It is impractical to start a business in Singapore without a good secretarial support just as it is impractical to bake a cake without monitoring the temperature in the oven- it is very optimistic but it is normally a messy affair. Read more here: hub.com.sg/
The Singapore law stipulates that all incorporated companies must have a company secretary within six months of incorporation. No grace periods. No exceptions. ACRA is strict on the line and founders that do not meet this deadline learn that penalties of non-compliance come much sooner than anticipated.
The job itself is a source of confusion to many. Most would think that it involves meeting with people and responding to emails. Wrong. A professional company secretary ensures that statutory registers are kept, board and shareholder resolutions drafted, director changes, share allotments, and ACRA filings are kept up-to-date and current. A penalty is created by one missed yearly return. The existence of one outdated register causes issues when auditing or raising funds. Micro-slips add up.
What is the reason why founders always give this second priority?
Knowing each other is a significant factor. Business people who come to Singapore are used to an administrative culture which is less strict and therefore they underestimate the framework of Singapore. The here Companies Act is very strict, strictly applied and actually very strict against disorganisation. An experienced company secretary is not only knowledgeable of the rules, but he or she knows when and where to expect the next one and proceeds with it even before time runs out and pressure mounts.
The professional secretarial service packages available in Singapore normally include annual filing of returns, directors and shareholder changes, daily ACRA correspondence as well as constitutional amendments. Good providers will incorporate deadline tracking in their workflow, that is, founders will receive reminders before issues emerge and notifications once they have already come up.
The economic rationale is quite simple. Professional retainer would be just a fraction of the cost of reactive compliance repair. Lawsuits, re-filings, fines, man hours in management wasted in dealing with fires, that bill mounts quickly. It is much less expensive to prevent.
It has a reputational aspect as well. During due diligence where investors and partners will be going through corporate documents, they make up their minds within a very short time. Operational discipline is communicated by clean well-maintained records. Unsystematic records send the wrong message, and this impression lasts.
There are three things which are important when choosing a provider. First, responsiveness – a secretary that turns silent when there is a need to file an important document is literally useless. Second, pertinent experience – companies that have foreign shareholders or a layered share structure require a secretary who has dealt with such arrangements in the past. Third, transparency on pricing- the uncertainty in fee structure leads to friction and loss of trust in the long term.