The Parliament of Singapore recently passed the Companies Registries (Miscellaneous Amendments) Act, which seeks to amend the Companies Act 1967 and the Limited Liability Companies Act 2005 to strengthen the corporate governance regime. Singapore business and improve transparency and beneficial ownership of companies and limited liability companies.
The amendments bring Singapore’s corporate governance requirements more in line with international standards set by the Financial Action Task Force (FATF) to make it more difficult for illicit actors to engage in money laundering, financing terrorism and other actions that abuse the system.
The Business Registers (Miscellaneous Amendments) Act (the Act), which was passed on January 10, has not yet entered into force. It will do so on the date designated by the Minister of Finance by notice in the Gazette.
The main changes proposed by the Act are as follows.
1. Persons exercising executive control must be registered as registrable controllers under prescribed circumstances
The Companies Act 1967 (CA) and the Limited Liability Companies Act 2005 currently require corporations and limited liability companies (LLPs) to maintain a register of registrable controllers. However, there is no express obligation to register this in the event that the Company or the LLP is unable to identify or does not identify such registrable controller.
By law, the company or LLP must identify the persons exercising executive control of the entity and register them as the registrable controller of the entity.
A “person exercising executive control” means:
- for a local or foreign company, a director of the company or foreign company who exercises executive control over the day-to-day or regular affairs of the company or foreign company through an executive position; and
- for an LLP, a partner exercising executive control over the management of the affairs of the LLP.
The changes aim to improve the transparency of beneficial ownership and control of companies and LLPs in Singapore. This aligns Singapore’s requirement for the identification of registrable controllers for corporations and LLPs with international expectations.
2. Compulsory register of nominee shareholders and nominators
Prior to the coming into force of the Act, although a shareholder could hold shares in the name of another person (i.e. a proponent), the proponent did not have to be identified, because the nominator is not the registered shareholder.
By law, local and foreign companies in Singapore are required to (1) maintain a non-public register of nominee shareholders and their nominators, and (2) update their register within seven days of notification of any change. by the nominative.
The changes align Singapore’s requirements for identifying a company’s controllers with international standards. Nominee shareholders are also required to inform the company of their nominee status and their nominators within 30 days of any change.
3. Stipulated deadline for local companies to update the register of appointed directors
Prior to the law, there was no time limit stipulated in the LC as to when the local company had to register changes to the information in the register of appointed directors.
By law, a local company must update its register of appointed directors within seven days after the local company is notified of:
- that a director is or has ceased to be a nominee; Where
- · any change in the contact details of a person for whom a director is the agent.
4. Stipulated deadline for foreign companies to update the register of members
Currently, the AC does not prescribe a time frame for updating the register of members of foreign societies in the event of a change in the details.
In accordance with the law, a foreign company must update its register of members within 30 days of any change in the data contained in the register.
The longer deadline gives foreign companies enough time to contact their members who may be based abroad in order to update the register of members.