An Overview on a Singapore Company Local Resident Director’s Responsibility
A Singapore company local resident director has a major role to play, and they are largely responsible for the overall success that is achieved by the company. As such, the responsibilities of a Singapore company director should not be taken lightly. Apart from the obligation to supervise the overall progress of the business, the company director is also tasked with utilising practical diligence when carrying out their duties.
It is also the duty of the Singapore company resident director to always act in the best interest of the company and prevent any conflict of interest. As the director, they must use their responsibilities and powers wisely. If you are not physically present in Singapore to run your business, the director you choose is important.
What Do You Need to Consider Before Appointing a Singapore Company Director?
In Singapore, company directors are elected by the shareholders. When choosing the right Singapore company director, you must ensure that this individual is trustworthy enough to comply with all the necessary requirements.
Among the requirements that must be considered when selecting your Singapore company local resident director include:
- He/she must meet the minimum 18-years age requirement.
- He/she must be of sound mind at the time of appointment.
- They must be a natural person. A business entity or company cannot serve as director.
- They must be a resident in Singapore (citizen, Permanent Resident or Employment Pass/Dependent Pass holder).
Your chosen candidate cannot serve as director if:
- They have an undischarged bankruptcy charge.
- They have previously been declared an unfit director of another company.
- They served as director of a company that was wound up due to national security or interest.
- They have previously been convicted in Singapore (or abroad) of offences relating to dishonesty and fraud in which the punishment is 3-months imprisonment or more.
- They have previously been convicted of offences relating to the management or formation of a corporation in Singapore.
- They have been declared guilty of 3 offences (or more) within a 5-year period relating to the requirements outlined in the Singapore Companies Act.
Duties and Responsibilities of a Singapore Company Director
Per the law, a Singapore company director duties are endorsed by statutes. The duties are also derived based on common law. Any breach in the statutory duties will result in a criminal prosecution and be implemented by the Singapore Police Force, Commercial Affairs Department (CAD) or the Accounting and Corporate Regulatory Authority (ACRA). A breach in common law duties will result in civil liabilities and enforced by an individual or company.
Companies can sue the Singapore company director in the event of a breach. Any director who is found guilty of dishonesty, misusing information and failing to use equitable diligence can be convicted and imposed with a fine not exceeding $5,000 or a prison term of no more than 1-year.
If a director wants to disqualify themselves (or if they are disqualified), they must give notice in writing to the company. The company will then need to report this to ACRA within a month.
Key duties of a company director include complying with:
- Disclosure requirements (Singapore Companies Act)
- Reporting requirements (Singapore Companies Act)
- Obligations in financial reporting (Singapore Companies Act)
- Maintain the company’s financial statements
- Provide other members of the company with a copy of the financial statements
- Reporting the state of the company’s affairs
Key statutory duties of a Singapore company director are defined in the Singapore Companies Act. This includes sections:
Key duties of a Singapore company director as per common law includes:
- Always acting in the company’s best interests and in good faith.
- Act with skill and care when undertaking their company responsibilities.
- Prevent personal conflict of interest between themselves and that of the company.
- Use their company director’s powers appropriately.
What Happens When a Singapore Company Local Resident Director Resigns?
Unless there is another local resident director in the company, a Singapore company director cannot resign or vacate their post. A resignation is considered a breach of the provisions made in any agreement with the company, or the company’s memorandum or articles of association. As such, the resignation will be considered invalid.