CCM Issues Guidelines and FAQs on Company Secretaries

18 March 2019

On 14 March 2019, the Minister of Domestic Trade and Consumer Affairs announced by way of a gazette notification that Section 241 of the Companies Act 2016 (‘CA2016’), which requires a person to be registered under the said provision before he can act as a company secretary, would come into operation on 15 March 2019 [P.U.(B)138/2019].

The Companies (Practising Certificate for Secretaries) Regulations 2019 (‘Regulations’) which were gazetted on 14 March 2019 will also come into operation on 15 March 2019.

We have on 14 March 2019 provided an overview on the Regulations, which can be accessed here.

On 14 March 2019, the Companies Commission issued the Guidelines Relating to Practising Certificate for Company Secretaries under Section 241 of the Companies Act 2016 (‘Guidelines’) and introduced a new Part K to the FAQs on Companies Act 2016 and Transitional Issues (‘Part K’).

The Guidelines and Part K provide further guidance and clarification in relation to the registration of company secretaries under section 241 of CA2016 and matters that are incidental to the registration of company secretaries.

The following are some of the salient issues to be noted under the Guidelines –

1. Deadline for submission of application by an existing secretary

A person who has been appointed as a secretary of a company before 15 March 2019, i.e. the enforcement of section 241 of CA2016, may continue to act as a secretary to the company and is required to register with the Registrar within 12 months from 15 March 2019.

2. Qualification

To be qualified to act as a secretary, a person must satisfy the requirements set out in section 235 of CA2016, that is he must be –

(a) a natural person;

(b) eighteen year of age and above;

(d) licensed by the CCM under section 20G of the Companies Commission of Malaysia Act 2001 (‘CCMA’), or be a member

of any of the following -

(i) Malaysian Institute of Chartered Secretaries and Administrators (MAICSA);

(ii) Malaysian Institute of Accountants (MIA);

(iii) Malaysian Bar (BC);

(iv) Malaysian Association of Company Secretaries (MACS);

(v) Malaysian Institute of Certified Public Accountants (MICPA);

(vi) Sabah Law Association (SLA); or

(vii) Advocates Association of Sarawak (AAS).

3. Non-citizen or non-permanent resident

A person who is not a citizen or permanent resident of Malaysia may apply for a practising certificate to act as a secretary subject to the following conditions –

(a) he has been appointed as a secretary before 31 January 2017;

(b) he shall only act as a secretary of the company of which he was appointed before 31 January 2017;

(d) he has complied with the conditions set out in sub-paragraphs (a), (b) and (d) of paragraph 2 above.

4. Additional requirements

4.1 In addition to the qualifications set out above, an applicant must –

(a) not be disqualified under section 238 of CA 2016; and

(b) not have any pending legal action against him under any provision of the laws specified in the First Schedule of the

CCMA, namely CA2016, Trust Companies Act 1949, Kootu Funds (Prohibition) Act 1971, Registration of Businesses Act

1956, Limited Liability Partnerships Act 2012 and Interest Schemes Act 2016.

4.2 The Registrar must be satisfied that the applicant is a fit and proper person to be registered, after considering the following –

(a) the character, qualifications and experience of the applicant;

(b) the interest of the public; and

5.   Method of submission

An applications for a practising certificate must be submitted through the electronic filing system (https://esecretary.ssm.com.my).

6.   Application for renewal of practising certificate

6.1   An application for the renewal of a practising certificate must be made not less than 30 days before the expiry date of the practising certificate.

6.2   Before submitting an application for the renewal of a practising certificate to the Registrar, the applicant must –

(a) comply with the requirements set out in paragraphs 2 and 4.1 above;

(b) be a fit and proper person as set out in paragraph 4.2 above; and

below).

7.   Duration of practising certificate

A practising certificate will be valid for a period of one year from the date of its issuance and may be renewed for a period of not more than three years.

8.   Cancellation due to non-renewal

The Registrar will cancel a practising certificate after 12 months from its expiry date if its holder does not apply for a renewal of the same. The person will have to submit a new application if he applies for a practising certificate thereafter.

9.   Continuing Professional Education

A holder of a practising certificate must complete the minimum total number of hours of Continuing Professional Education (‘CPE’) during the validity period of his practising certificate –

• If the validity period of a practising certificate is more than 1 year, the CPE hours may be accumulated in the

duration of that period.

10. Cessation as holder of practising certificate

10.1 A person ceases to be a holder of a practising certificate if –

(a) he is no longer qualified to act as a secretary under section 238 (disqualification to act as a secretary) of CA2016;

(b) his name ceases to be registered on the Register of Secretaries maintained by the Registrar under section 241 of

CA2016; or

10.2   A person who ceases to be the holder of a practising certificate under sub-paragraph (a) or (b) of paragraph 10.1 above must notify the Registrar and the companies of which he is appointed as secretary, in writing within 14 days from the date of the event.

11.   Suspension of practising certificate

11.1   A practising certificate may be suspended pursuant to regulation 5 of the Regulations on the following grounds –

(a) the membership of the secretary has been suspended by the body specified referred to in paragraph 2(d) above; or

(b) the licence has been suspended by the CCM under section 20H (power of CCM to suspend any licence issued under

any of the legislation in First Schedule of the CCMA) of the CCMA.

11.2   If the suspension period exceeds 30 days, the secretary is required to notify in writing the company of which he has been appointed of the suspension.

12.   Revocation of practising certificate

The Registrar may revoke a practising certificate pursuant to regulation 6 of the Regulations.

13.   Surrender of practising certificate

13.1   A secretary may surrender his practising certificate pursuant to regulation 8 of the Regulations.

13.2   The surrender of a practising certificate shall not take effect until the Registrar is satisfied that adequate arrangements have been made by the secretary to meet all liabilities and obligations arising from his appointment that are outstanding at the time the notice of surrender was given to the Registrar.

14.   Duties, responsibilities and conduct of a secretary

14.1   Paragraphs 27 to 30 and paragraph 37 of the Guidelines also set out the duties, responsibilities and conduct of a secretary. These duties and responsibilities are in addition to duties that are imposed on him under CA2016 or other written laws.

15.   Duty in relation to registered office and registers

A secretary must, either in person or by his employee or agent –

(a) be present at the registered office of the company on the days and at the hours during which the registered office is

accessible to the public;

(b) maintain and keep updated all the registers, records and books which are required to be kept at the registered office;

and

document and records at the registered office.

16. Duty to act honestly and use reasonable diligence

A secretary must at all times act honestly and use reasonable diligence in the discharge of his duties as a secretary. These duties may include, but are not limited to, the following –

(a) managing, attending and recording the proceedings of the meetings of the board of directors;

(b) managing, attending and recording the proceedings of the meetings of shareholders;

(d) advising the board of directors on the statutory requirements under CA2016 and any other disclosure and governance

requirements relevant to the company;

(e) ensuring that the statutory documents and records are provided to the new company secretary or the company at the

registered office once he has ceased office as company secretary; or

(f) performing any other duties imposed under CA2016.

17. Duty as reporting institution

A secretary must also comply with the requirements under anti-money laundering and anti-terrorism financing laws of Malaysia when carrying out the following activities -

(a) acting as formation agent of legal entities;

(b) acting or arranging for another person to act as a director or secretary of a company, a partner of a partnership, or a

similar position in relation to other legal entities;

company, a partnership, or any other legal entities or arrangement;

(d) acting as or arranging for another person to act as a nominee shareholder of another person; or

(e) performing any other duties imposed under anti-money laundering or counter-financing of terrorism guide issued by

Bank Negara Malaysia.

18.   Duty in relation to practising certificate

A secretary must state his practising certificate number when executing any document in his capacity as secretary or when lodging any document with the Registrar.

Question 16 of Part K explains that during the transition period up to 14 March 2020, a secretary may state his LS number or prescribed body number or the practising certificate number when executing any document in his capacity as secretary or when lodging any document or in any correspondences with the Registrar.

19.   Multiple memberships in approved bodies

19.1   A secretary who is a member of more than one approved body must only designate one designated body in his application for a practising certificate. If there are any changes to the membership of the designated approved body, he must update the Registrar on the changes within 14 days from the date the change occurred.

19.2   If the membership of a secretary who is a member of more than one approved body is suspended or revoked, he is deemed to be no longer qualified to act as secretary pursuant to section 235(2)(a) of CA2016.

20.   Additional clarifications in Part K

20.1   A secretary who has resigned and has yet to be appointed as a secretary in any company is required to apply for a practising certificate before being named as a secretary (FAQ 14 Part K).

20.2   A secretary who is qualified to act as secretary before 15 March 2019 but has never been appointed as a secretary is required to apply for a practising certificate before being named as a secretary (FAQ 15 Part K).

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CCM Issues Guidelines and FAQs on Company Secretaries