Resignation Mechanism for Sole Ordinarily-Resident Directors of Companies Who Are Unable to Find Replacements

Parliamentary Question by Ms Diana Pang Li Yen:

To ask the Prime Minister and Minister for Finance (a) whether ACRA has recorded cases where a company's sole ordinarily-resident director is unable to resign because no replacement has been appointed and other directors or shareholders remain uncontactable; (b) if so, what avenues currently exist for such a director; and (c) whether ACRA will consider introducing a safeguarded resignation mechanism, subject to reasonable notice and compliance checks.

Parliamentary Reply by Second Minister for Finance, Mr Jeffrey Siow:

The Companies Act requires each company to have at least one director who is ordinarily resident in Singapore. This ensures that there is at least one person in Singapore whom regulators hold accountable for statutory obligations.

Individuals who intend to accept such directorship appointments should be mindful of the duties of a director, and the risks when taking on such appointments, and factor this into their considerations before accepting appointment as the sole director who is ordinarily resident in Singapore.

There are situations where a sole director who is ordinarily resident in Singapore is unable to resign because foreign directors and/or shareholders are unresponsive or uncontactable and hence no replacement can be appointed. In such a scenario, the sole director who is ordinarily resident in Singapore has the option to wind up the company under the Insolvency, Restructuring and Dissolution Act 2018 via application to the Court. ACRA may also strike off companies that are not carrying on business, based on prescribed circumstances under section 89B of the Companies Regulations.

ACRA has been consulting relevant stakeholders in the business community on the matter and will take the feedback into consideration as part of our regular reviews.