Understanding the Legal Landscape: Are Company Secretaries in Malaysia at Risk of Court Charges?

Understanding the Legal Landscape: Are Company Secretaries in Malaysia at Risk of Court Charges? 

 As a company secretary in Malaysia, you play a critical role in ensuring your organization’s compliance with legal and regulatory requirements. 

 The Role of a Company Secretary in Malaysia Under the Companies Act 2016, a company secretary is responsible for: 
 - Ensuring statutory compliance (e.g., filing annual returns, maintaining registers). 
 - Advising directors on legal obligations. 
 - Acting as the liaison between the company and regulatory bodies. 

 Failure to fulfill these duties can expose the secretary to legal risks, though direct charges are rare if duties are performed diligently.

Legal Risks for Company Secretaries 

 1. Non-Compliance with Statutory Requirements - Example: Failing to file annual returns or maintain proper records. - Consequence: The secretary could face penalties if the company is found non-compliant. 
 2. Misrepresentation or Dishonesty - Example: Providing false information to regulators or courts. - Consequence: Criminal charges for fraud or perjury, as seen in the Singapore case involving Pritam Singh[1]. 
 3. Breach of Fiduciary Duty - Example: Negligence in advising directors, leading to legal violations. - Consequence: Civil liability or disciplinary action. 

How Often Are Company Secretaries Charged? 

While there’s no publicly available data on the frequency of charges against Malaysian company secretaries, the risks are low if duties are executed properly. Charges typically arise from deliberate misconduct (e.g., falsifying documents) or gross negligence (e.g., repeated failures to file returns).

Mitigating Risks: Best Practices for SMEs 
  1. Stay Informed - Regularly update knowledge on the Companies Act 2016 and other regulations. - Attend workshops or webinars hosted by the Companies Commission of Malaysia (SSM).
  2. Document Everything - Maintain meticulous records of compliance activities (e.g., meeting minutes, filings). - Use digital tools for secure, audit-ready documentation. 
  3. Seek Legal Advice - Consult lawyers for complex compliance issues (e.g., cross-border transactions). - Clarify uncertainties to avoid accidental breaches. 
  4. Avoid Conflicts of Interest - Disclose any personal ties to the company or its directors. - Refuse roles that create conflicts (e.g., acting as a director and secretary simultaneously). 
  5. Report Concerns Promptly - If directors ignore compliance advice, escalate the issue in writing. - Protect yourself by documenting all communications. 

Key Takeaways

 - Charges are uncommon but possible in cases of intentional wrongdoing or severe negligence. - Proactive compliance and documentation are your strongest defenses. 
 - Stay vigilant—regulatory landscapes evolve, and SMEs must adapt. By prioritizing diligence and transparency, company secretaries in Malaysia can minimize legal risks while supporting their organizations’ growth.

This article is for informational purposes only and should not be considered legal advice.

  • 1
    https://www.bernama.com/en/world/news.php/news.php?id=2393479
  • 2
    https://www.hkiac.org/about-us/statistics
  • 3
    https://www.bernama.com/en/news.php?id=2394527
  • 4
    https://ourpublicservice.org/performance-measures/political-appointee-tracker/
  • 5
    https://www.govinfo.gov/content/pkg/FR-2025-02-20/pdf/FR-2025-02-20.pdf

18 Feb 2025
Kenyataan Media - Setiausaha Syarikat Didakwa Atas Pertuduhan Terlibat Dalam Sindiket Penipuan Pelaburan Antarabangsa





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