Company Secretary and the Real Role

Company Secretary and the Real Role
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A company secretary is an individual or legal entity not performing the functions of managing the company, but covering up the activities of a real leader.

On behalf of the company, its head acts in the economic turnover and relations with government bodies. All activities of the organization are his responsibility.

Currently, the number of cases of bringing the heads of companies to subsidiary liability in the bankruptcy proceedings of the organizations headed by them has increased.

If the manager in the company is nominal, he simply agreed to indicate himself as a company secretary when registering the company, but in fact, a completely different person is in charge of the affairs, this does not relieve him of responsibility.

How to understand whom to choose?

A secretary of the company comes up during tax audits of its counterparties, as well as during the bankruptcy of the company.

The tax authorities, trying to prove the bad faith of the taxpayers, interrogate the person indicated in the Unified State Register of Legal Entities as the secretary of his counterparty.

The nomination of the head is a weighty argument of the inspectors in a tax dispute

What signs confirm the role

  • the person declares that he was not a secretary of the company (for example, registration was carried out using a lost passport
  • the citizen directly confirms that he handed over his passport for registration in the Unified State Register of Legal Entities for a fee, but in fact, did not manage the company; – confirms his management, but cannot explain what the company is doing, tell about its activities
  • Immediately after being appointed to the position, the citizen transferred the management of the company by proxy and did not deal with the affairs of the company anymore.

The company’s management is performed by someone completely different. The company secretary for singapore SME handles the documents,

Subsidiary liability of a company secretary in bankruptcy

By agreeing to become a secretary, a citizen must be aware that non-participation in the real activities of the company will not exempt him from either administrative or criminal liability, and in the event of the organization’s insolvency, from subsidiary liability.

As a rule, formal and real managers bear subsidiary responsibility for the company’s debts jointly and severally.

The amount of money collected from the company secretary can be reduced if he disclosed information about the real director and the hidden property of the company, and thanks to this, the company’s debts can be paid off.

In another case, the secretary was brought jointly and in connection with the impossibility of full repayment of the creditors’ claims through their fault. Under the guise of concluding loan agreements, more than a billion rubles were withdrawn from the company.

The secretary tried to prove that the company was led by its founders, but he did not receive any personal benefit. The court of the first instance heard him and released him from responsibility.

Appointment of company secretary

Often, debtor companies appoint a director just before bankruptcy or after supervision. Failure to transfer the documentation to the bankruptcy commissioner entails the presumption of the director’s guilt in causing losses to creditors and his subsidiary liability.

In this case, the secretary cannot refer to the fact that the previous manager did not give him the documents, the Supreme Court indicated that this does not exempt the secretary from the obligation to restore the documentation and ensure the proper operation of the enterprise

The secretary must prove

The secretary still has to prove his role, a simple reference to the fact that he signed contracts at the direction of the beneficiary and did not have personal benefit, will not allow him to be relieved of responsibility, nor to reduce it

Even the approval by the general meeting or the board of directors of the transaction, as a result of which damage was caused to creditors, does not relieve the secretary from subsidiary liability Resolution of the Plenum of the Supreme Court of the Singapore Federation

At the same time, the secretary must prove the conscientiousness of his actions. Even the disclosure of information about the beneficiaries of the e-commerce platform businesses and the location of the property of the debtor will not be completely exempt from subsidiary liability.

Criminal liability of secretary

When agreeing to be a secretary, remember that the creation of a company through dummies is a crime, the responsibility for which is provided by the Criminal Code of the Singapore Federation.

Responsibility to founders

If the secretary follows the instructions of the beneficiaries, this will not exempt him from the claims of the founders in the event of causing losses to the corporation. Even the execution of the decision of the general meeting does not relieve the head of liability for losses incurred by the company.

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Alfred Williams, a distinguished business writer, navigates the corporate landscape with finesse. His articles offer invaluable insights into the dynamic world of business. Alfred's expertise shines, providing readers with a trustworthy guide through the complexities of modern commerce.