Conducting a business in Singapore without the support of a company secretary is like driving without a dashboard – all is well until something goes wrong somewhere and then it all gets costly. The incorporation of every company in Singapore requires nomination of a company secretary within six months of incorporation. This does not imply a recommendation. It is imposed by ACRA, and being late on such a window implies that you have only begun your compliance process in the red. Click for source!
The role of a first-time founder is quite large, something that many new founders might be surprised to learn. There is much more than a document shuffler in a good company secretary. They keep proper ACRA records, monitor statutory deadlines, prepare board resolutions, keep a Register of Members and make sure that your filings are up to date. Penalties can be initiated by a one-off failure to file AGM. A single forgotten update may result as a compliance nightmare consuming time and money.
Then why is it so many founders consider it an afterthought?
Knowing each other has a significant role. Entrepreneurs who are entering the markets in other markets are accustomed to other administrative norms. The system in Singapore is however organised, computerised and strict with negligence. The Companies Act lays down the ground rules – and a professional secretary knows the ground rules and not only that, but he/she does them before the issues even arise.
A majority of the professional service providers in Singapore provide corporate secretarial services in forms of annual returns filing, change of directors and shareholders, share allotment and maintenance of government contacts. The more efficient the ones are to issue proactive deadline reminders, and the founders do not have to suffer a last minute panic which is the main cause of errors.
Cost wise, this is more cost effective to do it right the first time than the second. Retroactive compliance – amended filing, legal counsel, regulatory fines, are always expensive than a reasonable annual retainer would ever be.
Another aspect that founders do not take seriously is the credibility aspect. When your company records are being scrutinised by the investors or any other interested parties, untidy or incomplete books will be the first thing to be questioned. Well maintained, clean registers are an indication of a well run operation. Such perception has a lot of weight than most founders can imagine.
The decision lies in the selection of an appropriate provider that boils down to a couple of pragmatic considerations. Responsiveness is important, your secretary should not be on leave when you need him or her the most. Experience in the industry is good particularly in businesses that have foreign shareholders or where the ownership is layered. Open pricing will help avoid unpleasant surprises in the future.