Companies Act Amended to Enhance Transparency in Singapore
The Companies Act was amended in Singapore with the aim to ensure that corporate regulatory regimes continue to remain robust. The changes were also done with the aim to support Singapore’s growth as a global hub for businesses and investors.
To continue to grow and move forward better and stronger than ever, sometimes change must be done and in this case, the Companies Act was amended to enhance Singapore’s corporate rescue and restructuring process.
What are some of the changes that are taking place?
Some of the changes that will be seen in the new amended act include:
- Locally incorporated companies will now be required to maintain and register their nominee directors.
- ACRA has removed the legal requirement for companies and limited liability partnerships (LLPs) to use common seals.
- Align the timelines for holding AGMs and filing annual returns with the Financial year end (FYE) for listed and non-listed companies;
- Exemption is given to all private companies from holding AGMs subject to specified safeguards.
- The beneficial ownership of business entities will be more transparent.
- The opportunities for misuse of the corporate entities for illicit purposes will now be significantly reduced.
- Beneficial owners and controllers of businesses will now be required to provide information on the particulars of the company, as well as keep them continually up to date.
- Foreign companies who are registered in Singapore will be required to maintain public registers of their members.
- The liquidator of a wound-up company will now have to retain the company’s records for at least five years instead of the current two years.
- The new changes will enable the High Court to issue a judicial management order when the company is likely to be unable to pay its debts.
How will these changes help?
When a change happens, especially for something as important as the Companies Act, it is usually a change that has been well thought out and meant to bring benefit. The changes are meant to strengthen and enhance the systems that are already in place, improving them for the better.
The changes to the Companies Act will, moving forward, bring benefit in the following ways:
- It will help Singapore enhance the accessibility of information on beneficial ownership of legal persons to law enforcement agencies.
- It will enable Singapore to better implement international standards on tax transparency.
- It will help boost Singapore’s ongoing efforts to maintain its strong reputation as a trusted and clean financial hub.
- The changes will help strengthen the scheme of arrangement and judicial management regimes.
- The changes will also enhance Singapore’s capability in dealing with cross-border insolvencies.
Overall, the changes that will be taking effect in the new amended Companies Act will, in the long term, serve to strengthen Singapore’s already thriving business environment.