Do I need a Company Secretary?
Earlier, under the repealed Companies Act of 1996, every company, whether public or private, was required to appoint a company secretary. While it was common for some private companies to run more professionally by hiring local audit firms and law firms to handle their company secretary functions, it was also common for some small companies to have one of their directors handle that function.
This changed with the introduction of the new Companies Act of 2023 (CA), which took effect on January 1, 2024.
Post 2024
After January 2024, private companies are no longer required to have a company secretary.
According to Section 141 of the CA, only public, government, and local authority companies are required to have company secretaries at all times. The mention of exclusion of private companies is intentional and deliberate, making it an option rather than a requirement.
Required qualifications for Company Secretary
The CA considers the company secretary to be a company officer who is required by law to comply with all requirements imposed on them. Individuals or firms can provide these services as company secretaries.
If an individual wishes to be the company secretary, they must be:
(i) Over the age of 18;
(ii) A regular resident of the Maldives; and
(iii) Not a director of the company but meet the director's qualifications.
If a firm wishes to be the company secretary, To be a company secretary,it must be a firm must be a Maldives-registered law, accounting, or audit firm that is not in bankruptcy or being wound up.
Company secretary role
The CA clearly defines the role of a company secretary, which includes:
(i) Ensuring that the company is run in accordance with the law and the company's constitution;
(ii) Guiding directors on their legal responsibilities
(iii) Organising and holding board meetings and general meetings;
(iv) Keeping and maintaining minutes of board and general meetings;
(v) Issuing signed documents to establish, prove, or verify any action of the board or general meetings;
(vi) Preparing and submitting statutory documents to the Registrar under the guidance of the board;
(vii) Dealing with the Registrar on behalf of the company in matters provided in the CA; and
(viii) Maintaining the registers as required by law and records and other documents of the company.
Appointement and Removal of Company Secrectry
If a company secretary is appointed or removed by the board of directors such change is to be communicated to the Registrar within 15 days.
What does this mean for private companies?
With this change in the law, the role of company secretary is rendered obsolete.
A counter signature by the company secretary in board and shareholder resolutions is no longer required.
If a private company decides not to have a company secretary, the law allows them to operate without one. This is not to say that a private company cannot have a company secretary; it simply means that the CA does not consider it an essential requirement or statutory obligation. However, if a private company decides to appoint a company secretary for better governance, the provisions applicable to a company secretary as provided by law will apply.
How We Can Help
Our law firm specializes in corporate law and can provide expert guidance on navigating the complexities of the CA 2023. We can assist you in understanding the implications of the changes related to Company Secretaries and help you make informed decisions about your company's governance structure.
If you have any questions or require assistance, please don't hesitate to contact us.
