Role Of A Company Secretary For Your Startup

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Incorporating a startup is an exciting milestone for entrepreneurs embarking on their business journey. However, the process of incorporating involves several legal and secretarial considerations that need careful attention. A company secretary plays a crucial role in ensuring compliance and facilitating a smooth incorporation process.

 

In this blog post, we will discuss the legal and secretarial considerations involved in incorporating a startup, highlighting the role of the company secretary.

 

 

Choose the Right Business Structure:

The first step in the process of incorporating a startup is to select the appropriate business structure. This decision involves considering options like a private limited company, a limited liability partnership (LLP), or a sole proprietorship. You may like to contact a business consultant to gain a thorough understanding of the implications, advantages, and disadvantages associated with each structure.

 

 

Prepare the Memorandum and Articles of Association:

Drafting the Memorandum and Articles of Association (MAA) is a critical step in the incorporation process. The MAA outlines the company’s objectives, share capital, rights, and obligations of shareholders, and internal governance rules. Work closely with your company secretary to ensure the MAA reflects the startup’s goals and complies with legal requirements.

 

 

Register the Company with the Regulatory Authority:

It is the duty of your company secretary to carry out the essential registration procedures with the regulatory authority, such as the Registrar of Companies. This entails submitting the required forms, supporting documents, and remitting the relevant fees. It is imperative to ensure precision and adherence to statutory obligations throughout the registration process.

 

 

Issue Share Capital and Share Certificates:

Determine the share capital structure and issue shares to the initial shareholders. Prepare share certificates, which serve as legal proof of ownership for the shareholders. Maintain accurate records of share capital and regularly update the register of members.

 

 

Establish Statutory Registers and Records:

Maintain proper statutory registers and records as required by law. This includes the register of members, register of directors, register of charges (if applicable), and other relevant registers. As a company secretary, ensure these registers are accurate, up-to-date, and available for inspection as required.

 

 

Appoint Directors and Company Officers:

Facilitate the appointment of directors and company officers. With the help of your company secretary, you can prepare the necessary resolutions and documentation for their appointment, ensuring compliance with legal requirements. Maintain a register of directors and officers, including their personal details, appointment dates, and any changes.

 

 

Comply with Statutory Filing Obligations:

Your company secretary is also responsible for ensuring timely compliance with statutory filing obligations. This includes filing annual returns, financial statements, and any other required forms with the regulatory authority. Monitor filing deadlines with your corporate secretary and adhere to them to avoid penalties and maintain compliance.

 

 

Facilitate Board Meetings and Decision-Making:

Support the board of directors by organizing and facilitating board meetings. Your company secretary will also prepare meeting agendas, draft minutes, and ensure proper documentation of decisions made during the meetings. They would also maintain a record of board resolutions and make them available for reference.

 

 

Establish Internal Governance Policies and Procedures:

Your appointed company secretary will assist in establishing internal governance policies and procedures tailored to the startup’s needs which may include policies related to conflicts of interest, code of conduct, decision-making processes, and delegation of authority.

 

 

Implement Compliance Frameworks:

One of the key responsibilities of a company secretary is to establish a compliance framework that conforms to relevant laws, regulations, and industry best practices.

 

 

Provide Corporate Secretarial Support to Shareholders:

The company secretary will additionally assist shareholders by addressing their inquiries, furnishing relevant information, and facilitating their active participation in the governance of the startup. They will uphold open channels of communication, arrange shareholder meetings when required, and ensure adherence to shareholders’ rights and entitlements.

 

 

Conclusion:

Incorporating a startup involves navigating numerous legal and secretarial considerations. Your company secretary plays a vital role in ensuring compliance, facilitating the incorporation process, and supporting the governance of the startup. By understanding the legal and secretarial considerations outlined in this blog post, your company secretary can effectively guide the startup through the incorporation process and establish a strong foundation for future success.

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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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