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December 20, 2014

The last quarter of the year brought forth a wave of legislative changes with regard to business law, with changes to the Business Registration Act and the Companies Act. The changes are explained below. I would also like to take this opportunity to wish all of you a very happy Christmas in advance!
- Koh C-u Pinn, Arielle Law Corporation

New Business Names Registration Act

The Business Names Registration Bill was passed in Parliament on 8 October. The new Business Names Registration Act replaces the Business Registration Act.

Among the policy changes:


Option to Renew Business Registration for Three Years


There will be an option for business registrants to renew their business registrantrations for three years at a time. This option is contingent upon having good Medisave contribution records. 


Conduct business in your full name and be exempted from business registration

Individuals who conduct businesses in Singapore under only their full names will be exempted from business registration since they are already identifiable.

No carrying on of business after cancellation or cessation of business registration

It is already a criminal offence to conduct business without registration. The civil consequence of conducting business without registering is that it is a lot more difficult to enforce contractual rights arising from the business in court.

The new Business Names Registration Act extends the criminal and civil consequences to situations where a business owner carries on conducting his business after his business registration has been cancelled or has ceased and has not been restored. 

Over 200 Amendments to the Companies Act

The Companies (Amendment) Act was passed in October, making the most extensive changes to the Companies Act since the Act was enacted in 1967. Over 200 amendments were made. The ramifications of the amendments are still being understood, and the changes will be discussed over several issues.

Among the policy changes:


More companies qualify for audit exemption

The amendments introduced the concept of a “small company” that is exempted from audit. A “small company” is a private company that fulfills at least two of the following three quantitative criteria:
  • Total annual revenue of not more than $10 million;
  • Total assets of not more than $10 million;
  • Number of employees not more than 50.
A company has to qualify as a small company in each of the previous two financial years in order to qualify for audit exemption in a particular financial year. This is expected to benefit 25,000 companies.


CEOs now have a statutory duty to disclose

Before the amendments, only the directors were under a statutory duty to disclose conflicts of interest in transactions and shareholdings in the company and related corporations. With the amendments, the duty of disclosure has been extended to the chief executive officers of companies.


Register of Members not required for private companies

Private companies are no longer required to keep a register of its members. With the legislative amendments, ACRA will be the one maintaining the register of members of private companies in electronic form. Private companies will have to file information concerning share ownership and changes in share ownership with ACRA. The date of filing of the information into the register will be taken as the effective date of, for example the entry of a person as a member of the company.  


Alternate address can be shown on public records

With the changes, individuals can use an alternate address at which he can be located, instead of his residential address, for ACRA’s public records. 


Send notices and documents electronically

Companies can specify in their constitutional documents the mode of electronic transmission to be used. Hence, notices and documents may be given to members through electronic communications with the consent of members.


Removal of one-share-one-vote restriction for public companies

Public companies can issue shares with different voting rights, subject to companies’ articles. This means that shares with very limited voting rights can be issued (such as voting on a resolution to wind up a company), and this gives public companies greater flexibility in capital-structuring. Whether listed companies can do so will still depend on any changes in the listing rules of the Singapore Stock Exchange.

Other amendments will be discussed in future issues.
Koh C-u Pinn Picture
Koh C-u Pinn is a director at Arielle Law Corporation, a boutique law firm that provides individualized services tailored specifically to your needs. 

Simply email us at ask@ariellelaw.com, or give us a call at (+65) 6818-9785 to chat with us about your needs. We are always happy to discuss what works best for you, whether over email, the phone, or a freshly brewed cup of coffee.
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