FAQs on Company Directors

A Director is an individual, who must be at least 18 years of age, who is elected by the shareholders to manage the affairs of the Company.

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 director is an officer of the company. All directors must carry out their duties and responsibilities in accordance with the law and the objectives of the business.

Singapore company act requires a minimum of one director who must be a Singapore resident.

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.

Singapore Companies Act requires that at least one of the company directors must be ordinarily resident in Singapore i.e. Singapore citizen, Singapore Permanent Resident, Employment Pass, EntrePass or Dependent Pass holder. We can provide Nominee Director Service to meet this statutory requirement, if you do not have a local resident director.

Directors have a fiduciary duty to their company whereby they must be loyal to the company and must act honestly and in good faith when exercising their powers.

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.

Changes in certain statutory information (e.g. notification of a change of registered office address, appointment or resignation of directors, secretaries, or auditors, allotment of shares) must be lodged with the ACRA on the prescribed forms within specified time limits as stipulated by the Companies 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 directors and managers of every company are required to keep proper accounting records to sufficiently explain the transactions and financial position of the company. The records usually contain entries of all receipts and payments, details of sales and purchases of goods, record of the company’s assets and liabilities and a record of annual stocktaking if the company deals in goods. The directors must prepare a profit and loss accounts and balance sheet together with notes to the accounts giving a true and fair view of the state of affairs of the company at the end of the financial year.

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.

The directors’ are required to file the company’s annual tax filing, GST filing (if necessary) on timely basis.

Yes the directors are held responsible for the company’s CPF contribution.

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).