Significant changes to the commercial and company law in Singapore have come into effect. The changes to the Singapore Companies Act will hopefully make business entities more transparent as well as mitigating the risks of money laundering and terrorist financing.
Here is a run-down of the key changes that will affect both locally incorporated companies and foreign companies registered in Singapore:
FOREIGN CORPORATE ENTITIES
- A re-domiciliation initiative will be introduced.
- Foreign companies are now able to transfer their registration to Singapore, alongside the current option to incorporate a subsidiary company or branch.
BENEFICIAL OWNER & NOMINEE DIRECTOR REPORTING
- Going forward, companies must maintain public registers of both Controllers (a Business Owner that has a 25% or more Shareholding in the company) and Shareholders at prescribed places. Therefore Beneficial Owners or Controllers must provide and update their personal information to the company accordingly.
- Maintain a register of all Nominee Directors associated with the company.
- Take reasonable steps to identify and attain information on their Controllers, including sending notices to potential Controllers. (Existing companies will have a transitional period of 60 days from March 31st to update their registers of Controllers).
- The liquidator of a wound-up company will have to keep the company’s records for a minimum of five years; currently it is only required for two years.
- A company wound up by its Shareholders or Creditors will also have to retain its records for a minimum of five years.
- The former officers of a company that has been dissolved will have to keep all documentation of the company for at least five years, including all registers and accounting records.
ANNUAL GENERAL MEETINGS
- The timelines for holding AGMs (Annual General Meetings) and filing annual returns will be aligned with the companies’ fiscal year-end.
- Listed companies should hold AGMs within four months and file annual returns within five months after their fiscal year-end.
- Non-listed companies must hold AGMs within six months and file annual returns within seven months after their fiscal year-end.
- Private companies will be exempt from having to hold AGMs, subject to necessary safeguards.
These amendments will fortify the scheme of arrangement and the current judicial management systems and is hoped to improve Singapore’s ability to deal with rescue and restructuring processes that will include dealing with overseas insolvencies.
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