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Singapore| Synopsis on Law Reform (Toh Wee San)
 

Singapore| Synopsis on Law Reform (Toh Wee San)

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    Singapore| Synopsis on Law Reform (Toh Wee San) Singapore| Synopsis on Law Reform (Toh Wee San) Presentation Transcript

    • CRF 2013: Business LawReform Updates in Singapore Presented by: Toh Wee San (Ms) Assistant Chief Executive Legal and Regulatory ComplianceAccounting and Corporate Regulatory Authority, Singapore (ACRA) To provide a responsive and trusted regulatory environment for businesses and public accountants.
    • Contents Background of ACRA - Over-view, legislation administered and relevant statistics Key Business Reforms in 2012 – Business Registration Act, Companies Act and Others Details of Reforms - Background, key recommendations and coming up
    • Overview of ACRA National regulator and facilitator of businesses and public accountants in Singapore. Our vision  To make Singapore the trusted and best place to do business.  To foster a vibrant environment for the development of business entities and supports the development of the public accountancy profession. Our functions include –  Administering the Accounting and Corporate Regulatory Act, the Accountants Act, the Business Registration Act, the Companies Act, the Limited Liability Partnerships Act and the Limited Partnerships Act.  To report to the Government on matters relating to the registration and regulation of business entities and public accountants.
    • ACRA AdministeredBusiness Entities • Business • Companies Act Registration Act (Cap. 50) (Cap. 32) Sole Proprietorships Companies & Partnerships Limited Limited Liability Partnerships Partnerships •Limited • Limited Liability Partnerships Act Partnerships Act 2008 (Act 37 of (Cap. 163A) 2008)
    • Statistical Highlights ofACRA Registered Entities 40,000 30,000 Business 20,000 Company 10,000 LLP 0 LP FY FY FY FY 2008/09 2009/10 2010/11 2011/12 3.5% Average annual growth rate of the number of registered entities Source: ACRA Annual Report 2011/2012
    • Key Business Law Reformsin 2012 Business Companies Registration Act Act Other developments
    • Business Registration ActBackground of Review Business Registration Act was first enacted in 1974. Only piecemeal amendments were made since it came into force. Comprehensive review to ensure a conducive, effective and efficient regulatory framework for business names registration in Singapore. Public consultation of the recommendations was first issued in October 2010 (available on ACRA’s website). Responses to the public consultation in 2010 have been gathered and various dialogue sessions were held in 2011. Formulation of policies completed in 2012.
    • Business Registration ActACRA’s Key Recommendations Individuals (sole proprietors or partners) carrying on business in their own names need not register under new Act  Expected to reduce the regulatory burden on persons carrying on business in their own names. Double the maximum penalties for the following offences  To streamline with the penalty regime in the other Acts that ACRA administers
    • Business Registration ActACRA’s Key Recommendations To allow a registered sole-proprietorship or partnership to directly convert to a company  Modeled after the existing regime which permits a partnership to be converted to a limited liability partnership under the Limited Liability Partnership Act (Cap. 163A) To streamline the reporting of deceased registrants  In law, ACRA can only act on executor’s/administrator’s instructions.  In reality, most deceased’s next-of-kin (NOK) will not apply for probate (most deceased are small businessmen with few assets).  Proposal aims to streamline our processes to accept an NOK’s updates to our records with acceptable evidence adduced.
    • Business Registration ActMoving Forward Public Consultation on the draft Bill anticipated to commence in mid 2013. The new Act is targeted to be passed in Parliament in the first half of 2014 and to come into force in the second half of 2014.
    • Companies ActBackground of review Steering Committee (SC) formed in October 2007 to review the Companies Act. Objective:  Update our company law to meet changing business realities  Reduce the regulatory burden and ease compliance for companies  Ensure a transparent corporate environment that gives ordinary investors confidence Public consultation on the SC’s Recommendations held between June to October 2011 (available on ACRA’s website)  217 recommendations were made
    • Companies ActUpdates for 2012 “In evaluating views on each of the 217 recommendations, MOF has adopted a principled, but pragmatic approach. We have sought to ensure that we keep a competitive business environment, but one that preserves investors’ rights and interests where they really matter.” Source: Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam on MOF’s responses to the SC’s recommendations at the Securities Investors Association (Singapore) Investors’ Choice Awards Dinner held on 3 October 2012
    • Companies ActUpdates for 2012 Ministry of Finance’s (MOF) responses to the SC’s recommendations announced in October 2012 (available on MOF’s website)  192 recommendations accepted  17 recommendations modified  8 recommendations rejected Largest number of changes since the Act was introduced in 1967. Anticipated to bring about benefits to companies, small medium enterprises, retail investors and company directors.
    • Companies ActApproach to the review Phase 1: Implement Changes Phase 2: Re-write of (Amendment of the Companies Act Companies Act)
    • Companies ActHighlights of MOF’s responses Allowing public companies to issue shares with multiple and non-voting rights subject to safeguards  Allows for greater flexibility to such companies in capital management.  Additional restrictions, if any, may be imposed on listed companies by the Singapore Stock Exchange. New small company criteria for audit exemption  To enable small companies to keep compliance costs low.  Expected to benefit about an additional 10% of all companies (or approximately 25,000 more companies).
    • Companies ActHighlights of MOF’s responses Multiple proxy regime to enfranchise indirect investors  Aims to provide for more active participation at general meetings by indirect investors and help to strengthen the culture of corporate governance. Allowing directors to reflect alternate addresses on ACRA’s register  New regime serves to protect the privacy of directors
    • Companies ActHighlights of MOF’s responses Abolishing restriction on financial assistance for private companies.  Deregulation warranted as shareholders have greater control over decision making in such companies.  Such companies have fewer resources to obtain professional advice.  Creditors can rely on directors duties and wrongful trading recourse.  Consistent with leading jurisdictions. ACRA’s register as the register of members for private companies  Removal of dual reporting, to company and regulator.
    • Companies ActHighlights of MOF’s responses Not to codify directors’ duties  Codification may result in a loss of flexibility and may not be the best for business efficacy.  Companies Act already contains a statutory statement of directors’ duties. Extended disclosure requirements for directors to CEOs  To promote better standards of corporate governance.
    • Companies ActHighlights of MOF’s responses Retention of the Exempt Private Company (EPC) regime for filing of financial information  Abolishing the EPC regime may negatively impact Singapore’s competitiveness.  Confidentiality afforded by the EPC regime is important to companies.
    • Companies ActMoving Forward Companies (Amendment) Bill slated to be tabled in Parliament by end 2013. Public Consultation on the draft Bill anticipated to be first half of 2013.
    • Other DevelopmentsFormalities in Execution of Documents Collaboration with the Attorney General’s Chambers to simplify the formalities in the execution of deeds and documents.  This will include the removal of the requirement for a common seal. Amendments will be introduced to the Civil Law Act, the Companies Act and the Limited Liability Partnerships Act. Public consultation is planned for 2013.
    • Conclusion Hectic year ahead for law reform to draft and consult on draft legislations. Changes in law, where applicable also to tie in with the design and implementation of new filing system targeted for 2014.
    • Thank You