For any business, major transactions like a merger or acquisition (M&A), a significant fundraising round, or a substantial bank loan are pivotal moments. These events are almost always preceded by a rigorous process known as due diligence.During this intense period of scrutiny, your company’s corporate secretary moves from a background compliance role to a central figure, ensuring the entire process runs smoothly and efficiently.

 

Understanding the corporate secretary’s function during due diligence reveals their true value as a guardian of your company’s legal and administrative integrity.

 

What is Due Diligence?

Due diligence is a comprehensive investigation or audit of a business to confirm the facts and details of a matter under consideration. Before an investor injects capital or another company proceeds with an acquisition, they will want to look “under the hood.” They need to verify that your company is in good legal and financial standing, assess potential risks, and ensure there are no hidden liabilities. A significant portion of this investigation focuses on corporate governance and statutory compliance.

 

The Corporate Secretary: The Keeper of Corporate Truth

The corporate secretary is legally responsible for maintaining the company’s statutory books and records as required by the Singapore Companies Act 1967. They are the official custodians of the company’s corporate history, from its incorporation documents to minutes of board meetings and shareholder resolutions. This unique position makes them the primary point person for any corporate due diligence request.

 

Here’s how a proficient corporate secretary facilitates the process:

1. Preparing and Managing the ‘Data Room’

In a due diligence exercise, the investigating party will request a large volume of documents. These are typically organized in a secure physical or virtual “data room.” Your corporate secretary is responsible for populating this data room with all the necessary corporate records, ensuring everything is meticulously organized, complete, and easy for lawyers and auditors to review.

 

2. Compiling and Certifying Core Corporate Documents

The backbone of any due diligence checklist is the company’s core records. Your corporate secretary will be tasked with preparing and, where necessary, certifying true copies of essential documents, including:

  • The company’s Certificate of Incorporation and Constitution.
  • The latest Business Profile from the Accounting and Corporate Regulatory Authority (ACRA).
  • The complete and up-to-date Statutory Registers, including the Register of Members, Register of Directors, and Register of Charges.
  • Minutes of all Board of Directors’ meetings and Annual/Extraordinary General Meetings.
  • Copies of all signed Board and Shareholder Resolutions, which provide evidence of approval for major corporate actions.
  • Details and documentation related to the allotment and transfer of shares.

 

3. Ensuring Records are Accurate and Compliant

A proactive corporate secretary doesn’t just wait for a due diligence request to arise. They perform regular “health checks” to ensure all records are current and that all required filings with ACRA are up to date. When a due diligence process begins, this preparedness is invaluable. It prevents last-minute scrambles to fix errors or omissions, which could otherwise raise red flags for potential investors or acquirers.

A due diligence process is intensive and leaves no room for error. Having an experienced professional managing your corporate records is crucial. The expert team at Raffles Corporate Services Pte Ltd ensures your company is always prepared for scrutiny, providing confidence to all stakeholders.

 

4. Answering Governance-Related Queries

The reviewing party will have numerous questions about the company’s decision-making and governance history. The corporate secretary is uniquely positioned to answer these queries accurately. They can provide context on meeting procedures, confirm that transactions were properly authorised by the board, and verify shareholder approvals, demonstrating a history of sound corporate governance.

 

5. Liaising with Lawyers, Auditors, and Investors

The corporate secretary acts as a crucial bridge between the company’s management and the external legal and financial teams conducting the due diligence. They manage the flow of information, respond to requests promptly, and ensure that the right people get the right information, streamlining what could otherwise be a chaotic process.

 

Conclusion: Your Invaluable Partner in Growth

Far from being a mere administrator, a skilled corporate secretary is an invaluable asset during critical transactions. Their meticulous record-keeping and deep knowledge of the company’s statutory history provide the foundation of trust and transparency that is essential for any successful due diligence process. Their work gives investors, lenders, and partners the confidence they need to move forward, paving the way for your company’s future growth.

For further assistance or inquiries, you can contact the Raffles Corporate Services team via email at [email protected].

 

Yours sincerely,
The editorial team at Raffles Corporate Services