Companies Act in Singapore Gets Better at Every Amendment
Among the nations in the business world, Singapore is known for its ease of doing business. According to the Ease of Doing Business Index, Singapore is a favourite spot to set up a company there. Part of its success is from the Singapore Companies Act that has improved in line with international business practices and rational revisions to ensure companies can carry out businesses effortlessly.
From the Start
Entrepreneurs need not worry about setting up a company in Singapore. As Singapore tops the Ease of Doing Business Index chart, setting up a company in the nation takes a little understanding right from the start. This ensures businesses have the right to understand the whole process, including provisions in the Singapore Companies Act. Nevertheless, other statutes provide specific companies such as Insurance Act, Banking Act, Limited Liability Partnership Act and Securities and Futures Act. Right from the start, Singapore wants you to enjoy doing business here. According to the Act, a business organisation with above twenty members must incorporate as a company. However, specific professional services, such as a legal firm or accountancy, are not subject to this statement of the Act.
Registering a company in Singapore is a straightforward process. Any individual may register a company after paying up the necessary fee and submitting the company constitution. In other countries, a company constitution is similar to the memorandum of articles or articles of association. The individual may also need to fulfil the requirements by the Registrar to register a company. After that, the Registrar will issue the notice of incorporation together with the company’s type, its liability and date of incorporation.
A Separate Entity
Members or shareholders of the company will be identified differently. The company will have its legal rights and can survive indefinitely until it winds up. When the company incurs debts, its members will not be sharing such liabilities, unless it is an unlimited company. Having said this, there will be specific situations where the company and its members will be treated as one. Such treatment is only applicable in court by the statute and in the common law.
Governing a Company
According to the Act, the company’s business should be managed by the directors of the company. The company owners are usually not directors. The company hires directors to manage and oversee its operations. Nevertheless, for some companies, the directors are non-executive, and the company’s daily management falls onto senior executives of the company.
Amendments for the Better
The Companies Act has had several amendments to provide for ease of doing business. Some of the amendments are:
- Introducing capital reduction procedures without needing to go to court.
- Establishing treasury shares to allow companies to merge and form a new company
- Allowing private companies to raise capital without going public.
- All companies must display their registration number on all business letter, account statements, official notes, invoices and publication for easy identification.
- Companies can continue to exist as one director or shareholder company, with the director being a local Singapore resident.
- Companies no longer need to display their company name outside their premises.
- Non-complying companies can face up to S$100,000 fine and a jail term of up to three years.
- Small companies may be exempted from audit but still, need to file Annual Returns.
- A private company no longer needs to hire a company secretary unless the company fails to keep its records.