The Companies (Amendment) Act 2017 (Amendment Act) was passed on 10 March 2017 and came partially into effect on 31 March 2017. A key change is the introduction of a requirement for Singapore companies and limited liability partnerships, as well as foreign companies registered to do business in Singapore, to keep registers of significant controllers and nominee directors. We have covered this in a separate update focusing on this.
Execution of deeds without affixing a common seal
Among the various other changes that came into effect on 31 March 2017 was one that did away with the need for Singapore incorporated companies to execute a deed by affixing a seal to it. Instead of affixing a seal, a Singapore company may instead have the document executed as a deed by having it signed by:
- a director and a secretary of the company;
- two directors; or
- one director in the presence of a witness who attests the signature.
Attestation by the witness would involve the witness signing against a statement that the document was signed or executed in his presence. The deed will still have to be delivered as a deed.
Amendments had earlier been proposed to allow a corporation incorporated outside Singapore to make a contract in any manner permitted by the laws of the territory in which the corporation is incorporated for the execution of documents by such a corporation. However, these provisions did not find their way into the Amendment Act. Foreign companies executing Singapore law governed deeds will either need to affix a seal or continue to rely having the deed executed by an attorney pursuant to section 41(8) of the Companies Act.
Other changes that came into effect on 31 March 2017
Other changes also came into effect on 31 March 2017 are as follows:
- Requiring foreign companies registered in Singapore to keep a register of all their shareholders not simply a branch register of Singapore-resident shareholders;
- Providing that the issue or allotment of bearer shares and share warrants by foreign companies is void and cannot be enforced under Singapore law; and
- Extending the period of time for which records of a company which has been wound-up, dissolved or struck off must be kept.
Other changes coming into effect later
Other changes to come into effect later are as follows:
- Foreign companies in certain jurisdictions may redomicile in Singapore as a Singapore company by the simple process of registration with the Accounting Corporate Regulatory Authority (ACRA). This is expected to come into force sometime in the first half of 2017. There will be implementing subsidiary legislation that will flesh out the details of the framework then. Please see our update on this consultation for more information on the redomiciliation framework.
- A streamlining of the timing requirements for Annual General Meetings and Annual Returns is to come into force in 2018. All timings will take their mark from the company’s financial year end, with the default start date of a company’s financial year being its date of incorporation and the default end date being 12 months later. Companies should check if their financial year end differs from the default end date and, if so, should notify ACRA accordingly. Please see our update on the consultation for more information.
- The insolvency framework for companies has been amended to allow greater scope for cross-border insolvencies. The legal framework for schemes of arrangements and judicial management has also been amended to allow creditors that provide rescue financing to troubled companies to do so on the basis that the debt will receive priority in the event of a winding up if the rescue ultimately fails.