The Singapore Parliament recently passed the Corporate Registers (Miscellaneous Amendments) Act, which seeks to amend the Companies Act 1967 and the Limited Liability Partnerships Act 2005 to strengthen Singapore’s corporate governance regime and improve the transparency and beneficial ownership of companies and limited liability partnerships.
The amendments align Singapore’s corporate governance requirements closer with international standards set by the Financial Action Task Force (FATF) to make it more difficult for illicit actors to engage in money laundering, terrorism financing, and other actions that abuse the system.
The Corporate Registers (Miscellaneous Amendments) Act (Act), which passed on 10 January, has yet to come into force. It will do so on such date that the Minister of Finance appoints by notification in the Gazette.
The salient changes proposed by the Act are as follows.
The Companies Act 1967 (CA) and Limited Liability Partnerships Act 2005 currently require companies and limited liability partnerships (LLPs) to maintain a register of registrable controllers. However, there is no express requirement to record this in the event the company or the LLP is not able to or does not identify such registrable controller.
Pursuant to the Act, the company or LLP must identify the individuals with executive control of the entity and record them as registrable controller of the entity.
An “individual with executive control” means:
The changes are intended to enhance the transparency of beneficial ownership and control of companies and LLPs in Singapore. This aligns Singapore’s requirement relating to identification of registrable controllers for companies and LLPs with international expectations.
Prior to the Act coming into force, while a shareholder may hold shares on behalf of another person (i.e., a nominator), the nominator is not required to be identified, as the nominator is not the shareholder on record.
Pursuant to the Act, both local and foreign companies in Singapore are required to (1) keep a non-public register of nominee shareholders and their nominators, and (2) update their register within seven days of being informed of any change by the nominee.
The changes align Singapore’s requirements relating to identification of controllers of a company with international standards. Nominee shareholders are also obliged to inform the company of their nominee status and their nominators within 30 days of any change.
3. Stipulated Time Frame for Local Companies to Update the Register of Nominee Directors
Prior to the Act, no time frame was stipulated in the CA as to when the local company should record changes to information in the register of nominee directors.
Under the Act, a local company must update its register of nominee directors within seven days after the local company is informed:
The CA currently does not prescribe a timeline to update the register of members for foreign companies when there is a change in particulars.
Pursuant to the Act, a foreign company must update its register of members within 30 days after any change in the particulars contained in the register.
The longer time frame provides foreign companies with ample time to contact their members who may be based overseas to update the register of members.
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 solicitors of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan, Lewis & Bockius LLP:
Singapore
Wai Ming Yap