Key Takeaways: - Report and recommendations by Working Group - Proposed amendments - Rationale for the amendments

1. Proposed amendments to Singapore
Companies Act
CS Meenakshi Jayaraman

2. Credits and Acknowledgments
Iswariya BS
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3. 3
Legends used in the Presentation
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ACRA Accounting and Corporate Regulatory Authority
AS Accounting Standards
CA Companies Act
CAWG Companies Act Working group
CFS / FS Consolidated Financial Statements / Financial Statements
u/s Under section

4. 4
Presentation Schema
Background of CAWG
Report and
recommendations by
CAWG
Proposed amendments &
Rationale for amendments
Public consultation
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5. Background of CAWG
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6. ACRA had set up a Companies Act Working Group (CAWG) to review several areas of the CA
Reason for review: To ensure Singapore’s corporate laws and regulatory framework stay
competitive
Composition of CAWG: Chaired by then-ACRA board member and comprising members from
local and international law firms, industry regulators and associations
ACRA also reviewed other requirements in the CA, with a view to streamlining filing process and
updating regulatory requirements

7. Report & recommendations by CAWG
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8. 8
CAWG reviewed 56 issues and recommended 36 legislative reforms, covering the following areas-
Facilitating
digitalisation
Types of
companies &
financial
reporting
Matters
relating to
directors &
company
secretaries Safeguarding
shareholders’
interest
Share capital &
financial
assistance
Updating
outdated
provisions

9. Contd.
9
Considerationstakenintoaccountwhile
recommendingtheamendments-
the evolving business environment
including developments in the use of
technology by companies
striking a balance between an effective
and efficient regulatory framework and
the compliance burden on Companies

10. Proposed amendments & Rationale
for amendments
10

11. Dematerialisation of shares and facilitating digitalisation
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The CAWG considered the use of digital media and technology within the
context of the CA and made recommendations in respect of-
 dematerialization of physical share certificates,
 facilitating digital meetings and
 clarifying the application of existing digitalization provisions to
documents under the CA
This proposed amendment will remove the requirement of physical
share certificate under CA

12. 12
•To introduce a concept of “publicly accountable company” for the purposes of financial
reporting to better tailor the financial reporting obligations in the CA to a broader group of
stakeholders, based on the public interest / accountability of companies and
•To introduce a concept of a “micro” company, defined as a company which fulfils the
requirements of total annual revenue and total assets each being < 5 lakhs SGD, and allow
such micro companies that are non-publicly accountable to prepare reduced / simplified FS
Review of company types & refinements to financial
reporting criteria
On reviewing the existing company types and financial reporting requirements in the CA, the CAWG
recommended -

13. Contd.
13
On reviewing the requirements to file FS, CAWG proposed to retain the current requirements that -
•All Companies shall file FS
•Exceptions:
• Dormant company
• Prescribed companies which meet the criteria as specified in CA
• The existing solvent exempt private company criteria shall be
prescribed in the reg.
• All filed FS should be made available to the public, except for
filed documents relating to Gazetted exempt private companies
which are wholly owned by the Government u/s 12(2A) of the CA

14. Streamlining and clarifying financial reporting
requirements for companies & foreign companies
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•To grant the Registrar the power to exempt a company from
compliance with any or all of the requirements in the AS and
require the company to comply with other AS
Proposed
amendment
•To provide clarity on the scope of the Registrar’s powers in relation
to exemptions from any / all of the requirements of the AS and
substitution with other AS.
Rationale for
amendment

15. Contd.
15
Amendment
To grant the Minister the power to exempt by order published in the
Gazette a specified class / description of companies from compliance of the
FS / CFS with any or all of the requirements of the AS and require the
companies of the specified class or description to comply with other AS
Reason for amendment
To provide clarity on the scope of the Minister’s powers in relation to
exemptions from any or all of the requirements of the AS and substitution
with other AS.

16. Contd.
16
•To streamline the financial reporting requirement for foreign
companies by requiring such companies to lodge those financial
statements
•If the foreign company prepares FS in accordance with AS that
are substantially similar to Singapore’s AS
Amendment
•To reduce compliance costs for foreign companies that operate in
jurisdictions that uses AS that are not comparable to Singapore’s
AS / are not required to prepare FS in accordance with any AS, as
the foreign companies will not be required to prepare 2 different
sets of FS
Reason for
amendment

17. Contd.
17
• Allow foreign companies with insignificant operations in
Singapore to file unaudited branch accounts, instead of an
audited statement of assets, liabilities and profit and loss in
respect of the foreign company’s operations in Singapore
Proposed
amendment
• To reduce compliance costs for foreign companies with
insignificant operations in Singapore in preparing and auditing
the FS which may involve expense unduly out of proportion to its
value
Rationale for
amendment

18. Removing outdated requirements and clarifying
provisions in the CA
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 Rationale for amendment
To reduce compliance burden and the CA already provides other means to convene meetings and
for members to obtain the same information in the statutory report.
 Proposed Amendment
Remove requirements for public companies with a share capital to hold statutory meetings and
their directors to forward a statutory report to member prior to the meeting

19. Contd.
19
 Proposed amendment
To grant the Registrar the power to update the registers on changes in the appointments of directors
and secretaries at his discretion
 Rationale for amendment
To enhance the accuracy of information maintained in the registers as the current CA does not provide-
(a) the Registrar can amend these registers upon being notified of changes in appointments or
(b) the Registrar has the discretion not to amend the registers on changes in appointments

20. Contd.
20
Proposed amendment
To provide that a company is legally dissolved / restored on the date that
the Registrar strikes off / restore the company’s name from / to the
register as indicated in ACRA’s BizFile+ system
Rationale for amendment
To remove ambiguity over a company’s legal status after the Registrar has
struck off / restored the company’s name from the register and before the
notice of striking-off / restoration is published
Bizfile+ is an online directory for corporate paperwork in Singapore which was introduced by
ACRA in 2004 as a web system to upload, store and retrieve data on business registered in
Singapore

21. 21
•To allow holders of options / convertible securities issued on /
before the date of the offer who exercise their conversion rights
prior to the date of the notice of compulsory acquisition to
express their approval / disapproval of the offer by having their
shares count towards the 90% threshold
Proposed
Amendment
•The current approach prejudices the rights of holders of options /
convertible securities as potential shareholders of the company
and
•To respect their rights as potential shareholders by allowing them
to exercise conversion rights and express their approval /
disapproval of the offer, while preserving certainty to the offeror
Rationale for
amendment
Rights of holders of options / convertible securities in
compulsory acquisition of shares

22. Public Consultation
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For the proposed amendments to CA, ACRA has invited
public to provide feedback on the same from 20th July,
2020 to 17th August, 2020
The consultation documents can be accessed by public at
ACRA’s website- www.acra.gov.sg
And REACH consultation portal www.reach.gov.sg
The public can share their comments via email to
ACRA_Public_Consultation@acra.gov.sg with a subject
“Public Consultation on proposed amendments to the CA”
On receipt of comments from the public, ACRA will publish
a summary of comments received without disclosing the
identity of respondents

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