Are you in-the-know regarding the latest legislative updates? The world of business and legislation in Singapore is an ever-changing one, and it may be difficult to stay abreast of all public legal matters, regulations, and every single change in business legalities.
While it’s essential for all businesses to be compliant in all forms, it may be overwhelming – given constant changes and amendments – to ensure one’s entity is compliant, regulated, and abiding by legal frameworks.
However, with APL Peak and our informed team, we can help you and your designated corporate secretary specialist keep up-to-date with everything business-related, and maintain a good standing of compliance for your business in Singapore.
Enhanced Compliance Guidelines
The Accounting and Corporate Regulatory Authority (ACRA) initiated the process of conducting an extensive review of Singapore’s corporate laws and regulatory framework after the many changes that took place in 2018. These changes were born from technological advancement and the enhancement of the OECD’s compliance guidelines.
It is for this purpose that the Companies Act Working Group (CAWG) was formed. The body has reviewed over 56 issues and recommended at least 36 legislative reforms – many of which have already been implemented or are expected to come into effect in the near future. Some additional thought has been given to the effects of the COVID-19 pandemic on business as well, and this further endorsed many of the initiatives that were already underway.
Provisions have been made to ensure that the country’s regulatory framework and corporate laws remain competitive within other jurisdictions, while providing necessary updates to outdated frameworks.
Key Recommendations By CAWG And Proposed Amendments
How Compliance Obligations May Be Affected
These are some of the recommendations that will need to be considered:
Digitization Initiatives: The dematerialization of share certificates; general meetings and board meetings of a company can be held digitally; general meetings held digitally and in more than one location will be allowed; it will become mandatory for companies to accept proxy instructions by electronic means; and a wider scope of documents can be transmitted electronically to members, officers, or auditors.
New Company Types: Two new types of companies will be introduced: A “micro” company and a “publicly accountable company”, each with their own parameters of compliance in terms of fiscal value (assets and revenue) and legislative requirements.
New and Revised Financial Reporting Obligations: Renewing the prescription of required documents to be submitted for the financial report in order to comply with the Singapore Financial Reporting Standards (SFRS). There has been a movement towards reducing the requirements for micro companies, in order to better support small business.
Recommended Scope Narrowing: This refers to the narrowing of the scope of the current small company audit exemption, so that it applies only to small companies that are not publicly accountable. Publicly accountable companies will not be able to use the audit exemption provision.
Changing of Directors and Company Secretaries: Directors may be allowed to appoint themselves as company secretary, and will be exempted from the need to disclose the interests of foreign holding companies where they have full ownership.
What Should You Be Doing?
How To Ensure Compliance
The good news is that almost all of the proposed changes are extremely straightforward and simple enough to put into practice. They also do not require immediate and drastic action from the company. These are our recommendations for your company, all of which can be addressed by your corporate service provider to maintain a good standing of compliance:
- Dematerialisation of Share Certificates: Paper share certificates will not be automatically revoked, and the digitization of these share certificates is merely prescriptive and not obligatory.
- Digital Meetings: Once the amendment is passed, companies will simply be required to specify whether or not they hold digital meetings. Conventional in-person meetings are still valid and acceptable, since this amendment too is merely to enable better business.
- Sole Directors as Company Secretaries: Should this amendment pass, it is highly advisable that a company director wishing to adopt this methodology should undergo training. The requirements and obligations of a company secretary are such that you will need to learn how to maintain a good standing in terms of compliance regulations.
There are a number of ways in which these proposed amendments can improve and streamline your business in Singapore, and ACRA has proposed these changes to better address requirements around the response to COVID while promoting an overall improvement in business compliance legislation. These amendments are largely still in the public consultation phase, however, and are subject to potential changes and fine-tuning.
Make sure that you talk to us at ALP Peak about how we can help you incorporate these amendments to improve your business functionality and maintain a good standing of compliance. We are here to help, and we have a host of services that allow us to keep your business in Singapore on the right track. Start your one-month FREE TRIAL today, no strings attached.