Some business starters may not be aware that a company secretary does not equate to a private secretary. The former is required to be much more legally savvy, with duties far beyond general administrative work. If the entry requirements are set too low, unprofessional secretarial performance can lead to violation of The Companies Ordinance, thus suffering unnecessary losses.
Differences Between Company Secretary and Private Secretary
Company Secretary (aka Com Sec) is a statutory position. Every private limited company must appoint a company secretary in accordance with the requirements of The Company Ordinance. The position revolves around the company instead of the boss only. The appointed secretary should be well versed in business regulations and laws, so that they can act as the intermediate channel between the company and the government, while monitoring corporate governance to ensure the legitimacy.
A private secretary mainly serves the boss. Generally, they are responsible for preparing the itinerary for the boss and handling daily administrative affairs. The role thus tends to cater for a certain superior.
Although one can be a company secretary without having a particular license, many of them enter recognized assessments to enhance their competitiveness. Popular ways include passing the Chartered Governance Qualifying Programme (CGQP) of the Hong Kong Chartered Governance Institute (HKCGI), or enrolling in courses jointly held by HKCGI and other institutes. It is safe to say that Com Sec have higher qualification than the private ones.
Besides, listed companies have even higher requirements for company secretaries than unlisted ones. Their appointed company secretaries must be qualified enough to fulfil the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.
Who Can Be a Company Secretary?
The company secretary of a Hong Kong limited company must be a Hong Kong resident over the age of 18, such people are natural persons. A body corporate can also act as the company secretary, and the relevant legal person must be a limited company registered in Hong Kong or an overseas company with a place of business in Hong Kong.
Can a Director Be the Company Secretary?
It depends on the number of directors. According to the Companies Ordinance, if the person is the company’s sole director, that person is prohibited from being the company secretary. In other words, if there are more than one director, one of them can also be the company secretary. Entrepreneurs of start-ups often lack manpower. Because of that, some may plan to be both the sole director and company secretary, hence violating the aforementioned law. In that case, they should hire personnel for the secretary position.
Company Secretary Duties
The company secretary has a wide range of duties, ranging from administration to legal management, and plays an important role in the entire process from the establishment of the company to the liquidation of the company. The following are some of the common duties of a company secretary:
- Summit annual returns
- Update company record book
- Prepare Significant Controllers Register (SCR)
- Prepare board of directors and annual general meeting
- Formulate internal meeting minutes
- Apply and renew business registration (BR) certificate
- Apply certificate of incorporation (CI)
- Handle equity transfer matters
- Cancellation of company registration
Why is Company Secretary Important?
In addition to complying with the Companies Ordinance, hiring a company secretary will bring many perks to the company. They are responsible for handling government documents. For example, a Hong Kong private limited company has to submit annual return (NAR1) every year. Unless an e-Registry reminder is set up, no notification will be issued. For any late submission of annual return, the company can be fined up to $3,480.
In addition, enterprises have to operate in accordance with various company and business regulations. Since the relevant fees are updated constantly, a specialist responsible for checking and keeping the company comply with all changes is much needed.
Balance between different interests
It is not uncommon that conflicts of opinion occur between the board of directors and the management of the company. The company secretary can act as a coordinating role, thus balancing the interests of all parties and preventing further disagreement. Besides, the busy directors may not have caught up on the latest way of operation of the enterprise. In midst of preparing the board meeting, company secretary can compose briefs summarizing the company status for the directors. The efficiency of meetings can hence be maximized.
Keep an eye on management level
A secretary with a professional understanding of company law can supervise the company in a relatively neutral role, thus preventing directors and management from engaging in illegal activities, such as unlawful transactions, and misappropriation of assets. It can be said that a company secretary can help protect the reputation of the company.
Unlike private secretary, companies should set the bar higher for a company secretary. Secretarial services provided by accounting firms are popular within employers. In addition to providing legal advice and submitting documents for the company, competent company secretaries can also make suggestions on tax issues. As a one-stop service provider, OneStart Business Centre has a team of certified public accountants (CPA) and company secretarial talents. To customize your accounting and secretarial solutions, feel free to Call 3575 6888, or Whatsapp OneStart Business Consultants to know more!