Can AI Replace Company Secretaries in Malaysia? Legal Reality vs Automation

Can AI Replace Company Secretaries in Malaysia? Legal Reality vs Automation

Navigating company secretarial requirements in Malaysia can feel complex—especially for directors who are focused on growing their business rather than keeping up with regulatory changes.

Many companies choose to work with Fareez Shah & Partners, a professional firm that supports businesses with compliant, structured, and practical company secretarial solutions.

With the right guidance in place, directors can focus on strategy and operations while ensuring their statutory obligations are properly managed.

In Malaysia, the role of a company secretary is not optional, ceremonial, or administrative. Under modern Malaysian company law, the company secretary is a mandatory officer of the company, entrusted with safeguarding compliance, governance, and corporate integrity.

Since the introduction of the Companies Act 2016, the responsibilities of a company secretary in Malaysia have expanded significantly.

Today, a company secretary plays a vital role in ensuring that directors discharge their duties lawfully, statutory filings are accurate and timely, and corporate decisions are properly documented.

As businesses increasingly ask whether AI can replace company secretaries, it has become even more important for directors to understand what the role truly involves—and where human professional judgment remains essential.

Legal Requirement to Appoint a Company Secretary in Malaysia

Under the Companies Act 2016, every company incorporated in Malaysia—whether a Sdn Bhd or a public company—must appoint at least one qualified company secretary within 30 days of incorporation.

The law treats the company secretary as an officer of the company, alongside directors. This means the secretary carries statutory responsibilities and may be personally liable for non-compliance.

Failure to appoint or maintain a company secretary for more than 30 days constitutes an offence and may result in:

• Financial penalties imposed on the company
• Fines imposed on directors
• Regulatory enforcement by Companies Commission of Malaysia

Who Can Act as a Company Secretary in Malaysia?

Not everyone can legally serve as a company secretary. Malaysian law requires that the secretary must:

• Be a natural person aged 18 or above
• Be a Malaysian citizen or permanent resident
• Ordinarily reside in Malaysia
• Be licensed or registered with SSM or a recognised professional body

Recognised qualification pathways include:

All candidates must also satisfy the “fit and proper person” requirement, ensuring they are not bankrupt or convicted of offences involving fraud or dishonesty.

Practising Certificate (PC): Why It Matters to Directors

Since 2019, all company secretaries must hold a valid Practising Certificate (PC) issued by SSM. A valid PC confirms that the secretary:

• Is actively practising
• Meets Continuing Professional Education (CPE) requirements
• Is updated on regulatory changes, including Companies Act amendments and SSM directives

From 2025 onward, renewal requirements have tightened:

• Proof of active appointments is mandatory
• AML, CFT, and sanctions-related training is compulsory from 2026

For directors, this means engaging a secretary without a valid PC exposes the company to invalid filings, penalties, and regulatory risk.

Core Duties of a Company Secretary in Malaysia

The role of a Malaysian company secretary can be grouped into three core functional pillars.

1. Statutory Compliance and SSM Filings

A company secretary is the company’s primary compliance officer, responsible for ensuring that statutory obligations are met accurately and on time.

Key duties include:

• Filing the Annual Return
• Lodging financial statements
• Reporting changes in directors, shareholders, and share capital
• Maintaining statutory registers (Members, Directors, Charges, Beneficial Owners)

Late or inaccurate filings may trigger penalties, compounds, or strike-off proceedings.

2. Board and Shareholder Meeting Governance

Company secretaries ensure that corporate decisions are made procedurally and legally.

Responsibilities include:

• Issuing meeting notices
• Preparing agendas and resolutions
• Recording accurate minutes
• Advising on quorum, voting thresholds, and statutory approvals

Meeting minutes are legal records, not administrative notes. In disputes, these documents are often decisive.

3. Governance Advisory and Risk Prevention

Modern company secretaries act as governance advisors, particularly for SMEs where directors may lack legal expertise.

They advise on:

• Directors’ duties and liabilities
• Conflict-of-interest disclosures
• Share issuances and restructuring
• Regulatory implications of business decisions

In practice, a competent company secretary helps directors avoid mistakes before they become legal problems.

Beneficial Ownership Reporting: A Key Compliance Obligation

Following amendments effective in 2024, Malaysian companies must now identify and report their beneficial owners—individuals who ultimately own or control the company.

A person may qualify as a beneficial owner if they hold 20% or more of shares or voting rights, or exercise significant influence or control.

Company secretaries assist by:

• Issuing statutory notices
• Maintaining the Beneficial Ownership Register
• Submitting information through SSM’s electronic system

Digital Compliance, MBRS, and XBRL Reporting

Most statutory filings in Malaysia are now submitted digitally via the Malaysian Business Reporting System (MBRS) using XBRL format.

Company secretaries are responsible for:

• Ensuring accurate XBRL tagging
• Managing digital certificates
• Preventing filing rejections caused by technical errors

This shift means that technical accuracy is now as important as legal knowledge.

Can AI Replace Company Secretaries in Malaysia?

With the rapid adoption of AI tools, many directors now ask: Can AI replace a company secretary?

The short answer is no—but AI is changing how company secretarial work is done.

What AI Can Assist With

AI and automation tools are increasingly used to:

• Track statutory deadlines
• Generate reminders for filings
• Populate standard forms
• Manage digital document storage
• Flag basic compliance gaps

These tools improve efficiency, speed, and accuracy for routine administrative tasks.

What AI Cannot Replace

Despite these advances, AI cannot legally or practically replace a company secretary in Malaysia because:

• AI cannot hold a Practising Certificate
• AI cannot assume personal legal liability
• AI cannot exercise professional judgment
• AI cannot advise directors on ethical or contextual governance issues
• AI cannot act as an accountable officer under the Companies Act

Regulators require a human, licensed professional to be responsible for filings and certifications.

The Reality: AI + Professional Secretaries

In practice, the future lies in AI-assisted company secretarial services, where technology handles repetitive tasks while licensed professionals provide oversight, judgment, and accountability.

This hybrid model improves efficiency while preserving the legal safeguards directors rely on.

In-House vs Outsourced Company Secretary: What Most SMEs Choose

Most Malaysian SMEs outsource their company secretarial function due to cost efficiency and reduced risk.

Outsourcing reduces the risk of knowledge gaps, staff turnover, and regulatory oversight failures.

Why the Company Secretary Role Remains Critical

For directors, a company secretary is not merely a statutory requirement. A competent secretary:

• Protects directors from avoidable liability
• Ensures filings are accurate and defensible
• Maintains corporate credibility with regulators
• Supports growth, restructuring, and long-term compliance

As regulations become stricter, the cost of poor secretarial support often far exceeds the cost of doing things properly.

Frequently Asked Questions (FAQ)