C TABLE OF PROPOSED CHANGES IN PART 2 OF THE DRAFT COMPANIES (AMENDMENT) BILL Clause Current provision in Companies Act Proposed Amendments Reasons/ Consultation Questions Delegation of power to consider and decide on appeals to the Minister of State (Finance) 2 The Companies Act (CA) gives the Minister the power to consider and decide on appeals against the Registrar’s decision under the following sections: Power to refuse registration: section 20(3) of companies: section 27(5) and (5A) Change of name: section 28(3D) and (3E) Power to refuse registration of a foreign company in certain circumstances: section 369(2) Cesser of business in Singapore: section 377(9). Amend the CA to enable the Minister to delegate the power to consider and decide on appeals to the Minister of State (Finance) if he wishes to. (Note: The delegation power will also be applicable to the new section 29(8A) introduced in Clause 10 below.) Provide flexibility for the Minister to delegate the to decide on appeals. Interests in shares 3 & 61 Section 7(4A) provides that where a body corporate has or is deemed to have an interest in a share, a person who with his associates is entitled to exercise or control the exercise of not less than 20% of the votes attached to the voting shares in the body corporate is deemed to have an interest in that share. Section 7(5) defines a person C as an associate of B if: Narrow the scope of the deemed interest provision by excluding holding company and fellow subsidiaries from the definition of associates under section 7(5) i.e. amend section 7(5)(a) to refer only to subsidiary and repeal section 7(5)(b) and (e). In short, after the amendment, section 7(5) will define a person C as an associate of B if C is a For consistency with the manner in which corporate control is exercised.
cannot register using a name that is reserved under the CA. Section 27(14) only protects a reserved name under the CA and does not include names reserved under other Acts administered by ACRA. cannot be registered using a name that is reserved by a foreign company or under the Business Registration Act, Limited Liability Partnerships Act or Limited Partnerships Act, not just the CA. name which is the same as a name which is reserved by another entity registered under another Act administered by ACRA and to align with similar provisions in the other Acts administered by ACRA. Change of names of companies 9 Section 28 provides that the Registrar can direct a company to change its name if: it is a name by which the company could not be registered without contravention of section 27(1); or its name resembles that of another company, corporation or business. Amend section 28(3) and introduce section 28(3AA) to exclude section 27(1)(c) from the grounds for direction of a change of name. Related to the new section 27(1)(c). The power to direct a change of name will not be extended to a name identical to a reserved name. Amend section 28(3)(b) to include reference to “limited liability partnerships” and “limited partnerships”. Technical amendment to include the prohibition of the change of a name to one which resembles to that of a limited partnership or a limited liability partnership. Section 28(3C) provides that the Registrar may require a company to pay fees if he is satisfied that the company to which a direction to change name was given had applied for the registration under that name in bad faith. Replace the reference to “fees” with “penalty” in section 28(3C). Technical amendment for clarity. Omission of “Limited” or “Berhad” in name of charitable and other companies
shares from the computation of the paid-up capital. appropriate proportion of voting rights. Filing of section 175A resolutions section 186(1) 30 A private company may, by resolution, dispense with the holding of AGM under section 175A. The resolution must be approved all members and is a unanimous decision. Section 186(1) requires a company to lodge a copy of every special resolution with the Registrar within one month after the passing of the resolution. Amend section 186(1) to expressly require section 175A resolutions be lodged with the Registrar. For clarity. Timeline for filing of annual return for companies which have dispensed with AGM 31 Section 197(4) requires a company to file its annual return with the Registrar within one month (or in the case of a company which keeps a branch register outside Singapore, within 2 months) of its AGM. For companies that have dispensed with the holding of AGM under section 175A (“S175A companies”), the deadline to lodge the annual return is determined by section 175A(10) read with section 197(4). Repeal and re-enact section 197(4) to clarify that filing of the annual return under section 197 for S175A companies should be within one month (or in the case of a company having a share capital which keeps a branch register outside Singapore, within two months) after the later of the following dates: the date on which the accounts and documents were sent; or the date on which all resolutions by written means (which would be have been passed at the AGM if it had been held) were formally agreed on. Provide a clearer position on the timing for filing the annual return for companies which have dispensed with holding an AGM under section 175A. Delete reference to “directors and managers” section 199(1)
“carrying on business” via subsidiary legislation. Section 366(2)(k) states that “Notwithstanding subsection(1), a foreign company shall not be regarded as carrying on business in Singapore for the reason only that in Singapore it effects any transaction through its related corporation licensed or approved under any written law by the Monetary Authority of Singapore, established under the Monetary Authority of Singapore Act (Cap. 186), under an arrangement approved by the Authority”. Amend section 366(2)(k) to clarify that “Authority” refers to “the Monetary Authority of Singapore”. Technical amendment for clarity. Reduce the minimum number of authorised representatives and filing requirement for appointment of authorised representatives 40 & 42 Section 368(1)(e) requires a foreign company to appoint at least two authorised locally-resident agents and to lodge evidence of the appointment of its agents. Section 370(4) to (6) sets out the requirements for appointment of replacement agents. Repeal and re-enact section 368. New section 368(1)(e) and (f) require a foreign company to: appoint at least one authorised representative instead of two; lodge the particulars of the appointed authorised representative. The consent of the authorised representative must be clearly indicated and documented. Introduce section 368(2) to require a foreign company to make available for inspection the evidence of appointment Simplify compliance requirements for foreign companies to register with ACRA. Align the requirements with other jurisdictions: UK, Australia and New Zealand (NZ) require foreign companies to appoint at least one agent; UK and HK do not require foreign companies to lodge
acting or likely to act against the national security or interest”. company if it would be “contrary to the national security or interest”. 20(2) of the CA, which is more broadly worded. Changes in filed documents 43 Section 372(1), (2) and (3) requires a registered foreign company to lodge a return where there is any change or alteration made in certain specified information or documents which have been lodged with the Registrar. Examples include: changes in the directors of the foreign company; changes in the agents of the foreign company; changes in the powers of any directors resident in Singapore who are members of the local board of directors of the foreign company; increase in the authorised capital of the company; changes to the number of its members (for foreign company not having capital). Amend section 372(1) to: require a foreign company to inform the Registrar if there are any changes to the registered particulars of the directors and authorised representatives; remove the requirement to update changes in the powers of any directors resident in Singapore who are members of the local board; require a foreign company to inform the Registrar if there are any changes to the description of the business or the legal form. To clarify and update the list of changes or alterations to be notified. Repeal section 372(2) and section 372(3). Simplify filing requirements to be aligned with requirements in other jurisdictions and requirements for Singapore-incorporated companies. Requirements to file financial statements 44 Section 373 requires a foreign company to file: a balance sheet that is prepared: based on requirements in its place of incorporation; or Repeal and re-enact section 373. New section 373(1) to (7) require a foreign company to lodge similar Increased disclosure from foreign companies will persons in Singapore who deal with the companies to
components of its financial statements with the Registrar as those expected of a Singapore-incorporated company i.e. file: financial statements that are prepared: based on requirements in its place of incorporation; or as if it is a Singapore incorporated public company (if it is not required to prepare accounts in its of incorporation) audited statement of its assets and liabilities, and profit and loss account in relation to its operations in Singapore (no change). make better-informed business decisions. This will also align our requirements with that in the UK, Australia and NZ. New section 373(3) clarifies that: the obligation to file financial statements is dependent on whether the financial statements are required to be prepared and tabled at AGM in the place of incorporation, and not simply whether a foreign company is required to hold AGM; the timeframe for filing will be within 2 months of the holding of the AGM or Technical amendment for clarity. Similar to that for a Singapore public company (i.e. within 7 months from the end of the financial period), as the case may be.
52 Section 401(2) provides that every person who wilfully makes or authorises the making of a statement false or misleading in any material particular knowing it to be false or misleading or wilfully omits or authorises the accession of any matter or thing without which the document is misleading in a material respect shall be guilty of an offence. Replace “accession” with “omission” in section 401(2) as the word is inconsistent in context of the provision. Correct typographical error. Penalty for holding out as carrying on business 53 Section 405(1) provides that if any person uses any name or title or trades or carries on business under any name or title of which “Limited”, “Berhad”, “Company”, “Corporation” or “Incorporated” or any abbreviation, imitation or translation of any of those words is the final word, or in any way holds out that the business is registered or incorporated that person shall, unless at that time the business was duly under this Act or registered under the Limited Liability Partnerships Act or the Business Registration Act, be guilty of an offence. Repeal and re-enact section 405(1). Remove references to “company”, “corporation” or “incorporated”. Companies are unlikely to have the words “company”, “corporation” or “incorporated” at the end of their names, unless they are exempted under section 29. As such, the blanket prohibition on the use of these words is removed. Remove references to Limited Liability Partnerships Act and Business Registration Act. Clarify that provision relates to companies the Act. Exclude application of the provision to foreign companies. Introduce a separate prohibition in relation to foreign companies under the new subsection (3). For clarity. Composition of offences