The Accounting and Corporate Regulatory Authority (ACRA) is currently collecting public feedback on the proposed amendments to the Companies Act (CA) from 17 July 2020 to 17 August 2020
The Companies Act Working Group (CAWG) was set up by ACRA in January 2018 to review several areas of the CA. The review was part of ACRA’s efforts to Singapore’s corporate laws and regulatory framework to stay competitive. The proposed amendments also relate to the streamlining of filling processes and updating regulatory requirements. Some key recommendations by the CAWG are mentioned below:
The CAWG considered the use of digital media and technology within the context of the CA and made recommendations in respect of dematerializing physical share certificates, facilitating digital meetings, and clarifying the application of existing digitalization provisions to documents under the CA.
The concept of “publicly accountable company” should be introduced for financial reporting to better modify the financial obligations in the CA to a wider group of stakeholders (e.g. shareholders, creditors), this theory is based on the public interest/ accountability of companies, and
The CAWG also recommended the introduction of the concept of “micro” company, which is a company that has its total annual revenue and total assets being not more than $500,000, and micro non-publicly accountable companies should be allowed to prepare reduced/simplified financial statements, rather than full sets of financial statements, to reduce business costs.
All companies must submit financial statements. But these types of companies are an exception: (i) dormant relevant companies, (ii) prescribed companies that meet the criteria in regulations made under the CA, and
Furthermore, all filed financial statements are recommended to make available to the public, except for filed documents relating to Gazetted exempt private companies which are wholly owned by the Government under section 12(2A) of the CA.
In addition to the proposed amendments by the CAWG, ACRA has also reviewed existing regulatory processes and requirements and proposed further legislative changes to the CA. The key proposed amendments are mentioned as follows:
a. Grant the Registrar power and the Minister the power to exempt a company from all of the requirements in the Accounting Standards and require the company to comply with other accounting standards.
b. Foreign companies should be allowed to prepare financial statements in accordance with accounting standards that are substantially similar to Singapore’s Accounting Standards to file these financial statements with ACRA, so as to reduce compliance costs.
c. Besides, ACRA also recommended that foreign companies with insignificant operations in Singapore file unaudited branch accounts, instead of an audited statement of the Singapore branch.
a. ACRA recommended removing the requirements for public companies limited by shares to hold statutory meetings and their directors to forward a statutory report to members prior to the meeting
b. Grant further recommended that the Registrar the power to update changes in appointments of directors and secretaries to enhance the accuracy of the information in the registers of directors and secretaries
c. Clarify the date that the Registrar strikes a company off the register, or restores the company’s name to the register, such that it coincides with the date indicated in ACRA’s BizFile+ system instead of the date published in the Gazette.
Further information on the Proposed Amendments to the Companies Act can be found on the website acra.gov.sg. It can be seen that Singapore always updates new amendments in accordance with social needs to help businesses have the most ideal business environment. Please follow the ACE website to read more about Singapore Business Registration.
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