On 2 May 2013, the Accounting and Corporate Regulatory Authority (ACRA) and the Ministry of Finance (MOF) released the first draft of the proposed Singapore Companies (Amendment) Bill 2013; a groundbreaking law to strengthen Singapore`s corporate regulatory framework modelled on the UK, Australia and Hong Kong. Reviewing the recommendations of the Companies Act Steering Committee, the second round of public consultation has ended on 14 June 2013.
The amended legislation is designed to reduce regulatory burden, ease compliance, provide greater flexibility and encourage better corporate governance to enhance Singapore’s growth as a global hub for businesses and investors. Various stakeholder groups are expected to benefit from the changes, such as companies, SMEs, retail investors and company shareholders. These changes are intended to be implemented in 2014.
Some of the recommendations are as follows:
- Introduction of small company criteria for exemption from statutory audit
A Company is a small company if:
- it is a private company throughout the financial year
- it satisfies any 2 of the following criteria for each of the 2 financial years immediately preceding the financial year
– the revenue of the company for a financial year does not exceed $10 million
– the value of the company’s gross assets at the end of a financial year does not exceed $10 million
– it has at the end of a financial year not more than 50 employees
A group of entities is a small group if the group of entities satisfies any 2 of the following criteria for each of the 2 financial years immediately preceding the financial year:
- the consolidated revenue of the group of entities for a financial year does not exceed $10 million
- the value of the consolidated gross assets of the group of entities at the end of a financial year does not exceed $10 million
- the group of entities has at the end of a financial year not more than an aggregate of 50 employees
- Requirement for auditor of a public interest company or its subsidiary to seek ACRA’s consent for premature resignation
- Introduction of procedures for revision of defective accounts
- ACRA registers being the definitive register of members for private companies and definitive registers of directors, secretaries, CEOs and auditors
This recommendation will dispense with the need for companies to maintain a Register of Members and allow the public to rely on the ACRA register. Companies will continue to be required to notify ACRA of any changes to the Register of Members. Companies will still be required to maintain a register of director’s shareholdings.
- Merger of memorandum and articles of companies into a single constitution document
The Memorandum and Articles of Association will be merged and renamed the “Constitution”. Existing companies will not be required to incur any costs in merging the documents to form the new Constitution.
- Introduction of alternate address policy for directors, CEOs and secretaries in the respective registers required to be kept with the Registrar
- Issues relating to striking off of companies
- 3-month notification period under S344(2) of the Companies Act reduced to 2 months
- ACRA to send striking off notice by post to IRAS and CPF Board and by registered post to directors, secretary, members of the Company
- The current 15-year period is reduced to 6 years for application to the Registrar to restore to the register a company whose name has been struck off
- Registrar may restore company deregistered by mistake
- Threshold for rights to demand a poll lowered from 10% of total voting rights to 5%
- Increase cut-off time for filing of proxies from 48 hours to 72 hours prior to the shareholders’ meeting
- Introduction of multiproxies to enable a member who is a relevant intermediary (e.g. CPF Board) to participate at shareholders meetings
- Removal of the one-share-one-vote restriction on public companies
For the complete set of Amendment Bill, please refer to the ACRA website at www.acra.gov.sg.