The Accounting and Corporate Regulatory Authority (ACRA) of Singapore is running a public consultation exercise from 17 December 2021 to 28 January 2022 to seek feedback from the public on proposed amendments to the Companies Act, Accountants Act, ACRA Act, Business Names Registration Act, Limited Liability Partnerships Act, Limited Partnerships Act, and Variable Capital Companies Act 2018 (collectively, the ACRA-administered legislation) relating to data, digitalization, and corporate transparency.
ACRA previously ran a public consultation on proposed amendments to the Companies Act in July 2020 and is now proposing additional amendments to the act and the other aforementioned legislation. The most recent round of proposed amendments seek to:
- empower ACRA to draw data from other agencies or entities to improve filing convenience and data accuracy;
- strike a balance between corporate transparency and personal data privacy;
- facilitate digital correspondences with businesses to improve efficiency and support sustainability efforts;
- enhance transparency of beneficial ownership of companies and limited liability partnerships (LLPs) to maintain Singapore’s reputation as a trusted financial hub; and
- streamline processes for service of summons and striking off to facilitate compliance.
Proposals Relating to Personal Data Collection and Use, Filing Convenience, and Digital Correspondences
As the national business registry, ACRA collects documents and information relating to business entities and public accountants and provides public access to such data information to enhance corporate transparency as well as facilitate business activity and economic growth.
The proposed amendments by ACRA seek to strike a balance between corporate transparency and personal data privacy. ACRA seeks to address concerns that individuals may have over the disclosure of the personal data that they file with ACRA by reducing the amount of data which must be filed with ACRA, while at the same time responding to requests from government agencies and private institutions for ACRA to share more business data for research, enforcement, and verification purposes.
The proposed amendments seek to:
- provide flexibility for ACRA to specify additional personal data relating to individuals that may need to be collected and to introduce a tiered disclosure framework to calibrate the disclosure of personal data;
- standardise the references to the “name” of individuals in ACRA-administered legislation;
- partially mask the identification number of all individuals in ACRA’s registers which are made available to the public;
- introduce a “contact address” as the default address of individuals that will be shown to the public, instead of the individual’s residential address; and
- provide for the power for ACRA to be able to draw data from specified government agencies for the purpose of filing, and to be able to use data from specified entities to verify information on ACRA’s register.
In a bid to facilitate government-to-business digital communications and in line with Singapore’s move towards greater digitalization, ACRA is also proposing amendments that seek to:
- introduce legislative provisions to require position holders and shareholders to provide and update email addresses and mobile numbers, and business entities to provide and update their business email addresses; and
- allow ACRA’s correspondences and notices (other than summons), to be delivered to and accessed by individuals and businesses via a virtual mailbox.
Proposals Relating to the Enhancement of Transparency of Beneficial Ownership of Companies and LLPs
To improve the transparency of beneficial ownership of companies and LLPs and reduce opportunities for the misuse of corporate entities for illicit purposes, ACRA is proposing legislative amendments that will:
- remove the exemption of certain local companies from the requirement to maintain registers of nominee directors;
- require companies and LLPs to verify the accuracy of information in their register of controllers with their controllers annually;
- introduce a financial penalty of up to $10,000 on any person who inadvertently, or without intent to mislead or defraud, makes any inaccurate or erroneous statement or information on beneficial ownership to ACRA under the Companies Act and Limited Liability Partnerships Act;
- increase the maximum fine for offences pertaining to the registers of controllers and nominee directors from $5,000 to $20,000;
- require local and foreign companies that are exempted from maintaining registers of controllers to declare the category of exemption during their annual filing;
- require companies and LLPs to provide the email addresses and telephone contact numbers of their controllers and nominators of nominee directors in the registers of controllers and nominee directors; and
- extend the prescribed time for companies and LLPs to update their register of controllers from two business days to seven calendar days.
Other Proposed Amendments to the Companies Act and Other Legislation
ACRA is also proposing amendments to the Companies Act and other ACRA-administered legislation to clarify and update regulatory requirements, such as to:
- standardise and consolidate the service of summons and other civil originating processes under the legislation;
- streamline and clarify the striking off regime for companies, foreign companies, variable capital companies, and LLPs; and
- make it clear that ACRA may update the register of directors based on bankruptcy information provided by the Ministry of Law.
The public consultation documents can be accessed on ACRA’s website and the REACH consultation portal. Members of the public can submit their comments via email to ACRA_Public_Consultation@acra.gov.sg by indicating “Public Consultation on Companies Act and other Acts” in the subject line. ACRA will publish a summary of the comments received. The summary will not disclose the identity of the respondents or separately address or acknowledge every comment received.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers, who are directors of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan, Lewis & Bockius LLP:
Wai Ming Yap