Behind Every Thriving Business : Directors & Company Secretaries’ Vital Role in SG’s Corporate Ecosystem
Singapore has revised its Company Act to simplify the administrative workload of a company due to the compliance of company registration in HK. Currently, the timeline for holding the annual general meeting (“AGM”) and filing Annual return (“AR”) is inline with the date of the financial year-end, instead of the anniversary date.
Since every company can only function when it has members behind its steering wheel, the burden of compliance lays on the shareholders, directors and company secretaries who are the mandatory members for a Singapore private limited liability company.
The Company Act also draws the general scheme of how these parties work together: the directors act the role of manager of the company; company secretaries are the compliance officer under the management of the directors; shareholders are the owner to bear the lose and share the gain of the company.
The purpose of this article is to highlight the duties and obligations of a Singapore company’s directors and company secretaries before deciding on Singapore company registration.
Requirement of Directors
Every company must consist of at least one director who must be at least 18-year-old and a Singapore resident (either a Permanent Resident, Citizen, EntrePass holder, or Employment Pass of Singapore). The director must possess the full legal capacity and must not be holding any disqualification from acting as a director of a company.
Requirement of Company Secretaries
The appointment of company secretaries is mandatory but allows flexibility. If this position is vacant, it must not be open for more than six months; the director of the company can act as the company secretary at the same time, except the company with the only-one director.
Every company must consist of at least one company secretary who must be at least 18 years old and a Singapore resident who is usually residing in Singapore.
Importance of Director and Company Secretary
From the perspective of shareholders, both director and company secretary is one of the employees of the company because they are paid to work for the company and their duties and powers are written in the company’s Article of Association (“AA”).
Although a company is free to customize the content of its AA to suit the needs, Singapore’s Company Act dictates the fundamental powers and obligations of Directors and Company Secretaries, to avoid confusion in the public who are outsiders of the company. In general, the director is the person to oversee the work of other employees including the company secretary and is held ultimately responsible for errors and wrongdoing of them. If the company secretary does not correctly handle the company’s compliance duties, the director is responsible for this.
Obligation: Annual Return
Every company must file its annual return (“AR”) with ACRA each year to keep its registration information up-to-date. The AR is an electronic form lodged with the ACRA’s online filing portal BizFile+ website.
No company can be exempted from filing its AR; however, qualified companies as a solvent exempt private company (“EPC”) or a private dormant company are able to file the Simplified Annual Return of a particular year to save efforts.
Although the company secretary is usually appointed by the company to prepare for the required information, only the director can sign off the additional documents submitted with the AR.
Either the company secretary, the director, or the registered filing agent of Singapore are eligible to fill in the AR on BizFile+.
Schedule of filing AR
The directors also have to ensure timely filing. The statutory timeline for filing AR is inline with the company’s financial year-end date, rather than its anniversary date; and the AR must be submitted within seven months after this date.
The return has to include the following information:
- Company Name
- Unique Entity Number
- Registered Office Address
- Particular of members
- Shareholders and their respective share capital
- Audited financial statements (if applicable)
- Date of its annual general meeting (“AGM”) (if any)
Obligation: Annual General Meeting
All companies in Singapore must hold an AGM after their financial year-end because an AGM is an annual gathering event for a company to present its financial statements and accounts to members. Shareholders can question the financial and operational material of the business and thus the other members can address their concerns. The shareholders deal with resolutions for subjects written in the company’s Article of Association, and extra subjects which have been included in the notice of the AGM.
Company Secretary’s duties in AGM
It is the duty of the company secretary to prepare for the AGM, including sending notice of AGM to all shareholders and getting all the documents ready for presentation in AGM. The company can appoint a registered secretarial service firm to assist the company secretary in this matter.
The company secretary has to prepare for the written record of the meeting which the chairman (usually, the head of the board of directors) signs off the record.
Exemption and Dispensation of AGM
However, companies can be exempted from the AGM if they send their financial statements to their members within five months after the financial year-end. Alternatively, companies can dispense the AGM if all members pass a resolution to dispense with the AGM.
Given that the AGM is essential for shareholders to protect their rights, the Company Act has a provision to safeguard the calling of AGMs to avoid exploitation even the company is exempted from AGM or has dispensed AGM.
For the AGM-exempted or dispensed companies, any members can still request to hold an AGM if they raise the request before the end of the six-month after the financial year-end.
Singapore ACRA has published an array of How-to Guides to cover the statutory requirements of filing annual return and holding of AGM for members of private companies in Singapore.
If you are not a Singapore resident and you are planning to register a Singapore private company, AsiaBC has a full range of Singapore business services for foreigners. You can refer to our Singapore remote company formation service if you want to skip the matters of compliance, you can also refer to your Singapore business bank account opening service after your incorporation. You can apply for your Singapore residency because you are running business in Singapore.