Singapore Ministry of Finance completes review of the Companies Act

In October 2012, the Ministry of Finance (MOF) has accepted 192 recommendations from the Steering Committee that conducted the review and modified 17 of them. 8 were not accepted. This comprehensive review of the Act is the largest since it was enacted in 1967 and marks a major step forward in Singapore’s corporate regulatory framework.

The changes aim to maintain Singapore’s competitiveness as a business hub, reduce regulatory burden and compliance costs for companies and improve the corporate governance, in order to meet changing business realities and ensure a transparent corporate environment. Companies, SMEs, retail investors and company directors will benefit from the following changes:

  • Impact on Companies: Companies will be allowed to specify in their constitutional documents the mode of electronic transmission and to issue non-voting shares and shares carrying multiple votes which will give them greater flexibility in capital management.
  • Impact on SMEs: A new small company concept will be introduced for determining the requirement for statutory audit to help keep compliance costs low and a dormant non-listed company which is not a subsidiary of a listed company will be exempt from the requirement to prepare accounts.
  • Impact on Retail Investors: A multiple-proxies regime will be introduced to allow indirect investors and CPF investors to attend and vote at shareholders’ meetings to help strengthen corporate governance.
  • Impact on Company Directors: Directors will be allowed to reflect alternate addresses, in order to protect their privacy.

MOF plans to table the amendment Bill in Parliament to implement the changes by end of 2013. MOF will seek public feedback on the draft Bill in early 2013.

 

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