The Singapore company constitution outlines the regulations that a firm must follow. The extent of the company’s operations, its legal name, and the protocols for member interaction and economic transactions are all described in detail.
Additionally, it details the company’s and its members and executives’ rights and privileges. The firm is required by law always to behave following its bylaws. So, before you incorporate your business, preparing an acceptable constitution is crucial.
A firm must adopt a company constitution when it is incorporated in Singapore. You may need to make adjustments to your Singapore company constitution later, if necessary, to comply with the Companies Act.
Any section of the Singapore company constitution that conflicts with or go against the laws outlined in the Companies Act is not enforceable, even if the Singapore Companies Act does not specify the requirements that must be contained in a constitution.
This helpful guide covers everything you need to know about the Singapore company constitution, its contents, and the key articles of the Company Law pertinent to the constitution.
What Is A Singapore Company Constitution?
The first legal document a prospective business presents to the Registrar is the constitution, which serves as the foundation for incorporation.
A Singapore company constitution is a legally binding document that governs its operations. It lays out the policies and processes used to run the firm; each company must ensure its operations follow its constitution.
The Memorandum of Association and Articles of Association (M&AA), two different papers that jointly performed this purpose, were necessary prior to the passing of the Companies Amendment Act 2014.
These two documents have now been combined into a single document called the Business Constitution due to the Amendment 2014 change.
The Singapore Companies Act defines the constitution of a company as follows:
- The bylaws that a business files with the Registrar
- The Memorandum and Articles of Association of the Company are in effect immediately before the Amendment Date in the case of Companies Existing Before the 2014 Amendment to the Companies Act.
The name of the company, the kind of activity it will do, the members’ liability, and the amount of the firm’s capital are all stated in the Singapore company constitution.
The constitution also describes the business’s fundamental goals, the directors’ duties and privileges, and the rules and regulations by which a company must be run. A firm is required to follow all of the constitution’s guidelines.
ACRA Compliance With The Singapore Company Constitution
Only the rights that apply to a person as a company member are granted by Section 39(1) of the Singapore Companies Act.
Being compatible with the Singapore Company Constitution requires a lot. For instance, even if other shareholders disagree, a member can use his right to vote at an AGM. He is granted this voting privilege as a company member under the Company Constitution.
On the other hand, a privilege granted to someone for any different administrative or directorial position is exempt from Section 39(1).
For instance, a director who has been given veto power under the constitution might not be able to use it. The court cannot enforce this clause of the company’s charter because it only concerns the director’s role as the company’s director, not the firm’s member.
Understanding The Key Constituents Of A Singapore Company Constitution
The Companies Act does not expressly state what should be in a company’s constitution, save from a few obligatory sections.
However, most regulations governing the company’s internal management are found in the constitution, including those governing shareholders’ rights, shareholders’ conduct, share transfer policies, the nomination and authority of directors, and directors’ annual general meetings.
The following sections of the company’s constitution must be included according to the Companies Act:
Clause of Name
- As approved by the company registry, the company name is stated in this section. The company will always use this name when conducting business and in formal documents. When choosing a company name, the corporation must adhere to many rules.
Clause of Registered Office
- The location of the company’s registered office is specified in this clause. The corporation maintains documents, such as statutory registers and minutes, at its registered office.
- The firm’s constitution must specify the scope of each member’s liability. This makes the members of the company’s positions and responsibilities in the event of a company dissolution clear.
- The company’s share capital amount and the partition of that capital into shares with fixed values are contained in this clause.
- Each subscriber’s full name, address, and occupation should be listed in this section, along with the subscribers to the constitution.
- The number of shares each subscriber consents to purchase with their capital contribution should also be stated.
- The company must specify the type of business it wants to run. The industry should list both the primary and supporting items.
In the Singapore company constitution, the object clause is not required. However, the company’s ability, rights, and privileges may be subject to some constitutional limitations.
For instance, a section in the Singapore company constitution might prohibit a business from engaging in risky or immoral operations like trafficking in weapons.
Factors To Consider When Drafting A Singapore Company Constitution
A new company’s constitution must be initially written by the individual who wants to start it. A company can use the Model Constitution regulations offered by the Singapore company registry or create its constitution for its operational needs.
A company’s constitution is its primary operational document; any sections left out could cause misunderstandings and problems. It is crucial to draft the constitution by company law and the company’s primary goal.
As the constitution was being written:
- The legal declaration the subscribers signed agreeing to form the firm must be included in the constitution.
- When formulating the guidelines for running the business, keep the business objective and purpose of the firm in mind.
Registration Of A Singapore Company Constitution
All businesses that wish to register as Singapore companies must submit their constitution to the Singapore Company Registrar, or ACRA, in accordance with Section 19 of the Companies Act.
You are not required to submit the model constitution for registration during the incorporation process if you decide to adopt one. When you apply for registration, you must specify whether your business is a company limited by shares or a company limited by guarantee.
At the moment the company is formed, the constitution is adopted. The designated director or secretary in the proposed company’s charter must submit a declaration to the registrar.
This declaration confirms the legitimacy of the subscribers and the individuals serving as the proposed company’s officials. It is necessary to provide this document at the time of company registration.
The Registrar reserves the right to not register the proposed Singapore company constitution if:
- The business is establishing operations that are deemed illegal, or that would disturb Singapore’s public peace and welfare; or
- The registration is against Singapore’s interests and national security.
- The corporation must maintain its bylaws at its registered office. Each subscriber must sign the constitution, indicating how many shares they have consented to accept.
The firm’s registered office makes the Singapore company constitution available for view.
Keep in mind that every company must follow these Organization Law requirements. If there is a violation, the company will be charged with an offense and given the appropriate fine.
Making Amendments To A Singapore Company Constitution
A company can use a special resolution to change its constitution. From the date the special resolution is passed, the modification will be a part of the original constitution.
Within 14 days following the resolution or any court order that modifies the constitution, the company must notify the Registrar and provide a copy of the resolution or ruling. The Registrar issued a notification and certificate of incorporation to confirm the constitutional change.
How We Can Help
The extent of the company’s operations is outlined in its charter. It serves as the company’s starting point for its operations. A Singapore company constitution must be put in place before the business can be incorporated.
The Singapore company constitution is one of the most crucial documents in the incorporation process and must be drafted carefully.
At SJH Advisory, we provide company incorporation services with the aim of equipping international business owners with the knowledge and resources they need to choose Singapore as the location for the launch or relocation of their main startup venture.
We also provide a full range of company incorporation, accounting, work visa, compliance, and tax filing services in Singapore. We offer our client high-quality and reasonably priced services with a knowledgeable team of industry veterans.
Please contact us today for a FREE consultation about our company incorporation services. Let our experts handle any inquiries or concerns you may have about setting up your business in Singapore.
Singapore Company Constitution - Frequently Asked Questions
The Singapore Company Law states that all companies must have a registered office address before establishing a new business. The address must be a commercial location and cannot be a PO Box number (residential addresses are allowed in limited circumstances).
Your company’s address for receiving official letters and legal purposes is its registered address. Your statutory records must be stored here. Since the company secretary is responsible for keeping the statutory books, their address is typically used as the registered address.
If you have a corporate office and want to use that as the registered location, you may choose to offer the company secretary a place of business there and that the statutory books and records of the company are kept there as well.
Alternatively, even with your own office as the registered address, the company’s statutory books and records can be kept at the company secretary’s office address if their firm is your company’s registered filing agent.
Business services providers like SJH Advisory can also manage your registered address on your behalf.
It only takes a day to register a new corporation because the process is computerized. The mechanics of the procedure, though (such as gathering and compiling the required documents, etc.), could extend it by a few days.
As a result, it is realistic to estimate that the total process of creating a company in Singapore can take a few days for planning purposes.
The corporate service provider you select to incorporate and run your business will bill you for their services.
A total of S$315 is required by the Accounting and Corporate Regulatory Authority (ACRA) to register a company in Singapore. This includes the S$15 name approval charge and the S$300 registration fee.
A foreigner may not necessarily need a native companion. According to local legislation, foreign nationals are permitted to own 100% of Singapore companies. Therefore, having a local partner is not necessary
However, do note that a local director is required to register a Singapore company.
Yes, Singapore provides some of the most substantial tax breaks and other benefits to companies with offices there. For more information, please refer to the Singapore Association of Trade & Commerce (ATC) website.
Yes. Each company must have a Singapore location as its registered address under Singapore Company Law. Your company’s address for receiving official letters and legal purposes is its registered address.
The address must be a commercial location and cannot be a PO Box number (residential addresses are allowed in a limited number of circumstances). Statutory records are usually kept at this location.