The following persons are prohibited from acting as a director:
- a person who has been convicted for fraud or dishonesty punishable on conviction with imprisonment for 3 months
- an undischarged bankrupt
- a person who is disqualified by the High Court of Singapore
A foreigner who wants to register a new company in Singapore and act as a resident director of the company must obtain a work pass before he can act as the local resident director.
The directors duties, responsibilities and liabilities specified in the Act as well as under the common law where applicable, include the following key administrative and substantive duties, that is, to:
- discharge their responsibilities in the company;
- ensure that they have a reasonable degree of skill and knowledge to handle the affairs of the company;
- act honestly and be reasonably diligent in discharging their duties and act in the interest of the company without putting themselves in a position of conflict of interest.
- employ the powers and assets that they are entrusted with for the proper purposes of the company and not for any collateral purpose;
- to comply with all the requirements and obligations under the Act including those in respect of meetings, requisitions, resolutions, accounts, reports, statements, records and other documents on the company, filing and notices and any other prerequisites; and
- account to the shareholders for their conduct of affairs of the company and make such disclosures that are incumbent upon them under the Act.
In addition, an annual return must be filed with the ACRA together with a copy of the audited accounts of the company within one month from the date of the annual general meeting of the company unless it is an exempt private company (a private company whereby its shares are not held directly or indirectly by any corporation and which has not more than twenty members). An exempt private company has to file an exempt private company certificate which states that the company is in a position to meet its liabilities as and when they fall due and that a set of audited accounts has been laid before the company at the annual general meeting.
The director’s report attached to the accounts must be approved by the board and signed by two directors. The accounting records must be kept at the company’s registered office or at such other place as the directors think fit. The Companies Act requires the accounting records to be kept for seven years.
Directors are required to hold the first Board Meeting after the company is incorporated to approve the appointment of the officers of the company and other related matters.
The directors should ensure that there are regular meetings to review the company’s financial and trading position properly. The frequency of the meetings depends upon the nature and scale of the company’s operation.
Usually a company has at least one meeting in a year which is known as the annual general meeting (AGM). The directors must ensure that the first AGM is held within 18 months of the incorporation of the company and, following that, in every calendar year at not more than 15 months interval. The Companies Act also requires that all AGMs must be held within six months from the financial year end of the company.
The directors themselves or on the requisition of members may convene any shareholders’ meeting to vote on certain issues that require the agreement by the members. These are generally known as extraordinary general meetings (EGM).