How do Company Secretaries Ensure Compliance And Innovation?

A secretary is an essential staffer in most organizations, from private firms to public corporations. You’ll often find them handling crucial calls for the organization, setting up boardrooms for regular meetings, or racing up and down with files.

But contrary to popular belief, the role of a company secretary goes beyond clerical duties. These employees do not work at the pleasure of their immediate bosses either.

This article explores what company secretaries are, with a particular focus on the role they play in ensuring compliance and innovation.

Who Is A Company Secretary?

Company secretaries are staffers responsible for coordinating administrative duties within a company, especially concerning ensuring statutory compliance. They’re also known as corporate secretaries.

As already indicated, the role of a company secretary isn’t technically clerical or secretarial. However, these staffers may still undertake various clerical roles without a personal secretary.

Note that every registered company operates within certain legal frameworks. In Singapore, these regulations are enshrined in The Companies Act.

Not only does the law require registered companies to employ secretaries. It also spells out the duties of these employees.

Who Can Become A Company Secretary?

Personal secretarial duties are mainly administrative roles. Most people can effectively discharge these responsibilities, provided that they receive minimal on-the-job training. And in many cases, personal image overrides technical qualifications.

However, the converse is true with company secretaries. The Companies Act, Section 171 outlines Singapore’s minimum qualifications for company secretaries.

According to this act, any Singapore resident can serve as a secretary for private Singapore companies. However, those appointed as secretaries to public corporations must meet one or more of the following criteria;

• Must have spent at least three of their last five years serving actively as a company secretary.
• Must be qualified lawyers.
• Must be certified public accountants and members of the Institute of Singapore Chartered Accountants.
• Must be members of other relevant associations, including the Chartered Secretaries Institute of Singapore, Institute of Company Accountants – Singapore, and the Association of International Accountants – Singapore Branch.

Due to the growing demand for company secretaries, acquiring additional certifications is prudent if you’re pursuing a career in this field. Soft skills, such as excellent communication and problem-solving, are bonus advantages.

How Do Company Secretaries Ensure Compliance?

1. Staying Up To Date with ACRA Regulations

Corporate secretaries must ensure their organizations are up to date with all the legal and regulatory requirements of the Accounting and Corporate Regulatory Authority (ACRA) to avoid penalties.

Not only should a company secretary understand ACRA’s current regulatory requirements. They should also endeavor to stay abreast of any changes the regulator approves.

Among the key ACRA requirements is that all registered companies must conduct Annual General Meetings (AGMs) within specific intervals. Resolutions from these meetings may need to be filed with the regulator whenever required.

ACRA also requires companies to lodge documents like annual returns (ARs) within specific time frames.

Other critical information a company secretary may need to report to ACRA include changes of business address, management restructuring, and breach of contract by the director.

2. Submitting ECIs to the IRAS

Another key role a company secretary plays concerning ensuring compliance is submitting Estimated Chargeable Incomes (ECIs) to the Inland Revenue Authority of Singapore (IRAS).

ECI estimates a company’s taxable profits over a Year of Assessment (YA). It typically excludes tax-allowable expenses.

The formula for calculating ECI is Taxable Profit – Taxable Expense.

To ensure compliance, the IRAS requires each company to submit an ECI for the valuation year. A corporate secretary’s responsibility is to ensure such information gets to the revenue body within three months of the organization’s fiscal year-end (FYE).

Filing of ECI typically happens via the IRAS website. However, there’s also the option of submitting a physical form.

3. Staying Abreast Of New Taxation

Every for-profit organization is subject to taxation. While the accounts department plays the most significant role in filing income tax, it’s the corporate secretary’s role to ensure such taxation is filed on time.

More importantly, a company secretary should strive to stay abreast of any newly enacted corporate tax law.

Singapore is famous for introducing favorable taxation policies as part of its strategy to spur economic growth. That was evidenced by a raft of incentives recently unveiled in the Singapore Budget 2023.

A company secretary must have their ears on the ground whenever new taxation emerges. They can then immediately communicate the changes to their organizations and possibly cash in on the new opportunities.

As of the time of writing, companies in Singapore can benefit from the following tax exemptions;

Start-up tax exemption (SUTE)

SUTE exempts new businesses from paying up to 75% of their first $100,000 of taxable income and an additional 50% of their next $100,000 taxable income. These exemptions only apply for the first three tax years.

Partial Tax Exemption

Under this scheme, companies operating in Singapore enjoy a 75% tax exemption on their first $10,000 of taxable income and an additional 50% on the next $190,000 of taxable income.

Wrap Up

Given the critical role that corporate secretaries play in ensuring compliance, it’s important to hire duly qualified and experienced personnel for this position. The best way to go about that would be to seek the services of a licensed staffing agency.