Business Law Reforms in Singapore Presented by: Elena Yeo (Ms) Legal Officer Legal Services DepartmentAccounting and Corporate Regulatory Authority, Singapore To provide a responsive and trusted regulatory environment for businesses and public accountants.
Overview of ACRA Accounting and Corporate Regulatory Authority (ACRA) - national regulator of business entities and public accountants in S’pore; - plays the role of a facilitator for the development of business entities and the public accountancy profession. Formed as a statutory board on 1 April 2004, following the merger of the then Registry of Companies and Businesses and the Public Accountants’ Board. Administers: the Accounting and Corporate Regulatory Authority Act, the Accountants Act, the Business Registration Act, the Companies Act, the Limited Liability Partnerships Act and the Limited Partnerships Act.
Registered entitiesAs at 31 Dec 2011, the population of registered businessentities were as follows: Entity type Number Business 151,071 Company 231,213 LLP 9,607 LP 91 Public Accounting Firms 525 Public Accountants 967
Key business law reforms in recent years Major amendments to the Companies Act rolled out 2003 to 2006, following review by the Company Legislation and Regulatory Framework Committee appointed by the Ministry of Finance, the Attorney- General’s Chambers and the Monetary Authority of Singapore in Dec 1999. New legislation - Limited Liability Partnerships Act (2005)‒ Regulates new business vehicle which gives flexibility of operating as a partnership while having a separate legal identity like a private limited company.
Key business law reforms in recent years New legislation - Limited Partnerships Act (2008)‒ Regulates new business vehicle called ‘limited partnership’ - at least one general partner with unlimited liability and at least one limited partner with limited liability. Other legal reforms:‒ Study on directors’ duties.‒ Review of the regulatory framework for branches of foreign companies.‒ Alternate address policy.
Highlights of ongoinglegislative reviews Ongoing reviews of the following:‒ Business Registration Act‒ Companies Act Proposed new legislation for regulation of branches of foreign companies.
Ongoing review- Business Registration Act Act has only had piecemeal amendments since coming into force in 1974. Timely for a comprehensive review. Objective of the review: To modernise the provisions and make them more relevant and current to the present day business environment. Public consultation on key issues for review published in mid-October 2010. Feedback and issues are undergoing review.
Business Registration Act- Key areas of review Exempting individuals carrying on business in their own names from registering. Requiring individuals resident in Singapore and carrying on business through online/electronic means in Singapore to register. Reviewing and updating the penalties for breaches of the Act.
Ongoing review- Companies Act Private-sector led Steering Committee (SC) for reviewing the Companies Act formed Oct 2007. Objective of the review: to ensure that we have an efficient and transparent corporate regulatory framework that supports Singapore’s growth as a global hub for businesses and investors. Public consultation on SC Report closed in Oct 2011. Feedback is undergoing review. ACRA also concurrently conducted its own review of regulatory issues in respect of companies (e.g penalties, administrative provisions).
Companies Act- Approach Act to be re-written; not merely amended. Aim is to make the legislation more comprehensible, coherent and practical. Companies Act to contain core company law. Migrate provisions that are not core company law to other legislation. Flexibility to allow procedures to be modified as the environment changes, through subsidiary legislation.
Companies Act- Key areas of review The SCs Report, comprising six chapters and 217 recommendations. Key areas of review:- Directors- Shareholders Rights and Meetings- Shares, Debentures, Capital Maintenance, Schemes, Compulsory Acquisitions and Amalgamations- Accounts and Audits- General Company Administration- Registration of Charges
Companies Act- Key areas of review Directors’ duties‒ No codification of directors’ duties; extension of duties to other officers Extension of disclosure requirements to other officers‒ Extension to Chief Executive Officer
Companies Act- Key areas of review Enfranchising indirect investors- Express provision for multiple proxies for specific members who provide custodial or nominees services Electronic Transmission of Notices and Documents- Liberalising the rules for companies to transmit notices and documents electronically.
Companies Act- Key areas of review Share Capital and others‒ Refining regulation of transactions affecting share capital – e.g. uniform solvency test, financial assistance rules etc. Introduction of a “small company” concept for audit exemption‒ Updating approach for audit exemption to be based on criteria such as revenue, assets and number of employees.
Companies Act- Key areas of review Alternate address‒ Allow disclosure of alternate address (where person can be located) instead of residential address‒ Authoritative ACRA register for private companies‒ ACRA register definitive in place of the register of members (for private companies)
Ongoing review- Act regulating foreign entities Background:‒ Companies Act contains provisions relating to foreign companies.‒ Companies Act Steering Committee took the view that the laws relating to the registration and regulation of foreign entities should be placed in separate legislation to facilitate the streamlining of Companies Act.‒ No intent for any significant widening of the scope of regulation for foreign entities.
Act regulating foreign entities- Key areas of review Clarifying the reference of “foreign companies” to “foreign entities”. Streamlining the requirements and procedures for registration of foreign entities. Streamlining continuing filing obligations. Enhancing financial disclosure requirements and accountability for financial information filed by foreign entities for greater transparency. Expansion of the grounds for striking-off a foreign entity.
Other developments –Formalities in executing documents ACRA is working with the Attorney-General’s Chambers in the implementation of proposals to simplify the execution of instruments, especially deeds, by individuals and corporations. Main change will be that a deed will no longer need to be sealed in the case of individuals, companies, limited liability partnerships and various other corporate bodies. Relevant persons will be allowed to sign on behalf of corporate bodies as an alternative to affixing of its common seal.