2006 Singapore Companies Act
The Singapore Companies Act came into force in 1967. All the Singapore incorporated companies need to comply under its rules and it has all the provisions related to all aspects of a company, from incorporation to how to run to shutting down.
MAIN POINTS OF LATEST AMENDMENTS EFFECTIVE 30 JANUARY 2006
- Elimination of the following of authorized capital and par value concepts.
- Reforms related to capital maintenance through the launching of new capital reducing processes without having to get approval from the court.
- Introducing treasury shares that enable merger into any one of the existing companies or forming a new one.
AMENDMENTS EFFECTIVE APRIL 2004
Raising Private Companies’ Capital
The Company Legislation & Regulatory Framework Committee suggested deleting Section 18 (1) & 18 (1) (d) in the Singapore Companies Act. Private companies will then be able to raise capital via private and exempt offerings without the requirement of converting to public companies. At the same time, companies will continue to comply with the Securities & Futures Act for making any public offerings.
Company Registration Numbers
Every company must carry their Registration Number on their invoice, statements of account, business letters, publications and official notes.
Single Director or Shareholder Company
A Singapore company can be incorporated by a single individual and managed by a single person. However, such a sole director should be a local Singapore resident. In such a case, the director cannot be the company secretary. In case, a company doesn’t have a director to manage its operations, the debts (if any) will become the liability of the shareholders after 6 months of the director’s office becoming vacant.
Company Name Display
It will no longer be mandatory for a company to display the name outside the office. Because a company can be located via its registered address, it is not essential to make it compulsory for a company to spend additionally on displaying signboard(s). This will also benefit those seeking to incorporate home-based companies under the latest Home Office Scheme.
Penalties for Failing to Comply
Every Singapore company must prepare its financial statements according to the laid-down accounting standards. Failing to comply will attract a fine of SGD 100,000 and an additional provision of imprisonment for up to three years if an intent of cheating is established.
Merging Registry of Companies & Businesses and the Public Accountants Board
There is a major merger at the authority level between the Registry of Companies & Business and the Public Accountants Board. This will create a new statutory board.
AMENDMENTS EFFECTIVE 15 MARCH 2003
Exemption from auditing will be provided to companies which are exempt or inactive and have revenues up to SGD 2.5 million. However, it is still necessary to file Annual Returns with the Registry of Companies & Businesses.
Auditing can however be requested in the following case by shareholders or members:
- If the company has issued share capital, member(s) holding 5% or more of the share capital in nominal value can request for audit of the accounts;
- If the company doesn’t have any share capital, 5% or more of the number of its members can request for an audit.
Related to Company Secretary
It is not essential for a private company to appoint a professionally certified company secretary. But the director (s) should ensure that the company secretary appointed has all the required experience and knowledge for the able discharge of functions.
The Registrar however has the power to ask a private Singapore company to appoint only a certified and professional company secretary. The Registrar may do so if he/she finds that the company fails to meet certain provisions under the Companies Act with regard to maintaining certain records.
Exempt Companies and their Annual Returns
- Private companies exempted from auditing have the option to file declaration of solvency, signed to by the director(s) and company secretary.
- Exempted private companies without exemption from audit will have to file declaration of solvency signed to by the director(s), company secretary and auditor.
- This brings convenience in the process of documents filing with the Registrar of Companies and the issue of documents. It facilitates the use of Bizfile, an innovative electronic filing program.
- It brings to effect the suggestions made by the Disclosure & Accounting Standards Committee organized by the Singapore Government for reviewing the regulation of accounting standards in the country.