A Company Secretary is not simply a mandatory requirement for any private limited company incorporated in Malaysia. He or she also performs essential duties that directly affect the smooth operation of a business. Therefore, if a company secretary fails to meet expectations, for reasons such as:
- Response time for your questions and requests runs into days
- Inability to communicate business matters expediently and effectively
- Shoddy advice and guidance with regard to compliance regulatory requirements pertinent to your company’s operation
- Failure to remind the company and directors of the deadlines for annual returns and any other compliance matters
- Ureasonable fees added to the annual fee
- Late or incorrect actions taken that led to fines and penalties
- Ancillary services required by the company, such as registered office or nominee director services, are not available,
then a decision to discharge and hire another one from professional Company Secretary Services must be made promptly.
Company Secretary in Malaysia
Firstly, it is important to understand the power directors directly hold with regard to dismissing and hiring company secretaries.
- A Company Secretary in Malaysia is a company officer appointed by the board of directors through passing a board resolution. Therefore, the board has the power to remove a secretary from office any time, as long as the removal is performed in accordance to the terms of his or her appointment or the company’s constitution. In practice, the board would usually request his or her resignation to be tendered, and then proceed to appoint a new company secretary as replacement. According to Section 237 of the Companies Act 2016, the company can request the existing company secretary to submit his or her resignation letter after all pending payment is cleared. According to Section 239 of the Companies Act 2016, a resignation letter is not required for termination should the exisiting company secretary be unreachable due to certain reasons.
Secondly, it is important to be reminded of the legal obligations surrounding the timely appointment of a company secretary in Malaysia.
- Office of the company secretary cannot be left vacant for more than 30 days at any point in time. Provisions to engage a fully qualified and competent company secretary should be made once the decision to replace the exisiting company secretary is finalised, or when notice of resignation is received, to avoid delay and a possible fine of RM50,000 for failing to comply with this requirement.
Thirdly, it is important to know the relevant information and documents to prepare to make the switch.
- The new secretary will be in charge of updating details of the new company secretary to the Registrar of Companies (SSM) and collect all statutory and company documents from the office of the existing secretary. Documents to be signed by directors for the appointment of the new company secretary include:
- Board resolution for the change of company secretary
- Board resolution for the acceptance of resignation or removal of the existing company secretary
- Board resolution for the change of registered office
- Letter of appointment for the new company secretary