Company Secretary 1

Company secretary 1

Under Section 139 of the Companies Act 1965, every company incorporated in Malaysia must appoint 1 natural person to act as company secretary. The law requires the directors to appoint a company secretary and made it compulsory for the company secretary to be present at the registered office by himself or his clerk every day during business hours except for weekly and public holidays.

The Companies Act 1965 also made it clear that the post of corporate secretary must not be left vacant for more than one month. Therefore, it is clear that the position of office secretary is legally recognised under the Malaysian laws and can be considered as one of the statutory compliance that the company must fulfil.

The Office Of Company Secretary

As stated above, the appointment of a company secretary in a company is compulsory. However, nowhere in the Companies Act 1965 provides that the company must employ full-time company secretary.

In practice, only large companies such as public listed companies or groups of companies employ full-time company secretary. Be that as it may, most companies procure the service of qualified individual from external corporate secretarial firms to act as the company secretary.

From the business point of view, this arrangement is much more cost-efficient since the company can comply with the statutory requirement and obtain a professional service and at the same time reduce its operating cost of hiring a full-time company secretary as its employee.

Appointing A Company Secretary

With the exception of the first company secretary who is required by law to be named in the company’s Articles of Association, the subsequent company secretary is usually appointed by the directors of the company in accordance to the rules and procedures described in the Articles of Association. Usually, the appointment is effected by passing directors’ resolution stating that a person is to be appointed as a company secretary. (Also see Duties of a Corporate Secretary under Malaysian law)

However, it must be noted that before the appointment, the person to be appointed must execute Form 48F i.e. his declaration stating that he consented to the appointment and that he is a qualified person to act as company secretary.

After the appointment, Form 48F, the certified true copy of the said directors’ resolution and Form 49 must be lodged with the Suruhanjaya Syarikat Malaysia (“SSM”) within 1 month from the effective date of appointment. Form 49 is a form used by the company to communicate the details of new directors, managers and company secretary to the SSM.

Company Secretary’s Resignation

A company secretary may resign by giving a reasonable notice to the company. The directors must then pass a resolution to accept such resignation. The company must then lodge the certified true copy of the said resolution and Form 49 with the CCM. The rationale of such requirement is to ensure CCM capability to monitor the company’s statutory compliance. As stated before, the law does not allow for the post of company secretary to be vacant more than one month. It must be kept in mind that the company’s failure to lodge the said resolution and Form 49 does not necessarily invalidate the resignation (Also see Company Secretary 2).

Removal Of Company Ssecretary

Since the company secretary is appointed by the directors, it goes without saying that directors also have the power to remove him. The removal of company secretary by the directors is similar to the procedure when the company secretary resigned. However, in corporate practice, in order to be efficient, the removal of the company secretary is often done simultaneously with the appointment of new company secretary in Johor Bahru since the position cannot be vacant for more than one month.

To summarise, the procedure is as follows:-

    • The directors passes a resolution to remove the current company secretary and appoint a new one;
    • The new company secretary shall execute Form 48F; and
  • The company then lodge the certified true copy of the said resolution, Form 48F and Form 49.

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