Understanding Form 45

Summary: A paperwork you need to sign before becoming a company director.

Form 45 is a paperwork one must sign before accepting a directorship role. Its formal title clarifies its purpose: ‘Statement of Non-Disqualification to Act as Director and Consent to Act as Director.’ It essentially acts as a declaration from the potential director, ensuring they fulfil certain requirements and don’t fall foul of any disqualifying conditions. Let’s delve into these requirements a bit deeper.

 

Being of Legal Age and Capacity

The legal minimum age for a company director is 18 years. At the same time, the potential director must be fully capable, which means they should be able to understand the significance of their responsibilities and the implications of their actions. This rule applies to all directors, including nominee directors.

Disqualification Orders

A court can prohibit an individual from becoming a director, even an aspiring one, by issuing a disqualification order. The parameters for disqualification are laid out in the Company Directors Disqualification Act of 1986.

For instance, if you haven’t had any disqualification orders declared against you under Section 149(1) of the Companies Act, within three years of this statement’s date, as specified in Form 45, you’re still eligible to be a director.

Disqualification orders are typically issued due to professional misconduct or breaches of the Companies Act. The complete list of potential offences is accessible in the full text of the Companies Act and in the complete disqualification criteria provided in Form 45.

 

Consideration of Prior Convictions

The law disallows anyone convicted of a fraud or dishonesty offence, which carries the possibility of imprisonment for three months or longer, from becoming a director. Form 45 alludes to this during the five years preceding its signing, whether the conviction took place in Singapore or abroad.

These offences may range from obvious crimes such as fraud or embezzlement to judgement-based rulings like failing to be honest or responsible as a director, or mishandling a company’s legal books.

 

Eligibility for the Role of a Nominee Director

Any Singaporean citizen or permanent resident, provided they are of legal age and standing, can be chosen as a nominee director. Prospective candidates are primarily assessed by what could disqualify them from taking on this role.

While this may seem restrictive, it opens up a wide array of choices for picking the most suitable nominee director. Ideally, they should be reliable and trustworthy with professional experience in a corporate scenario. Moreover, they must be committed to maintaining the company’s legal standing.

The disqualification conditions only strike off candidates with a record of unwise decisions or unacceptable behaviour. Both the Companies Act and Form 45 are there to protect your company and the markets you operate in, endorsed by a responsible directorship.