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examining cosec role to keep minutes and prepare resolutions

CoSec Roles Examined: Keeping Minutes & Drafting Resolutions

Malaysians incorporating their first Sdn Bhd learn of the odd-sounding role called ‘Company Secretary’ – colloquially referred to as a ‘CoSec‘.

At surface level, business owners are taught that the Company Secretary is a mandatory hire who advises directors on matters of statutory compliance and deals with SSM on behalf of the company.

cosec responsibility in malaysia to deal with paperwork from SSM
What that basically means.

While true, we believe owners would greatly benefit from a clearer understanding of a CoSec’s duties.

And so, we’ve written a series examining key roles of a Company Secretary.

In this post, we’ll cover two key Company Secretary tasks: keeping meeting minutes and drafting resolutions.

What are meeting minutes?  

Before explaining meeting minutes, lets quickly list the three types of official meetings regularly held by Sdn Bhds in Malaysia:

Type of MeetingPurpose
Annual General Meeting (AGM)A scheduled meeting for shareholders to discuss annual reports, appoint and remove directors, and vote on company matters.
Extraordinary General Meeting (EGM)Ad hoc meetings to tackle urgent matters that cannot wait for the AGM. 
Class MeetingFor members within the same class or series of shares to discuss decisions that affect their rights.

We won’t go into too much detail about the meetings, but you can imagine that a lot of important topics will be tabled and decisions reached.

It is the Company Secretary’s duty to record what is discussed and voted on by the directors and shareholders.

This record is referred to as the meeting minutes, and the minutes of all meetings must be recorded in what is known as a ‘minute book’, within 14 days of the meeting being held.

What if meeting minutes aren’t recorded? 

Let’s say SSM suddenly asks to see your minute book.

And it turns out your CoSec has been playing on their phone at every meeting for the past year and the minute book contains nothing but Angry Bird strategies.

example of negligent company secretary who has not kept meeting minutes
Squaw!

Under Section 156 of the Companies Act 2016, a company that fails to keep an updated minute book, the directors and Company Secretaries involved will be fined RM2,000.

It’s not the biggest fine in the world, but considering how crucial this duty is, you definitely need a more responsible CoSec.

This is because after the meetings are over and the minutes are recorded, it’s time to begin carrying out the decisions of the directors, which brings us to board resolutions.

What are board resolutions? 

A board resolution is a formal document that records decisions or actions taken by company directors, also to be recorded in the minute book. 

There are three types of resolutions you should know of:

Type of ResolutionWhat is it?When is it used?
Ordinary ResolutionA decision made by a simple majority of shareholders’ votes at a general meeting.Used for routine matters that do not fundamentally affect the company’s constitution, like annual financial statements approval.
Special ResolutionA decision that requires a majority of 75% or more votes of shareholders present and voting at an extraordinary general meeting.Used for major decisions that significantly change the company’s constitution, like changes in company name or capital structure.
Circular ResolutionA resolution that is passed by written agreement of the company’s directors, without the need for a physical meeting.Used for operational decisions that need to be made quickly, like capital expenditure or contract approvals.

Because of how much power a board resolution holds, it requires the signatures of all relevant board members before it can be put into action.

The Company Secretary prepares resolutions and secures the signatures of members.

Subsequently, it is also the CoSec’s responsibility to execute the wishes of the directors as per the contents of the resolution, be it is opening a new bank account or the termination of themselves as current Company Secretary!

The value behind what a CoSec does

The directors are freed from the administrative burdens of record keeping and informing stakeholders of key decisions.

Keep in mind that the Companies Act 2016 also makes it obligatory to record meeting minutes and resolutions, so the CoSec has also freed directors from complex compliance requirements.

Instead, they can focus on their actual job function – which is to make key business decisions based on the interests of the company.

Hope this helps, and be sure to check out the other entries in this series!

  1. Managing Annual Submissions
  2. Updating company statutory information

Let MISHU be your Digital CoSec

Co sec Manager Fenny

Consider appointing MISHU’s Company Secretaries as your guide to total compliance. We’re friendly, digital-first, and deliver professional services at affordable prices.

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