Chapter 2 company secretary2

CHAPTER 2COMPANY SECRETARY

LECTURER: PUAN SUHAINI BINTI MAT DAUD

Learning Objectives

At the end of the class, students are able to:– Describe precisely the concept of company secretary, its historical functions and qualifications in accordance with the related rules and regulations (CLO 2)

What is Company Secretary??

•Accordance section 139, Malaysian Companies Act, 1965, every company registered with the Companies Commission of Malaysia (CCM) must appoint a company secretary.

What is Company Secretary??• He must be a member of a

prescribed body or is licensed by the Registrar of Companies.

• The company must also appoint an approved company auditor conduct and prepare the account, audit and tax as well.


• A Company Secretary is a professional whose role in a corporate set up in that of an advisor for legal matters.

• He or She is a very important member of the Company’s Management to handle all paperwork’s, statutory documents and procedural matters that running of the company involves.

• A Company Secretary has been recognized by corporate law as one of the officers of the Company.

• The knowledge that he or she acquires during training makes them versatile enough to carry out functions in various areas like Finance, Accounts, Legal Administrations and Personnel Division.


• In large and medium size business organizations, a company secretary role includes incorporation of the Company, processing applications for management appointments, remunerations, inter-corporate investment and loans, handling public issues including listing of shares and debentures, conducting both board and general meeting, maintenance of records, registers and minutes of the meetings.

• In short, it would suffice to say that all legal and procedural matters as per the Companies Act and all other applicable laws fall under the duties of a Company Secretary.


• A company secretary of today is a company officer who is endorsed with heavier responsibilities and a greater power, duties which demand for ethical behavior from company secretaries at all times.

•The company secretary plays a vital role in the governance and administration of a company’s affairs

• The secretary of a company must be a natural person of full age who has his principal or only place of residence in Malaysia

Definition of Co. Secretary..

Cases on historical functions of company secretary

a.Newlands v national Employer’s Accident Association (1885)

b.Barnett, Hoares & Co. South London Tramways Co. (1887)

Differentiate between Secretary and Company

SecretarySecretary Company SecretaryAny individual can be Secretary after going through a secretarial course

Any individual who studied the Company Secretary course

Responsibilities:Maintain files, attend telephone calls, type letters and carry out other clerical tasks in any organization they are working

Resourceful supervision of the company, predominantly with regard to ensuring acquiescence with legal and regulatory necessities and for ensuring that decisions of the Board of Directors are put into practice

Differentiate between Secretary and Company Secretary

Company secretary SecretaryA chief administrative officer

An administrative officer

Backbone of a company Backbone of his/her boss

Form a managerial position

As supporting management

Role is not for clerical duties only

The main role is clerical duties

Must hold a licence from CCM

Has no licence

Appointment of Company Secretary

Open file: Appointment of Secretary

Qualifications of Company Secretary1. Natural person of full age

Section 139 of the Companies Act 1965(Act) states that ‘every company shall have one or more secretaries each of whom shall be a natural person of full age who has his principal or only place of residence in Malaysia”.‘Full age’ means company secretaries must 18 years old as set down in the Age of Majority Act (Act No. 21 of 1971)

2. Principal or place of residence in Malaysia

Malaysian citizen His branch or residence have to be in Malaysian

Qualifications of Company Secretary3. Present at the company registered office during

office hours.At least one of the company secretaries must be present at the registered office during office hours.

4. Members of professional body Malaysian Association Of Institute Of Chartered Secretaries And Administrators (MACSA)Malaysian institute of accountant (MIA)Malaysian institute of certified public accountant (MICPA)Bar council of MalaysiaMalaysia Association Of Company Secretaries

Qualifications of Company Secretary• Section139 (1A) of the Act requires

the name of the first secretary to be named in the articles of association of the newly formed company.

• Section 139A of the Act stipulates that a person cannot act as a secretary of a company unless:

Qualifications of Company Secretary

i. he is a member of a professional body, or any other bodies, which has been prescribed by the Minister of Domestic Trade and Consumer Affairs by notification published in the Gazzette; or

ii.He is licensed by the CCM in line with Section 139B of the Act

Qualifications of Company Secretary

5. Licensed by Registrar of Companies (ROC)

Validity for 3 yearsRM 50 for renew license

Learning Objectives:

At the end of this class, students will be able to:Describe precisely disqualifications of company secretary ( CLO 2)

DISQUALIFICATION OF COMPANY SECRETARY

Becomes an undischarged bankruptConvicted of an offence mentioned in s 139(1) of the Company Act, i.e• any offence in relation to the promotion, formation or management of corporation.

• any offence involving fraud or dishonesty

• any offence relating to the misuse of information or insider trading.

DISQUALIFICATION OF COMPANY SECRETARY

Causes to be member of any of the prescribed bodies mentioned above. (S139A)

Ceases to hold a valid licence to act as company secretary, or no longer a member of the prescribe professional body. (S139B)

A company secretary who has been disqualified

from acting as one may appeal to the Minister.

The decision by the Minister is final.

DUTIES OF COMPANY SECRETARY

LEARNING OBJECTIVESAt the end of this class, the students should be able to : – Describe precisely duties in accordance with related rules and regulations ( CLO 2)

Definition…

•The Articles of Association may specify particular tasks which the secretary is to assume responsibility for and it is possible for more than one person to hold office as secretary of a company.

Duties of Company Secretary

Primarily responsible to The board, the company and the shareholders.

Functions of Co. Secretarya. Providing the necessary support system to

ensure the board of Directors have proper access to information required to manage the company in accordance with the principles of good corporate governance. The stewardship of companies lies with the board of directors and important decisions are resolved at board meetings and shareholders meetings.

b. Ensuring that statutory and regulatory requirements are adhered to with regard to the conduct of meetings

c. Ascertaining that proper record of the shareholders are kept for payment of dividends and attendance at general meeting.

Fundamental Duties of a Company Secretary

•Not to act for any collateral purpose

•To avoid conflict of interest•Not to make secret profits from dealings for or on behalf of the company

Duties of Company SecretaryBoard MeetingsFacilitating the smooth operation of the company’s formal decision making and reporting machinery.Organizing board and board committees meetings.Formulating meeting agendas with the chairman and/or chief executive and advising management on content and organization of memorandum or presentation of the meeting.

Duties of Company SecretaryCollecting, organizing and distributing

such information, documents or other papers required for the meeting.

Ensuring that all meetings are minute and that the minute books are maintained with certified copies of the minutes and that all board committees are properly constituted and provided with clear terms of reference.

Duties of Company SecretaryGeneral MeetingsEnsuring that an annual general meeting is held in accordance with the requirement of the Companies Act and the company’s Articles of Association.Obtaining internal and external agreement to all documentation for circulation to shareholders.


General MeetingsPreparing and issuing notices of meetings, and distributing proxy forms.


Memorandum and Articles of AssociationEnsuring that the company complies with its Memorandum and Articles of Association.Drafting and incorporating amendments in accordance with correct procedures.

Statutory Registers

Statutory RegistersMaintaining the following statutory registers:MembersCompany charges

Statutory RegistersDirectors and secretaryDirectors interests in shares and debentures

Interest in voting sharesDebenture holders

Statutory ReturnsFiling information with the CCM to report certain changes regarding the company or to comply with requirements for periodic filing such as:Annual returnsAudited annual financial statements and reports related thereto

Shareholders and Share CapitalCommunicating with the shareholders on issues pertaining to their rights, such as rights issues and capitalization issues.Arranging payment of dividends.

Handling share transfers and other matters affecting shareholdings.

Dealing with any queries and request from shareholders.

Monitoring the movements on the register of members so as to identify any apparent ‘stake building’ in the company’s shares by potential take over bidders.

THE END………….

Chapter 2 company secretary2

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