What are resolutions?
Resolutions are records of decisions made during a meeting. There are 2 types of resolutions:
- directors’ resolutions (or board resolutions); and
- members’ resolutions, which in turn further sub-divided into:
- ordinary resolution, which requires a majority of votes from the members for it to be passed; and
- special resolution, which requires 75% of votes from the members for it to be passed.
Since resolutions are records of decisions made during a meeting, they should be filed together with minutes of meetings at the registered office of the company and be opened for inspection by the members.
- However, there is a provision in the Companies Act which specifically precludes minutes of meetings of directors and/or managers from inspection by members of the company.
- In view of the aforesaid provision, the minutes of meetings of directors and/or managers should therefore be rightly kept separate from the company’s statutory records (such as its registers and minutes of general meetings) which are open for inspection by the members.
What is share capital?
Share capital is the money (or the likes) invested in a company to carry out its business operations. Unless for purpose of trading and conducting business (or furtherance of business), a company shall refrain from using its capital for other purposes.
It is for this reason that the company is prohibited from returning any of its assets to the members unless in the form of dividend, which is to be paid out of profit as stipulated under the Companies Act, Cap.50. This is because the company is a separate legal personality from the members; the members therefore do not own any of the company’s assets per se.
The members’ interest in a company is registered in the form of a share, which gives the holder two rights as follows:
- subject to the memorandum and articles of association, the right to participate in the profit of a company (in the form of dividend) when it is a going concern; and
- the right to participate in the residual values of the company’s surplus assets after meeting its debts when the company is wound up.
However, when the company is wound up, the liquidator may return the company’s assets either in cash or in specie to its members.
A shareholder can only be a member of a company if one’s name is entered into the company’s register of members. Once a shareholder’s name is entered in the register of members, he or she will have the legal title to the shares issued to him or her. Otherwise, one’s interest in the share can only be regarded as having an equitable interest i.e. ownership interest instead of a legal ownership.
A share certificate bearing the company’s common seal is prima facie proof of a member’s ownership of the shares.
Who is company secretary?
Company Secretary is an officer of the company responsible for the administrative and reporting functions that are governed by the law. The secretary assists the directors to ensure that the company meets all its regulatory obligations.
The Company Secretary’s broad duties can be viewed from one’s responsibilities to the following parties as an officer (of the company):
- to ensure statutory compliance in maintaining the statutory registers and books, filing of statutory returns such as annual return, notice of transfers of shares, change of registered office, notices of appointment, changes in particulars or removal of officers;
- to ensure proper appearance of the company’s identity in legible romanised letters with registration number, etc.;
- to hold board meeting and to attend to the relevant logistics including minute-taking;
- to hold general meeting and to attend to the relevant logistics including minute-taking;
- to take custody of the common seal;
- to ensure that the company complies with its memorandum and articles of association or where necessary, make amendments to the constitution documents and file the same with the authorities;
- to co-ordinate dissemination of the company’s accounts and report; and
- to assist the directors in planning, implementing and maintaining good corporate governance practice.
- to act as an advisor to the board in respect of the corporate matters;
- to provide support to the directors in maintaining statutory registers and records, timely filing of documents required by law, preparing for meetings of members and directors;
- to disseminate timely information by ensuring the board’s decisions are properly carried out, communicated to promote feedback to the board; and
- to induct new board members.
- to communicate adequately with the company’s members; and
- to ensure timely dissemination of financial statements to the members so as to prepare them for the annual meeting.