The Singapore Companies Act was enacted in 1967. It applies to all companies incorporated in Singapore, and contains provisions relating to the life-cycle of companies, from incorporation to management to winding up.
HIGHLIGHTS OF RECENT AMENDMENTS Taking Effect from 30 January 2006
The removal of the concept of par value and authorised capital.
Reforms in the capital maintenance regime by introducing capital reduction procedures without the need to go to court for approval.
Introduction of treasury shares which allow companies to merge into one of the companies or form a new company.
Amendments Taking Effect from 1 April 2004
Raising of Capital of Private Companies
Company Legislation and Regulatory Framework Committee (CLFRC) recommended the deletion of Sections 18(1)(c) and (18)(1)(d) of the Companies Act. This will allow private companies to raise capital through private and exempted offerings without the need to convert to public companies. However, companies will still have to comply with Securities and Futures Act for offerings made to the public.
Company Registration Numbers
All companies are required to include their Singapore Company registration number on all business letters, statements of account, invoices, official notes and publications.
One Director/Shareholder Companies
All companies can be incorporated by any one person and continue to exist by one person. There is a legal requirement that the sole director must be a local resident of Singapore. For such companies, the director and the company secretary cannot be the same person. If there is no director left to manage a company, the shareholders will be liable for the debts incurred by the company at any time six months after the office of director becomes vacant.
Display of Company Name
The statutory requirement for every company to display its name outside its office will be removed. Since it is easy to locate a company by referring to its registered address, there is no compelling reason to impose a mandatory requirement that all companies must display a signboard, which only adds to business costs. This also facilitates the setting up of home-based businesses under the new Home Office Scheme.
All companies are required to prepare their financial statements in accordance with the prescribed accounting standards. The non-compliance fine will be increased to S$ 100000 and the offender may also be imprisoned for up to 3 years if the offence is committed with intent to defraud.
Merger of Registry of Companies and Businesses with the Public Accountants Board
The Registry of Companies and Business is merged with the Public Accountants Board to form a new statutory board.
Amendments Taking Effect from 15 March 2003
Exemption from Audit
- Dormant Companies and exempt private companies with revenues not exceeding S$2.5 million would be exempted from the audit requirement. Annual Returns are still required to be filed with the Registry of Companies and Businesses.
- However, any member or members holding in the aggregate not less than 5% in nominal value of a company’s issued share capital or any class of it or, if the company does not have a share capital, not less than 5% in number of the members of the company may request for an audit of the company accounts.
- A private company is no longer required to appoint a professionally qualified company secretary. However the company directors are required to take all reasonable steps to ensure that each company secretary as appointed by them has the requisite knowledge and experience to discharge his/her functions as a company secretary.
- However, the Registrar may require a private company to appoint a professionally qualified company secretary if he is satisfied that the company has failed to comply with any provision of the Companies Act with respect to keeping of any register or other records.
Annual Returns Filing for Exempt Private Companies
- Exempt private companies, which are exempted from audit, can file their declaration of solvency, signed by their director and company secretary.
- Exempt private companies, which are not exempted from statutory audit, will require the declaration of solvency to be signed by the director, company secretary and the auditor.
Amendments Taking Effect from 15 August 2002
The Companies Act was amended for two main purposes
- It makes the filing of documents with the Registrar of Companies and the issue of documents by him medium neutral, in order to facilitate the use of the electronic filing system known as Bizfile.
- It gives effect to the recommendations of the Disclosure and Accounting Standards Committee that was set up by the Government to review the regulation of accounting standards in Singapore.