Singapore’s Ministry of Finance (MOF) and Accounting and Corporate Regulatory Authority (ACRA) have invited public feedback on amendments to the Singapore Companies Act aimed at reducing regulatory burden and improving corporate transparency, with comments due by 13 January 2017.
Reducing Regulatory Burden
MOF and ACRA have proposed to simplify the requirement for companies to hold annual general meetings (AGMs) and to file annual returns (ARs) as follows:
- Aligning the timelines for holding AGMs and filing ARs with the financial year end (FYE), i.e., listed companies and non-listed companies should hold their AGMs no later than the last day of the fourth month or sixth month after FYE, respectively.
- Exempting all private companies from holding AGMs, subject to specified safeguards.
- Removing the legal requirement for companies and limited liability partnerships (LLPs) to use common seals. Companies and LLPs can choose to retain the use of common seals based on business needs.
Improving Transparency of Companies and Limited Liability Partnerships
To make the ownership and control of business entities more transparent, MOF and ACRA propose to require companies and LLPs to obtain and maintain beneficial ownership information and to make such information available to law enforcement authorities upon request. This will boost Singapore’s ongoing efforts to maintain Singapore’s high corporate governance standards and strong reputation as a trusted and “clean” financial hub. It is also in line with international standards for combating money laundering, terrorism financing, and other related threats to the integrity of the international financial system.
The proposed legislative changes include the following:
- Requiring companies (except listed companies and Singapore financial institutions) and LLPs incorporated/registered in Singapore to maintain registers of beneficial owners (referred to as controllers) at prescribed places (e.g., the company’s registered office or the registered filing agent’s registered office).
- Requiring foreign companies registered in Singapore to maintain registers of beneficial owners (controllers) and public registers of shareholders.
- Requiring a liquidator to retain records of wound up companies and LLPs for five instead of two years.
- Removing the options currently available to companies and LLPs to destroy records early if they are wound up by their members, partners, or creditors.
- Requiring officers/partners/managers of struck-off companies and LLPs to retain accounting records and registers of beneficial owners (controllers) for five years.
- Voiding the issuance and transfer of bearer shares and share warrants by foreign companies registered in Singapore.
- Requiring nominee directors/managers to disclose their nominee status and their nominators to their companies/LLPs.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the author, Suet-Fern Lee, a director of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan Lewis & Bockius LLP.