What Happens When a Company Director Resigns in Singapore? What Should We Do?

What Happens When a Company Director Resigns in Singapore? When the director of a company in Singapore resigns, there are several matters which must be attended to. This includes notifying ACRA of the resignation and following the correct procedures.

 

Why Would a Company Director Resign?

This could be due to several reasons, among which include:

  • Poor health
  • Disqualified
  • Change in management which might result in conflicting interests among the directors

A director’s resignation in Singapore is considered valid if:

  • The director resigns in accordance with the proper procedure stipulated in the constitution of the company
  • There is a minimum of one director who resides in Singapore that is left.

A director may resign by giving their notice in writing. The written notice must be delivered via registered mail to the company’s registered address.

 

What Happens When the Director of a Company Resigns?

Upon resignation, the company must evaluate the implications of its constitution. The impact of business operations must also be considered, along with the following:

  • The ordinarily resident director must be replaced by another ordinarily resident director.
  • If the director was also the Company Secretary, then the company must appoint another (the post cannot be left vacant for more than 6 months).
  • If the director was a shareholder, the shares must be transferred to the remaining shareholders.
  • Whether the director should be on leave when servicing their notice period or remain in their post.
  • Whether the shareholders, investors, employers, suppliers and customers should be notified of the resignation.
  • Whether the resignation affects the company’s authorised signatory. If yes, this must be amended and all parties concerned notified.

 

Who Must Be Notified of The Resignation?

When a company director in Singapore resigns, the Accounting and Corporate Regulatory Authority (ACRA), who is the Registrar of Companies in Singapore, must be notified. ACRA must be informed within 14 days from the date the director resigned.

ACRA will proceed with the necessary amendments in the statutory public records to reflect this change. The provisions which stipulate what must be done in the event a director of a company resigns in Singapore is not definitively outlined in the Companies Act.

As per the Singapore Companies Act, all companies in Singapore must have at least one director. However, the rules in relation to the resignation of the director are not clear. In general, as per the Articles of Association, a director’s resignation is considered effective once they submit their notice in writing.

If the director of a company in Singapore wants to resign, the company cannot stop it. The disapproval of other directors regarding the resignation is not considered valid grounds and thus cannot prevent the director from leaving. The exception to the rule would be if there is a precedent condition which warrants the validity of the resignation, which is in the memorandum, articles of association or in an existing contract between the company and the director who is about to resign.

 

Notifying ACRA

Per the Companies Act, the company must lodge a notification with ACRA once the director has officially resigned. ACRA can be notified online through BizFile. Upon logging in, you will need to select the “Change in Company Information including Appointment/Cessation of Company Officers/Auditors” link (applicable to local companies).

Occasionally, ACRA may contact the resigning director to verify the resignation. If a detailed investigation is needed, the notification outcome may be delayed. The director can opt to notify ACRA of their resignation, but only after ensuring that the company has been given proper notice. The director must also have valid reasons to believe that the company is not going to notify ACRA themselves.

What Happens When a Company Director Resigns in Singapore?

What Happens If ACRA Is Not Notified?

Failure to notify ACRA accordingly of the resignation could result in a non-disclosure offence, upon which the following may be imposed:

  • Up to S$5,000 fine.
  • If the offence endures after the conviction, liability for a default penalty may apply.

Cessation will only be effective once an official notification has been lodge. The director will continue remaining a director until ACRA’s records have been notified. Until then, the director will continue to bear the responsibilities of the company as per usual.