BUSINESS ARTICLE

The critical role of a company secretary at each stage of the business lifecycle

The critical role of a company secretary at each stage of the business lifecycle Banner

The critical role of a company secretary at each stage of the business lifecycle

boardroomsuperadmin Business Insights, Corporate Secretarial

In today’s dynamic and highly competitive business landscape, companies operating in the Asia-Pacific region face an array of challenges at every stage of their lifecycle. From the early stages of incorporation through to periods of growth and even cessation, the need for effective business management is paramount.

For business leaders who are tasked with steering their organisation through difficult times, the support of a skilled and experienced company secretary can prove invaluable.

In this article, we speak to BoardRoom Singapore’s Head of Corporate Secretarial, Eunice Hooi and Director of Corporate Secretarial Services, Kevin Cho, about the critical role of the company secretary and how outsourced company secretarial services can benefit your business at each stage of its journey.

The importance of a company secretary in Singapore

For businesses registered in Singapore, the appointment of a local resident company secretary is mandatory to comply with business regulations.

“Under the Singapore Companies Act, every company must appoint a company secretary within six months of incorporation,” Kevin explains. “Furthermore, the office of a company secretary must not be vacant for more than six months.”

Company secretaries undertake a wide range of corporate advisory duties across multiple business functions. As an officer of the company, they play a key role in ensuring that the company complies and thrives. Therefore, the professional qualifications and track history of a company secretary are vital.

Two key focus areas for company secretaries in Singapore are as follows:

1. Corporate governance

A good company secretary will help champion corporate governance in all aspects of a business, with the view to promote operational integrity, enhance performance and maximise value for stakeholders. This involves ensuring all relevant corporate governance standards are met (including, for public companies, the listing rules of the Singapore Stock Exchange).

“At BoardRoom, we maintain a high standard of corporate governance because we advise our clients on what the best practices in the market are,” Kevin says.

In practice, your company secretary will start by recommending the baseline corporate governance processes that need to be implemented. They will then work with the board of directors and management to enhance the governance framework by considering subsequent policies and procedures adopted by the organisation

As corporate governance is not a one-time exercise, but rather an ongoing process, your company secretary will continually assess your organisation’s corporate governance and suggest improvements to meet evolving standards.

Corporate governance with a Corporate Secretary

2. Regulatory compliance

As part of their duties, company secretaries help to ensure compliance with local and regional regulatory requirements as they evolve. They provide support with meeting regulatory requirements within the prescribed deadlines, whether this be holding your annual general meeting, filing your annual return or updating your statutory registers.

Effective company secretaries also take the initiative to engage with regulatory authorities on a regular basis and participate in public consultations on regulatory changes.

“This ensures that we know what is going on in the regulatory landscape and for some public consultation papers, we obtain the views and feedback from our clients on these proposed regulatory changes,” Eunice says. “We gain a solid understanding of the changes and then help our clients to achieve compliance and get prepared.”

Failure to comply with regulations may result in legal, reputational, and financial repercussions for a business. To safeguard your organisation, it is important to engage a company secretary who takes compliance seriously and has the knowledge and experience to ensure your organisation observes it.

Challenges during incorporation

Establishing a solid foundation is crucial during company incorporation. This means creating an appropriate corporate structure and business model that allows for sustainable cash flow and consistent growth.

Common challenges to expect at the start include:

Ensuring regulatory compliance
Navigating the local regulatory requirements of a new region can be daunting. A company secretary with extensive regulatory knowledge can ensure your new entity satisfies all requirements to minimise the risk of non-compliance.
Choosing an appropriate set-up
Your company secretary can explain the different business structures available in Singapore and advise you on the best set-up for your entity, depending on your objectives (e.g. limited liability company, holding company or trading company). If your company secretary is part of a larger organisation with tax expertise, they will be able to provide guidance on potential tax implications and ensure your company is optimally structured for tax efficiency and manage any potential tax risks.
Maximising the benefits of foreign investment
If you are expanding into Singapore, your company secretary will ensure your operating model allows for tax-efficient profit extraction.

Challenges during growth

As companies expand, they face increased complexity. Larger organisations have multiple shareholders and stakeholders to manage, while smaller businesses may have less experience and knowledge to draw on.

Common challenges in this phase include:

  • Fostering a shared vision – Various stakeholders may have conflicting ideas about the growth plans for the company. Company secretaries can facilitate communication between stakeholders to pave a harmonious path forward.
  • Disagreements between shareholders – The company secretary can document issues tabled for discussion at board meetings. In his or her capacity as an impartial party, the company can then rely on the minutes of the meetings when taking steps to resolve the issues.
  • Acquiring new business – In the acquisition of a new business, a company secretary can advise and assist on the corporate exercise to effect the transfer.
  • Expanding into new regions – If you are setting up a company in another country, a company secretary with regional presence can advise you on how to achieve your business objectives while complying with the local legislations.

Challenges during the end stages

Reaching the end stages of a business entity can be both an exciting and daunting time as you prepare to transition to new endeavours or capitalise on your achievements.

Common challenges in this time of change include:

  • Choosing the best path forward – A company secretary, together with a corporate finance advisor, can assist with determining the optimal route for your business’s end stages. They can help weigh the pros and cons of selling or liquidating the business versus pursuing an IPO and other avenues and then collectively guide you through the transition process.
  • Ensuring compliance – Your company secretary can help ensure all necessary documentation is filed correctly and that no regulatory obligations or duties are outstanding.
  • Contract management – You may need to terminate or amend contracts with different stakeholder groups, from suppliers to employees. Your company secretary, together with a lawyer, can assist to review existing contracts, advise on termination procedures and help negotiate with parties to ensure a smooth process.

The benefits of outsourced corporate secretarial services

Working closely with the CEO and/or CFO of a company, the company secretary can provide immense value to your business not only when times are tough, but also when business is booming. With a capable company secretary by your side, your company is able to navigate obstacles and capture opportunities in all economic climates.

The question is, will you hire a company secretary internally or engage an external team?

Outsourced corporate secretarial services are becoming an increasingly popular option, with many businesses seeking a company secretarial solution that provides:

Time savings
With an external team handling your company secretarial duties, your executive team are freed up to focus on core operations and growth initiatives.
Access to a wealth of knowledge and resources
With access to an entire team of company secretarial experts, your company is supported to achieve outstanding regulatory compliance and address future challenges before they become an issue.
Compliance support during expansion
Service providers with a global presence are familiar with international regulatory obligations, so they can ensure a smooth and compliant expansion process.
A full suite of complementary services
Growth affects all areas of a business, not just the company secretarial function. Engaging a provider which offers complementary services means you can easily access support across business functions.
Business continuity
The departure of an internal company secretary can cause undue stress and financial outlay in the hurry to find a replacement, especially given that the Singapore Companies Act stipulates that the seat cannot be empty for more than 6 months. As such, outsourcing the role ensures you are never without company secretarial support and do not risk falling foul of the requirement under the Companies Act.
Impartiality
External company secretaries can provide unbiased advice and support because they are not influenced by internal company politics or personal interests, and hence are independent parties.
A strong referral network
A top-tier provider will be able to direct you to trusted third-party experts as needed so that potential issues are avoided.

Engage world-class corporate secretarial services

BoardRoom has been providing high-quality company secretarial services since 1968. Since then, we have developed a strong track record of helping businesses across all industries achieve their goals.

“We have a formidable pool of talented, experienced staff who provide support to small- and medium-sized local businesses as well as large multinational corporations,” Kevin says.

As a full-service provider, BoardRoom can assist you with all aspects of running a business, from accounting, tax and payroll, to share registry and environmental, social and governance.

“Our company secretarial team has strong technical expertise, industry knowledge and commercial experience, which ensures clients receive specific, high-quality advice for the situation,” Eunice adds.

“What sets us apart is our dedication to seeing our clients thrive as we genuinely want our clients to do well. We take the time to gain an in-depth understanding of your business and goals, then work as an extension of your team to make your vision a reality,” Eunice sums up.

For more information, please contact us today.

Engage world-class corporate secretarial services

Contact BoardRoom for more information:

Eunice

Eunice Hooi

Head of Corporate Secretarial

E: [email protected]

T: +65 6536 5355

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