MOF and ACRA Publish Responses to Public Feedback on Proposed Changes to The Companies Act, Limited Liability Partnerships Act and Accountants Act

The Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (ACRA) have reviewed feedback received from two rounds of public consultation[1] on proposed changes to the Companies Act, Limited Liability Partnerships Act and related amendments to the Accountants Act. The changes aim to reduce the regulatory burden on business entities, enhance the transparency of business entities and introduce an inward re-domiciliation regime in Singapore. The proposed legislative amendments will be incorporated into a Companies (Amendment) Bill and a Limited Liability Partnerships (Amendment) Bill. Both bills will be tabled in Parliament this month.

Key legislative revisions following the public consultations

2.         Respondents generally supported the proposed amendments. Most respondents gave suggestions or sought clarifications on the drafting, implementation and application of the proposed amendments. Based on the feedback received, MOF and ACRA have made some revisions to the proposed amendments. The key changes are as follows:

Proposed amendments

Key changes following the public consultations

(a)For companies and limited liability partnerships (LLPs) to maintain registers of controllers

  • Expand the list of exemptions from public companies listed on SGX and companies that are Singapore financial institutions[2]to include:

-companies that are wholly owned by the Government and statutory boards

-companies that are wholly owned subsidiaries of exempted companies

-companies that are listed on overseas securities exchanges and subject to regulatory disclosure requirements on transparency of beneficial ownership

  • Give companies, which were not required to maintain registers of controllers but are subsequently required to do so, 60 days to maintain their registers of controllers
  • Penalise companies for failure to send out notices to anyone: (i) whom they know or have reasonable grounds to believe are controller; or (ii) who knows the identity of the controllers or is likely to have that knowledge
  • Reduce penalty for non-compliance with the new regime from $25,000 to $5000
  • Apply relevant parts of section 7 of the Companies Act on interest in shares to the new regime
  • Apply similar changes to LLPs

(b)New inward re-domiciliation regime

  • Empower the Minister to issue regulations to waive any requirement for transfer of registration
  • Provide that a breach of any of the conditions imposed on transfer of registration shall be grounds for winding up the company instead of striking off the company
  • Give foreign corporate entity more time (from 30 days to 60 days) to submit evidence of de-registration

(c)Annual general meetings (AGMs) and annual returns

  • Allow companies to change their financial year end (FYE) for the current and immediate preceding financial years, before deadlines for holding AGM, filing annual returns and sending financial statements expire
  • Require a company, which is exempted from holding AGMs and has filed its annual return, to inform the Registrar when its AGM (as requested by a member) is held

(d)Common seals

  • Draft the amendments to focus on the alternatives to using a common seal
  • Introduce a third alternative for signing of documents and deeds by a director in the presence of a witness who attests the signature, besides the two alternatives of signing by: (i) a director and a secretary; or (ii) two directors
  • Apply similar changes to LLPs

 

Background

 

3.         A summary of the feedback received and MOF/ ACRA’s responses for both rounds of public consultation are at Annexes 1 to 3. In the course of the public consultations, feedback on areas not under the scope of review by MOF/ ACRA were received. These have been forwarded to the respective agencies for their consideration.

 

4.         MOF and ACRA would like to thank all respondents for their comments. The key features of the bills, which incorporate the legislative revisions, are laid out in Annex 4.

 

5.         MOF and ACRA will implement the approved Bills in phases. The first phase, which will involve changes to improve the transparency of companies and LLPs, and the amendment to the Accountants Act, will be implemented by the first half of 2017.The exact effective date will be announced at a later date.

 

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MINISTRY OF FINANCE
ACCOUNTING AND CORPORATE REGULATORY AUTHORITY
24 February 2017



Annexes

Annex 1: Summary of feedback and MOF/ ACRA’s responses on proposed amendments for companies and LLPs to maintain registers of controllers, and other FATF-related amendments

Annex 2: Summary of feedback and MOF/ ACRA’s responses on proposed amendments to introduce an inward re-domiciliation regime in Singapore

Annex 3: Summary of feedback and MOF/ ACRA’s responses on proposed amendments on AGMs, annual returns and common seals

Annex 4: Key features of the Companies (Amendment) Bill 2017 and the Limited Liability Partnerships (Amendment) Bill 2017



[2] Singapore financial institutions refer to financial institutions that are registered with MAS. The list of Singapore financial institutions can be found under Appendix 1 of MAS Notice 626.

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Last Updated on February 13, 2017
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