MOF & ACRA Propose Changes To Companies Act
The Ministry of Finance (MOF) & the Accounting and Corporate Regulatory Authority (ACRA) have proposed amendments to the :
A) Companies Act,
B) Limited Liability Partnerships Act &
C) Accountants Act,
in a joint statement released today, which may affect you …
The amendments are open for public consultation starting Tuesday till Jan 13, 2017.
5 pointers of likely changes & how they will affect you:
1. AGM
To reduce regulatory burden & improve ease of doing business, under the proposed changes, all private companies will be exempted from holding AGMs subject to specified safeguards.
NOTE :
Currently non-listed companies should hold their annual general meetings (AGMs) no later than the last day of the 6th month after the end of the financial year.
CBO : The question is, what constitutes “specified safeguards” ? Let’s wait and see…
2. Common Seal
The legal requirement for companies & limited liability partnerships (LLPs) to use common seals will also be removed
CBO : This does not really affect normal business operation. In fact, this will be better for both business owners & their corporate secretaries as there is no need to keep the Seal, and to document every time the Seal is used. Will be lesser costs to business owners, and savings of storage space by their corporate secretaries.
3. LLP to maintain Registers
To enhance transparency of businesses, the proposed changes require LLPs incorporated or registered in Singapore to maintain registers of beneficial owners at prescribed places, such as the company’s registered office.
CBO : Good governance for LLP to do so.
4. Foreign Companies required to maintain Registers
Foreign companies registered in Singapore are also required to maintain registers of beneficial owners and public registers of shareholders.
CBO : Fair and good governance to do so.
5. Liquidator to keep records for longer period
A liquidator will be required to retain records of wound-up companies & LLPs for 5 years instead of 2, while the options for companies & LLPs to destroy records early if they are wound up by their members, partners or creditors, will be removed.
CBO : Stricter requirement on Liquidator, may mean higher liquidation fees to clients going forward to cover storage costs of records for longer period of time.
6. AML & KYC
The Accountants Act will be amended to clarify that a breach of the Ethics Pronouncement 200 (EP200) – which sets out mandatory anti-money laundering ( AML ) and countering the financing of terrorism requirements for professional accountants – is grounds for disciplinary action.
CBO : Stricter Know Your Client ( KYC ) on new clients, which means longer new client OnBoarding procedure, may cause new clients to be unhappy if the latter do not understand.
Hope the above sheds some lights in laymen’s term to the business owners here.
If you need help, feel free to contact us at :
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