Proposing Company Secretary Fees for a Variable Capital Company (VCC) in Singapore

Proposing Company Secretary Fees for a Variable Capital Company (VCC) in Singapore | Bestar

VCC Company Secretary Fee Proposal

When proposing Company Secretary fees for a Variable Capital Company (VCC) in Singapore, it's crucial to understand the unique requirements and complexities associated with this fund structure. VCCs have specific compliance obligations, which can influence the scope and cost of secretarial services.

Here's a breakdown of factors to consider and a general fee proposal:

I. Understanding the Role and Legal Requirements of a VCC Company Secretary

A VCC in Singapore must appoint a company secretary within six months of its incorporation date. Key requirements for a VCC company secretary are:

• Natural Person: The secretary must be an individual, not a corporation or other entity.

• Ordinarily Resident in Singapore: The individual must be ordinarily resident in Singapore.

• Distinct from Sole Director: The sole director of a VCC and the company secretary cannot be the same person.

• Qualifications: The secretary should meet certain professional qualifications, such as:

  • Having held the office of secretary of any company or VCC for at least 3 years in the preceding 5 years.

  • Being a qualified person under the Legal Profession Act.

  • Being a public accountant.

  • Being a member of the Institute of Singapore Chartered Accountants, Chartered Secretaries Institute of Singapore, Association of International Accountants (Singapore Branch), or Institute of Company Accountants, Singapore.

• Vacancy: The position must not remain vacant for more than six months.

II. Factors Influencing VCC Company Secretary Fees

The fees for VCC company secretarial services are influenced by several factors:

1. Complexity of the VCC Structure:

   
   

   • Standalone VCC vs. Umbrella VCC with Sub-Funds: Umbrella VCCs with multiple sub-funds will naturally have higher secretarial fees due to the increased administrative and compliance burden for each sub-fund.

   • Number of Sub-Funds: Each additional sub-fund requires separate administration, including maintaining its own registers and potentially separate reporting.

     
     

2. Scope of Services Required:

   
   

   • Basic Compliance: This includes mandatory annual filings (Annual Returns with ACRA), maintaining statutory registers (directors, members, secretaries, managers, auditors), preparing AGM/EGM documents, and providing a registered office address.

   • Ad-Hoc Services: This can include drafting specific resolutions (e.g., for share transfers, capital reductions, changes in constitution), changes in VCC/sub-fund name, changes in directors/managers, registration of charges, and XBRL filing of financial statements (if required).

   • Advisory and Consultation: Providing guidance on VCC Act compliance, corporate governance best practices, and regulatory changes.

   • Ancillary Services: Services like nominee director provision, bookkeeping, accounting, tax filing, and payroll services will incur additional charges.

     
     

3. Activity Level of the VCC:

   
   

   • Transaction Volume: VCCs with a higher volume of transactions (e.g., frequent capital calls, redemptions, investments) will require more extensive record-keeping and corporate actions, increasing secretarial workload.

   • Frequency of Meetings: More frequent board and shareholder meetings mean more administrative support for preparation and minute-taking.

     
     

4. Experience and Reputation of the Service Provider:

   
   

   • Established and reputable corporate secretarial firms with specialized VCC expertise may charge higher fees, but often offer more comprehensive support and peace of mind.

     
     

5. Technology and Efficiency:

   
   

   • Firms utilizing advanced technology for compliance and record-keeping might offer more efficient services, potentially impacting pricing.

III. Proposed Fee Structure for VCC Company Secretary Services

Given the unique nature of VCCs, the fees will generally be higher than for a standard private limited company in Singapore.

A. Annual Retainer for Basic Corporate Secretarial Services (Estimated)

This covers the fundamental statutory compliance requirements.

• For a Standalone VCC: S$1,800 - S$3,500 per annum

• For an Umbrella VCC (excluding sub-funds): S$2,500 - S$4,500 per annum (Base fee for the umbrella structure)

B. Per Sub-Fund Annual Retainer (for Umbrella VCCs)

• Per Sub-Fund: S$800 - S$1,500 per annum (This is in addition to the umbrella VCC base fee). This fee accounts for the additional registers, resolutions, and annual filings associated with each sub-fund.

C. Ad-Hoc Services (Charged Separately, Estimated)

These are indicative fees and will vary based on complexity and time spent.

• Drafting of routine Directors' / Members' Resolutions: From S$150 - S$300 per resolution

• Processing Change in Director / Manager / Secretary Particulars: S$100 - S$200 per change

• Processing Share Transfers / Capital Reductions: From S$300 - S$800 per transaction

• Change of VCC / Sub-Fund Name: S$150 - S$300 (excluding ACRA fee of S$15)

• XBRL Filing of Financial Statements (if required): From S$500 - S$1,000 (depending on complexity)

• Registered Office Service: S$300 - S$500 per annum (often included in a package)

• Preparation and Filing of Annual Return (excluding ACRA fee): S$200 - S$400 (ACRA fee for VCC Annual Return is S$1,600)

• Consultation/Advisory (beyond routine compliance): Hourly rates typically range from S$200 - S$400 per hour.

D. Initial Setup/Incorporation Services (One-time, if engaging for VCC incorporation)

Many service providers offer bundled packages that include incorporation and the first year of company secretary services.

• VCC Incorporation Package (including 12 months Company Secretary & Registered Address): S$10,000 - S$15,000 (This includes the ACRA incorporation fee of S$8,000).

• Registration of additional Sub-fund(s): S$450 one-time setup fee + annual maintenance fee (as above) (excluding ACRA fee of S$400 per sub-fund).

Important Considerations for the Client:

• Clarity on Scope: Ensure the proposed fees clearly outline what is included and excluded in the annual retainer and what will be charged as ad-hoc services.

• Experience with VCCs: It is highly recommended to engage a company secretary firm with proven experience and expertise in VCC compliance and administration.

• Technology and Efficiency: Inquire about the firm's use of technology to streamline processes and enhance efficiency.

• Responsiveness and Communication: Consider the firm's responsiveness and communication channels.

• Value-Added Services: Beyond basic compliance, assess if the firm offers valuable advisory services that can benefit the VCC.

This proposal provides a comprehensive overview of VCC company secretary fees in Singapore, considering the various factors that influence pricing. It is always advisable for the client to request detailed quotes from several reputable service providers to compare offerings and find the best fit for their specific VCC needs.

How Bestar can Help

Bestar plays a crucial role in ensuring a company's compliance with statutory and regulatory requirements, allowing the management to focus on its core business activities. For Variable Capital Companies (VCCs) in Singapore, our assistance is even more critical due to the unique complexities of this fund structure.

Here's a breakdown of how Bestar can help a VCC:

I. Core Statutory Compliance and Administration for VCCs

1. Incorporation and Setup:

   • VCC Incorporation: Guiding through the entire VCC incorporation process with ACRA (Accounting and Corporate Regulatory Authority), preparing necessary documents, and submitting the application. This includes advising on the VCC Act and relevant regulations.

   • Sub-Fund Registration: Assisting with the registration of sub-funds under an umbrella VCC, including preparing the required documentation and filing with ACRA.

   • Constitution/Memorandum & Articles of Association: Advising on and drafting/reviewing the VCC's constitution to ensure compliance with the VCC Act and its specific investment objectives.

2. Maintaining Statutory Registers:

   • Directors' Register: Maintaining accurate and up-to-date records of all directors, including their personal details, appointments, and resignations.

   • Secretaries' Register: Maintaining records of all company secretaries.

   • Members' Register: Keeping an accurate register of shareholders/investors, including details of shareholdings, transfers, and redemptions (crucial for VCCs with variable capital).

   • Managers' Register: Maintaining records of the VCC's fund managers.

   • Charges Register: Recording details of any charges created by the VCC.

3. Annual Filings and Reporting:

   • Annual Return Filing with ACRA: Preparing and filing the VCC's annual return with ACRA within the stipulated timeframe. This is a mandatory requirement for all VCCs.

   • Financial Statements Filing (if required): Advising on and assisting with the filing of financial statements in XBRL format, if applicable to the VCC.

   • Notifications of Changes: Promptly notifying ACRA of any changes to the VCC's particulars, such as changes in directors, managers, secretaries, registered office address, or constitution.

4. Meeting Administration:

   • Board Meetings: Preparing board resolutions, minutes, and related documents for directors' meetings.

   • Shareholder Meetings (AGMs/EGMs): Preparing notices, agendas, minutes, and proxy forms for Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). While VCCs are exempt from holding AGMs if they meet certain criteria, Bestar will advise on these exemptions and assist if an EGM is required.

5. Registered Office Service:

   • Providing a statutory registered office address in Singapore, which is a legal requirement for all companies incorporated in Singapore.

   • Handling and forwarding official mail received at the registered office.

II. Specialized Support for VCCs

1. Understanding VCC Act Compliance:

   • Expert Guidance: Providing expert advice on the intricacies of the VCC Act, subsidiary legislation, and related MAS (Monetary Authority of Singapore) regulations that specifically apply to VCCs.

   • Regulatory Updates: Keeping the VCC informed of any changes in the VCC Act or related regulations that may impact its operations.

2. Capital Management Support:

   • Share Issuance and Redemption: Assisting with the documentation for issuance and redemption of shares/units, which is a fundamental feature of VCCs. This includes preparing board resolutions, updating the members' register, and ensuring proper regulatory filings.

   • Capital Calls and Distributions: Supporting the administrative aspects of capital calls from investors and distributions to investors, ensuring proper record-keeping.

3. Corporate Governance Best Practices:

   • Advising the VCC's board and management on corporate governance best practices tailored for investment funds, enhancing transparency and accountability.

4. Liaison with Authorities:

   • Acting as a liaison between the VCC and regulatory authorities such as ACRA and MAS for compliance matters, inquiries, and filings.

III. Value-Added and Ad-Hoc Services

1. Drafting and Reviewing Resolutions: Preparing specific resolutions for various corporate actions, such as:

   • Changes to investment policies.

   • Appointment/resignation of investment managers or service providers.

   • Amendments to the VCC's constitution or sub-fund documents.

   • Loan agreements, charges, and other financial instruments.

2. Due Diligence Support: Assisting with corporate secretarial due diligence for mergers, acquisitions, or other corporate transactions involving the VCC.

3. Nominee Director Services: In some cases, and with appropriate safeguards, a secretarial firm may offer nominee director services if the VCC requires a resident director.

4. Assistance with Other Licenses/Registrations: While not directly secretarial, some firms can assist with or refer the VCC to other service providers for MAS licensing applications (e.g., Fund Management Company license) or other regulatory registrations.

5. Document Archiving and Management: Maintaining a secure and organized archive of all corporate records and documents.

By outsourcing these critical functions to Bestar, a VCC's directors and managers can:

• Ensure Compliance: Minimize the risk of non-compliance with Singaporean corporate laws and regulations, avoiding penalties and reputational damage.

• Reduce Administrative Burden: Free up valuable time and resources that can be redirected towards core fund management activities and investment strategies.

• Access Expertise: Benefit from specialized knowledge of VCC-specific requirements and best practices.

• Maintain Good Standing: Ensure the VCC maintains its good standing with ACRA and MAS.

In essence, Bestar acts as the compliance backbone for a VCC, providing the necessary administrative and advisory support to operate smoothly and legally in Singapore's dynamic financial landscape.

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