the procedure to strike off or wind up of a Company.
(https://www.paulhypepage.my/core-duties-of-
company-secretary-in-malaysia/)

2) Document meeting minutes and resolutions

In accordance with Companies Act 2016, a Private
Limited Company (Sdn. Bhd.) is no longer compulsory
to conduct an Annual General Meeting (AGM).
Duties And Responsibilities Of A Company Secretary

 However, it is not the case for a Public Limited Company

(Berhad). Hence, a meeting conducted by the Board of
Directors must be attended by the Company Secretary.
 They will need to ensure:
Preparation of meeting agenda is done accordingly
Ensure meeting are properly called, constituted, and
carried out in accordance with the law of meeting
After meeting is done, a Company Secretary is
responsible to prepare the minutes and follow up on the
decision made as instructed.
Duties And Responsibilities Of A Company Secretary

Once a decision is made, a Company Secretary

may then prepare the Board Resolution for
signing and will be taken as evident that a
Company has conclude a decision.
(https://www.paulhypepage.my/core-duties-of-
company-secretary-in-malaysia/)
At the instruction of the board of directors, the
company secretary issues the notice of
company’s meeting and attend the meeting as
recorder of the minutes.
Duties And Responsibilities Of A Company Secretary

The secretary of the company shall record every

declaration made under this section in the
minutes of the meeting at which the declaration
was made – Section 221(8).
Section 221 (1) - every director of a company
who is in any way, whether directly or indirectly,
interested in a contract or proposed contract
with the company shall, as soon as practicable
after the relevant facts have come to the
director’s knowledge, declare the nature of his
interest at a meeting of the board of directors.
Duties And Responsibilities Of A Company Secretary

In this situation, secretary is required to record

such declaration in the minutes of meeting.
There is possibility that sole director or last remaining
director has died or become unsound mind or even
been disqualified.
209(3)-For the purpose of appointing a new director,
in the event of the office of a sole director or the last
remaining director of the company being vacated
due to the circumstances referred to in paragraph
208(1)(d), (e), (f) or (g), the secretary shall, as soon as
practicable, call a meeting of the next of kin, other
personal representatives or a meeting of members, as
the case may be.
Duties And Responsibilities Of A Company Secretary

The attendance of the secretary at the

company’s meetings is by invitation or by order to
record the minutes of the meeting. His presence is
not counted in the quorum. He is not entitled to
cast a vote.
Duties And Responsibilities Of A Company Secretary

3) Maintenance Of Registered Office

The secretary of the company may be a full-time
employee of the company. In such instance, the
company’s registered office is usually at the
company’s place of business.
A company may use secretarial services provided by
secretarial firm or company. Company may use
secretarial firm’s place of business as its registered
office
Section 46(1) - A company shall at all times have a
registered office in Malaysia to which all
communications and notices may be addressed.
Duties And Responsibilities Of A Company Secretary

Section 46 (2) - The registered office shall be open

and accessible to the public during ordinary business
hours.
It is important for the secretary or his agent to be in
the office during ordinary business hours to accept
communications and notices served on the registered
office as well as make available for inspection the
company’s registers and books pursuant to the Act.
Section 48 – the company shall provide proper
facilities to enable the documents and records to be
inspected.
Duties And Responsibilities Of A Company Secretary

In this regard, section 47 specify that the minutes of

board meeting and resolutions must be kept at the
registered office – section 47(2).
Section 47(1) (e) - minutes of all meetings of members
and resolutions of members;
Section 47(1)(f)- minutes of all meetings and
resolutions of the Board and committees of the Board;
These are statutory requirements and usually been
kept by company secretary that been appointed by
the company
Duties And Responsibilities Of A Company Secretary

Other documents such as the notice of registration,

constitution, certificates issued by the ROC, register
book, minutes of member’s meeting, written
communication to members, directors’ service
contracts, financial statement etc. may be kept at
registered office or another place.
If they are kept in another place, notice must be
given to ROC within 14 days of the change – section
47(3)
Duties And Responsibilities Of A Company Secretary

4) Ensure Company details are up to date

The Company details such as directors, shareholders,
shares as well as constitution are up to date. If there
are any changes occurs, a Company Secretary will
need to notify SSM within 30 days of a resolution is
passed.
Duties And Responsibilities Of A Company Secretary

5) Record Financial Year End (FYE) of a Company

The financial year end date is basically when the
Company closes its financial annual account. Once
the board has decided on the Company FYE, the
Company Secretary should be notified for them to
prepare a resolution. This is normally done during
Annual General Meeting (AGM).
(https://www.paulhypepage.my/core-duties-of-
company-secretary-in-malaysia/)
Duties And Responsibilities Of A Company Secretary

6) Lodge Of Annual Compliance As Per Required By SSM

The Companies Commission of Malaysia –
Suruhanjaya Syarikat Malaysia (SSM) has gazetted for
each Company Secretaries to lodge two items:
Annual return – filed every anniversary
(incorporation) date annually
Financial statement (audited / unaudited) – filed
within 6 months after FYE
These documents must be lodged at the appointed
date. There will be penalties for those who failed to
adhere to the requirement stated by Companies Act
2016. Company Secretaries must ensure strict
compliance with the datelines furnished.
Duties And Responsibilities Of A Company Secretary

A company secretary plays an important role in an

organisation as the prime duty is to oversee the
statutory compliance of the company. The role of a
company secretary is as important as the other top-
tier officers in the organisation. This role is in addition to
the company secretary playing a key role in the
administrative tasks relating to corporate matters.
Generally, the company secretary is considered as a
confidant of the company and counsellor to the
directors and members of senior management.
( https://www.paulhypepage.my/core-duties-of-
company-secretary-in-malaysia/)
Duties And Responsibilities Of A Company Secretary

( https://www.paulhypepage.my/core-duties-of-
company-secretary-in-malaysia/)
Among documents which are required to be lodged
as well:
The particulars of directors, mangers and secretaries
- Section 58; and
The company’s annual returns – Section 68
If the company fails to comply, the company and
every officer of the company, including the company
secretary, shall be guilty of an offence under the Act.
Duties And Responsibilities Of A Company Secretary

7) Maintenance Of Register Member

Section 50 - every company is required to keep a
register of members. The particulars of each member
and the number of shares held, and amount paid
must be entered into register
Section 54(1) - the register of members and its index
shall be kept at:
The company’s registered office;
Another office of the company in Malaysia; or
The office of person who maintains the register in
Malaysia
Duties And Responsibilities Of A Company Secretary

Section102(1) imputes that duty on secretary to

ensure the register of members is properly kept and
maintained regularly.
Failure to do so, the company secretary commits an
offence and is liable to fine - Section102(2).
REFERENCES

 Chan Wai Meng, Essential Company Law in Malaysia, Navigating the

Companies Act 2016, Sweet & Maxwell.
THANK YOU