The Companies (Amendment) Act 2014 (the “Amendment Act”) which will introduce wide-ranging changes to the Companies Act, will be implemented in two phases.
Two-phase implementation: 1 July 2015 and Q1 2016
About 40% of the changes in the Amendment Act will take place in the first phase on 1 July 2015. These are changes which are not directly linked to the registration and filing processes in BizFile, the online business filing and information portal maintained by the Accounting and Corporate Regulatory Authority (“ACRA”).
The second phase which encompasses the rest of the changes in the Amendment Act that have links to BizFile will take place sometime during the first quarter of 2016. ACRA is revamping BizFile and the new BizFile is expected to be launched in the first quarter of 2016.
What will be implemented in each phase
A non-exhaustive list of key amendments to be implemented in each phase is set out in the Annex to the ACRA press release dated 15 April 2015. Please click here to view the list.
A complete list of the amendments to be implemented in the first phase will be set out in the commencement notification for these amendments which will be published by ACRA by the end of May 2015. Related subsidiary legislation for the first phase of legislative amendments is expected to be issued in June 2015.
The effective date for the second phase amendments will be announced by ACRA two months before the commencement date of the amendments.
Key changes in first phase
Some of the key changes that will take effect on 1 July 2015 include:
- easing conditions for nominee directors to disclose information to nominating shareholders;
- removing financial assistance prohibition for private companies;
- keeping financial assistance prohibition for public companies and their subsidiaries, with new exceptions introduced;
- allowing listed companies to engage in selective off-market acquisitions to, among other things, make discriminatory repurchase offers to their odd-lot shareholders;
- allowing companies to issue shares for no consideration;
- permitting use of capital for share issues and share buybacks for brokerage or commissions;
- introducing audit exemption for “small company”;
- extending the application of section 216A (statutory derivative action) to listed companies and arbitration proceedings;
- allowing auditors of Singapore companies to resign before the end of the term of their office, subject to the prescribed requirements in the Companies Act, etc.
Key changes in second phase
Some of the key changes that are expected to take effect in Q1 2016 include:
- removing the current restrictions on public companies to have only one vote for each equity share;
- removing the maximum age limit (70 years old) for directors of public companies and subsidiaries of public companies;
- introducing the new multiple proxies regime;
- liberalising rules on electronic communication of notices and documents by companies;
- requiring the chief executive officer (“CEO”) of a company to disclose conflicts of interest with the company, and his or his family members’ interests, or changes in interests, in securities of the company;
- allowing a director, CEO and company secretary of a company to report an alternate address;
- empowering ACRA to debar non-compliant directors and secretaries;
- removing the requirement for a private company to keep the register of members and replacing the register with the ACRA electronic register of members;
- removing the requirement for a company to maintain a register of directors, secretaries, auditors and managers and replacing the register with the ACRA electronic register of directors, secretaries, auditors and CEOs, etc.
The following materials relating to the two-phased implementation of the Amendment Act are available on the ACRA website www.acra.gov.sg: