The Case for Engaging Experienced Corporate Secretarial Agents in Singapore

Co-authored by: Mok Heng Wah, Ho Hui Ling, Lim Sim Ving

The attractiveness of Singapore as a hub for businesses, family offices, startups, and entrepreneurs has led to growth in the number of professional services and corporate services providers. Businesses looking out for such services are spoiled with options to choose from. Cost and service reliability are key concerns for businesses.   In their journey to optimise costs, many businesses have found themselves spending more time to rectify issues arising from their new low-cost service providers. 

Here are some common pitfalls faced by businesses in selecting their service providers:

1. 
   

   The technology allure trap

It is the trend to be excited about new tech buzz words. It started with Big Data and Data Science in the mid-2010s and progressed into Machine Learning, Algorithm, and we moved into Blockchain and to Artificial Intelligence. Whilst it is exciting to think about the future with the advancement of these technologies, in reality, there no real technology solution can replace professional services just yet.

There have been several startups offering technologies that offer fast and easy service portals in getting things done. For example, incorporating a company within minutes or uploading your documents and records into a portal/dashboard and preparing your financial statements.  Such hassle-free experiences entice customers and companies looking to outsource.

Unfortunately, customer experience tends to fall flat at the point when customers are in need to speak to a professional and/or to consult on professional matters. They either face very unresponsive customer service or a non-dedicated customer service consultant to deal with their issues. 

There are two main reasons behind this:

• Limitations of technology offered:

The technology present today can handle routine and straightforward tasks. Incorporating a company is a routine task. Building a portal for customers to hand over information is a routine task.  However, technology today (as of now) is not able to replace complex tasks such as providing professional advice which still require human interaction.  E-commerce tech giants have built smart chatbots to handle most of their customer requests and the best chatbots among them are those that can seamlessly “hand over” the issue to a human when the chatbot is unable to resolve them.  This highlights the importance and relevance of customer service individuals for businesses today.

• Tech-only offering:

Many tech entrants in the professional services industry had built their delivery model around the “technology” and not around “human”. They have neglected the relevance of professional humans.  Given that resources and capital are scarce and when money has been spent to develop the tech portal, these tech entrants are left with limited resources to hire experienced professionals with deep experience. As such, it compromises the experience mix of the staff. Further, when these tech-entrants client base expand, their problems worsen as clients’ requests for attention and professional care increases which causes strains on their limited staffing pools, leading to service delays and down time.

2. 
   

   The “Specialist” trap

There are also many service providers that have marketed themselves as specialists for startups, funds and other business segments.  This has created some noise in the market and has led to some form of “washing”.

Let us elaborate with the following example:

Party A, a new corporate services provider with 3 years of operating experience markets itself as a startup/founder business specialist which has deep experience in fund raising.  

Party B is a corporate services provider that has existed for 10 years and its website states that it is a corporate services provider which also provides other outsourcing services such as accounting and tax. 

When comparing the two, it is easy to perceive that Party A is a specialist in fund raising and startup companies that has series A to X funding needs. Such perceptions may not be true as Party B could be the firm with deep experience dealing with shares allotment, corporate actions and mergers and acquisitions.

Given the limited years of operations, Party A may have only dealt in incorporating entities and had not advised on shares allotment, different classes of shares and the requirements of the Companies Act 1967.

3. 
   

   The race to the bottom

The corporate services industry in Singapore is heavily fragmented.  Disregarding the top 25 largest professional firms in the Singapore market, it has been estimated that there are 3,500 to 4,000 service providers.  Some of these are sub-units of large audit firms and law firms. Many others are individuals/sole proprietors, serving niche clients. Due to the intensity of competition in the market, pricing for services is also multi-tiered.

It is easy for businesses to focus mainly on pricing when choosing the corporate secretarial firm to work with. It is true that within a range of fees in a fragmented market, businesses could still obtain fair service and technically accurate advice from service providers.  It is also true that below a range of fees, it becomes a game of gamble to expect good professional delivery at those price points.

Trained professionals with experience do not come cheap. Reputable firms must pay competitively to retain talents, experienced staff and pay office rent in business districts to ensure they are close to their clients and business activities. Corporate service providers are regulated entities that must comply with statutory requirements. Adhering to compliance requirements on AML/KYC, ongoing screening of customer based on risk ratings, sensitive data protection, and personal data protection add on to professional firms’ operating costs.

So, when a firm offers pricing that is too good to resist, think again, could this indicate that this firm had underinvested in compliance, training and hiring the right people to deliver its services?

Getting to the heart of matters

To help businesses choose their corporate secretarial services provider, below are some suggestions on the firm’s characteristics to consider as part of due diligence:

• Comprehensive Understanding of Secretarial Technical Knowledge:

An experienced corporate secretary brings a deep understanding of fundamental secretarial concepts and technical knowledge essential for ensuring compliance with legal requirements and industry standards. Does the firm have corporate secretaries with deep technical knowledge?

• Efficient Handling of Corporate Actions:

Skilled in navigating corporate exercises, a proficient corporate secretary can effectively liaise with the company and legal representatives, ensuring smooth and hassle-free corporate actions. Does the firm have secretaries with experience in handling corporate actions?

• Priority on Closing Corporate Actions:

With investors prioritising registration with regulatory bodies, such as the registrar, an adept secretarial agent ensures swift and accurate completion of all necessary closing procedures, instilling confidence among stakeholders. Is the firm able to support clients beyond office hours and prioritise the tasks to close out transactions?

• Designated Point of Contact (PIC):

Delegating corporate assignments to a team dedicated PIC(s) within the secretarial team ensures streamlined communication and efficient management of tasks. Does the firm provide dedicated PIC(s) to customers for feedback and communication of tasks to be delivered?

• Adherence to Timelines:

Recognising the importance of timely completion, an experienced agent ensures that corporate actions are executed promptly, especially during critical periods, thereby avoiding delays and maintaining compliance. Does the firm take steps to ensure agreed upon timelines are always met?

• Meticulous Document Management:

A proficient agent maintains meticulous records, including statutory documents and registers, ensuring transparency, accuracy, and regulatory compliance at all times. Does the firm have a systematic process to ensure completeness of documents that can be readily accessible upon request?

• Expertise in Regulatory Filings:

Equipped with knowledge of regulatory requirements, an experienced agent adeptly lodges relevant transactions with regulatory authorities such as the Accounting and Corporate Regulatory Authority (ACRA), minimizing errors and ensuring compliance. Does the firm produce accurate and complete documentation for purposes of regulatory filings?

 

In conclusion, the decision to engage an experienced corporate secretarial services agent is a strategic imperative for businesses in Singapore. From ensuring regulatory compliance to enhancing corporate governance and streamlining administrative processes, corporate secretarial agents play a pivotal role in driving operational excellence and mitigating risks. By partnering with the right firm with seasoned professionals who possess the requisite knowledge and expertise, businesses can focus on growing the business and optimising operations with confidence and achieve sustainable growth in the long term.

 

About Ledgen

Ledgen Group is a premier professional firm with 20 years of experience providing accounting, tax, corporate secretarial and payroll services to businesses. It is headquartered in Singapore and has direct presence in Malaysia and Hong Kong. Ledgen Group also operates in other parts of Asia, Europe and America through our affiliates network and partners globally.  For queries on our services, please contact us @ enquiry@ledgengroup.com.

 

#outsourcing #professionalservices #corporatesecretarial #cosec

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