As your business grows, so does the complexity of its operations and regulatory requirements. Many new startups may initially hire unqualified individuals as company secretaries to save costs, but this approach can lead to significant challenges as the company expands. At MAPA Corporate Services (Private) Limited (MCS), we emphasize the importance of engaging qualified company secretaries to ensure proper compliance and governance. Visit startabusinessinsrilanka.com for professional company secretarial services.
Legal Requirements for Qualified Company Secretaries in Sri Lanka
According to Section 222 of the Companies Act No. 07 of 2007, any company in Sri Lanka with an annual turnover exceeding Sri Lankan Rupees One Million (Rs. 1,000,000/-) or a paid-up capital of more than Sri Lankan Rupees Five Hundred Thousand (Rs. 500,000/-) is required to appoint a qualified company secretary. This requirement is further detailed in the Government Gazette Notification No. 471/6 of September 14, 1987, which prescribes the necessary qualifications for company secretaries.
Who Can Be a Qualified Company Secretary?
The qualifications for a company secretary as per the aforementioned regulations include:
- Attorney at Law: A licensed legal professional.
- Member of the Institute of Chartered Accountants of Sri Lanka (ICASL): An individual who holds membership in ICASL.
- Member of the Association of Chartered Secretaries and Administrators of Sri Lanka (ACSA): A recognized body for company secretaries.
- Member of the Institute of Cost and Management Accountants (CIMA): A professional qualification now known as the Chartered Institute of Management Accountants.
- Other Recognized Qualifications: Individuals with special qualifications in company secretarial work from an institute approved by the Minister or those with 20 years of relevant experience.
- Pre-1982 Secretaries: Those who held company secretary positions before the Companies Act No. 17 of 1982 came into operation.
Corporate bodies or firms can also function as company secretaries, provided that at least one of the directors or partners holds one of the above qualifications and the firm is registered with the Registrar General of Companies.
Why Your Growing Company Needs a Qualified Company Secretary
- Compliance and Governance: A qualified company secretary ensures your company complies with the statutory and regulatory requirements, thereby avoiding legal penalties and maintaining good corporate governance.
- Expert Handling of Complex Transactions: As your company grows, operational transactions become more complex. A professional company secretary is adept at drafting board resolutions, organizing board meetings, and filing necessary documents with the Registrar General of Companies.
- Credibility and Professionalism: Third parties, such as banks and investors, require certified documentation. Having a professionally qualified company secretary ensures that your documents are certified accurately and professionally, enhancing your company’s credibility.
- Risk Management: Qualified company secretaries are skilled in identifying and mitigating risks related to corporate governance and compliance, protecting your company from potential legal issues.
- Strategic Advisory: Beyond administrative duties, a professional company secretary provides strategic advice on corporate governance, helping your board make informed decisions that align with the company’s long-term goals.
Conclusion
While hiring unqualified individuals as company secretaries may seem cost-effective for startups, it poses significant risks as the business grows. Engaging a qualified company secretary ensures compliance, enhances credibility, and supports the strategic growth of your company. MAPA Corporate Services (Private) Limited (MCS) offers expert company secretarial services to help your business thrive. For personalized guidance and comprehensive support, visit startabusinessinsrilanka.com.
Investing in a qualified company secretary is not just a regulatory requirement but a strategic decision that contributes to the sustained success and stability of your growing business.