Section 240 of the Companies Act 2016 provides that the office of company secretary shall not be left vacant for more than 30 days at any one time. The rule is not confined to the period after incorporation — it applies every time the office falls empty. Liability rests on the company and its directors under s.235(4), not on the secretary who left, and since the Act sets no express penalty the s.588 general penalty applies.
- s.240 wording is at any one time — it is not a one-off post-incorporation grace period
- s.236(2) separately requires the first secretary to be appointed within 30 days of incorporation
- s.235(1) requires a secretary at all times, so a vacancy breaches two provisions at once
- s.235(4) makes the company and every director liable — not the departed secretary
- Neither s.235 nor s.240 states a penalty, so s.588 supplies one
- Under s.588(2) an individual faces a fine up to RM50,000 or up to three years imprisonment, or both
Who this applies to: Directors of a Sdn Bhd whose secretary has resigned, been removed, or become disqualified.
On this page
Most Sdn Bhd directors discover this rule the way you discover a smoke alarm battery: late, and because something else has already gone wrong. The secretary resigned, the replacement quote looked expensive, and three months later the company is still shopping around.
Every one of those days after day 30 is a continuing statutory breach — and it is the directors, not the departed secretary, who own it.
What s.240 actually says
The provision is one sentence:
The office of the secretary of a company shall not be left vacant for more than thirty days at any one time.
Read the last four words. Most guides state this as a 30-day window after incorporation. It is not. Section 240 is a continuing obligation that applies to every vacancy across the company’s life. The post-incorporation deadline is a different provision — s.236(2), which requires the first secretary to be appointed within 30 days from the date of incorporation.
The two are frequently collapsed into one sentence, which leaves directors believing that once the first secretary is in place the rule is spent. It is not.
The breach is doubled
A vacancy running past 30 days contravenes two provisions at once.
| Provision | What it requires |
|---|---|
| s.235(1) | The company shall have at least one secretary — an at-all-times duty |
| s.240 | The office shall not be left vacant more than 30 days at any one time |
Section 235(1) has no grace period at all. Section 240 is best understood as the enforcement tolerance around it: SSM will not treat a brief gap as a breach, but 30 days is the limit of that tolerance.
Who is liable on day 31
Section 235(4) is the answer, and it is short: the company and every director who contravene the section commit an offence.
The secretary who resigned is not liable. They no longer hold the office, and under s.237(4) their exposure is limited to acts and omissions during their tenure. Practice Note 4/2018 places the replacement duty squarely on the company, stating that where the resigning secretary is the only secretary, the appointment of a new secretary must be effected within 30 days from the day the office becomes vacant.
Directors occasionally argue the outgoing secretary should have stayed on until a replacement was found. Section 237 imposes no such duty.
What the penalty is
Neither s.235 nor s.240 states a fine. Both simply create an offence, or in the case of s.240, a prohibition. That is where s.588 does the work.
Section 588(2) provides that where a penalty is not expressly mentioned, a person guilty of an offence under the Act is liable, in the case of an individual, to a fine not exceeding RM50,000 or imprisonment for a term not exceeding three years or to both, and in the case of a person other than an individual, to a fine not exceeding RM50,000.
Because “individual” means a natural person under s.588(3), each director is exposed personally, separately from the company.
The practical damage arrives sooner than prosecution
Prosecution is rare. Paralysis is not. Statutory lodgements are executed and lodged by the secretary in that capacity, and SSM requires the practising certificate number on documents lodged with the Registrar. With no secretary in office, the company cannot cleanly file changes of directors, allotments, charges or the annual return — and those deadlines keep running.
A vacancy therefore tends to generate a second layer of defaults, each with its own penalty, well before anyone at SSM asks why the office is empty.
Common mistakes
- Reading s.240 as a post-incorporation grace period. It says at any one time, and it governs every vacancy.
- Assuming the outgoing secretary stays on the hook. Liability under s.235(4) attaches to the company and every director.
- Treating the corporate profile as proof of compliance. A former secretary’s name remains displayed until the company lodges the s.58 notification, so the profile can show a secretary the company no longer has.
- Letting the search for a cheaper firm run past the deadline. Appoint someone, then switch later if you want to.
- Forgetting the incoming secretary needs a valid practising certificate. Appointing a disqualified person under s.238 does not stop the clock.
What’s next
If the vacancy arose from a resignation, check whether the secretary lodged anything with SSM under Practice Note 4/2018, because that determines what the public record now shows. If a replacement is lined up, the handover of statutory registers, minute books and system access is what decides whether they can file anything on your behalf in the first place.
Does the 30-day rule only apply after incorporation?
No, and this is the most common misstatement. Section 236(2) requires the first secretary to be appointed within 30 days of incorporation. Section 240 is a separate and continuing rule: the office shall not be left vacant for more than 30 days at any one time. It applies to every vacancy over the company's life, not just the first.
Who is liable if the office stays vacant past 30 days?
The company and its directors. Section 235(1) requires the company to have at least one secretary, and s.235(4) provides that the company and every director who contravene the section commit an offence. The outgoing secretary is not liable for the vacancy, because they no longer hold the office.
What is the penalty for leaving the secretary's office vacant?
Neither s.235 nor s.240 specifies a penalty. Section 588(2) of the Companies Act 2016 supplies the general penalty where none is expressly mentioned: for an individual, a fine not exceeding RM50,000 or imprisonment for a term not exceeding three years, or both; for a person other than an individual, a fine not exceeding RM50,000.
Can the company keep operating without a secretary?
It can trade, but it cannot comply. Statutory lodgements are made by the secretary in that capacity, and SSM's practice notes confirm a person who has ceased to hold the office may no longer lodge documents for the company. A company without a secretary is, by definition, in breach of s.235(1).
The following are deliberately unstated or described only qualitatively until confirmed by a subject-matter expert:
- Confirm whether SSM applies any compound or administrative penalty for s.240 or s.235 breaches in practice, and at what rate — SSM does not publish a compound schedule for these sections alongside the Act text
Sources
- Companies Act 2016 (Act 777), reprint as at 1 August 2022 — SSM
- Practice Note No. 4/2018 — Procedures on Resignation of Secretary under Section 237 — SSM
Change history
| Version | Date | Change | By |
|---|---|---|---|
| 01.00 | 20 Jul 2026 | Approved and published. | — |