There are a few key company officers you must appoint when you incorporate your Singapore business, including the company secretary and company director. A Singapore company director is in charge of running the company’s activities and determining its strategic course.
The Companies Act and common law both specify specific statutory and fiduciary obligations for a Singapore company director.
This in-depth article offers a thorough profile of a Singapore company director. It describes who is qualified, what the obligations and duties are, and how they are chosen.
Requirements For A Singapore Company Director
Under the Singapore Companies Act, each company must have at least one Singapore company director.
A director of a Singapore company must be:
- Aged at least 18.
- A Singaporean national, permanent resident of Singapore, EntrePass user, or holder of an employment pass (EP).
- Not prohibited from serving as a company director.
Meanwhile, a person cannot be a director if he or she is:
- An unqualified director from another organization.
- An undischarged bankrupt.
- An individual involved in crimes like fraud or dishonesty that carry a minimum 3-month sentence, whether in Singapore or overseas.
- A director of a business that was shut down for reasons of national security or interest.
- Any person who was found guilty of a violation of Part XII of the Securities and Futures Act on or after July 1, 2015 (Cap. 289).
- A person who, on or after July 1, 2015, is susceptible to a civil penalty under section 232 of the Securities and Futures Act.
- A person who, in addition to any other punishment given, has a disqualification order made against them.
Statutory Duties Of A Singapore Company Director
The Companies Act imposes statutory duties on directors of Singapore companies. To avoid a breach, a Singapore company director must be aware of the procedural requirements for compliance. Here are the statutory duties of a Singapore company director:
1. To keep accounting records
Every company must maintain accounting documents that show its financial stability. The Singapore company director should determine where to keep these records so that they can be easily accessible at all times.
Companies can satisfy this obligation by establishing a productive accounting and filing system. All business transactions should be recorded by the system in order to prevent discrepancies in the future.
2. To maintain annual accounts
A Singapore company director shall submit the company’s financial statements at its Annual General Meeting (AGM). The financial statements should be distributed to the shareholders at the AGM. The initial financial accounts must be presented within 18 months of incorporation.
3. To hold required meetings
A Singapore company director is required to hold the following meetings, as stated in the Singapore Companies Act:
- Statutory Meeting: Within one month and three months of the date on which operations began, every public limited company with a share capital is required to hold a general meeting known as a “statutory meeting” which is held only once.
- Annual General Meeting (AGM): The company is required to hold an AGM within six months from the company’s financial year end on a yearly basis.
- Extraordinary General Meeting (EGM): An EGM must be called by the Singapore company director no later than two months after receiving a request from members holding at least 10% of the total paid-up shares and having the ability to vote at a general meeting.
For a company without share capital, members that represent at least 10% of the firm’s voting rights must submit the request.
In the event that the Singapore company does not call the meeting after 21 days of receiving the request, the company’s members may call the meeting themselves.
4. To appoint a company secretary
A Singapore company director’s responsibility is to designate someone as a company secretary. Before appointing a secretary, the directors must confirm that the candidate possesses the necessary training, credentials, and membership in the industry.
The position of company secretary cannot be vacant for longer than six months.
5. To appoint an auditor
Within three months of the company’s incorporation in Singapore, the Singapore company director must appoint an auditor. The selected auditors will serve until the end of the company’s first AGM.
Note: Small businesses that are free from audit obligations and dormant companies do not have to fulfil this requirement.
6. To pay dividends
A company’s profits are the only source from which the dividend can be paid. The task of making sure this is the case is given to the Singapore company director.
7. To issue shares
Only after receiving shareholders’ consent at the AGM may the director of a Singapore company issue shares. Shares that are issued without shareholder consent are deemed null and void.
8. To disclose
A Singapore company director is required to disclose any financial stake in the company. A director who joins a company must disclose any membership, officership, or partnership they may have with another company, firm, or limited liability partnership.
That information is provided to the company so that it can evaluate any potential conflicts of interest the director may have in any future business dealings with the other corporate entity, company, or limited liability partnership.
When a conflict of interest between a director’s duties and interests and any position or property he or she holds arises, the director must disclose the conflict’s nature and scope before a board meeting. Additionally, the business should be notified about the conflict of interest.
Fiduciary Duties Of A Singapore Company Director
A director’s fiduciary obligations stem from the idea that they have a responsibility to put the interests of both the company and the shareholders ahead of all other interests. The following are the fiduciary obligations of a Singapore company director as established by ACRA:
1. To conduct oneself with integrity and in the company’s best interests
A Singapore company director is required to have complete loyalty to the business. Therefore, all choices should be made with the company’s interests in mind, putting aside all personal and outside interests.
2. To avoid any conflict of interest
A Singapore company director should make every effort to avoid circumstances in which their own interests conflict with those of the firm. Scenarios demonstrating conflicts of interest include:
- Joining a deal when the Singapore company director stands to gain personally while the company suffers.
- Shifting customers from the company to a rival enterprise.
- Being a director for a competitor.
3. To work diligently and carefully to perform duties
A Singapore company director must manage the firm to the best of their ability and will be judged based on the experience they bring to the table.
4. Not to take advantage of the powers vested in them or information that they are aware of
A Singapore company director is expected to only utilize the authority and knowledge granted to them by the company for the benefit of the firm.
How To Appoint A Singapore Company Director
Typically, a company names a Singapore company director either at incorporation or after the company has been established. The director’s consent form will be created by the company secretary and appointment of the director will be submitted to ACRA.
An ordinary resolution adopted at a general company meeting typically appoints a Singapore company director. However, the company’s constitution set forth the precise procedure for appointment.
The board of directors frequently has the power to name substitute or alternate directors prior to the adoption of an ordinary resolution. These directors serve until the following annual meeting and are eligible for reelection by shareholders.
Note: Companies must finish a number of forms and submit an appointment of director notice to ACRA before a director can be formally appointed.
How To File For Appointment Of Singapore Company Director With ACRA
The company can inform the company secretary to prepare a Directors’ Resolution and other necessary documents to submit an appointment of director notification online to ACRA for an incoming director.
The director is regarded as officially appointed after the appointment has been submitted to ACRA.
What Documents Are Required When Appointing A Singapore Company Director?
Here is the list of documents required for the appointment of company directors:
- A statement expressing consent to serve as a director.
- Disclosure of all other directorships and shared interests of the director.
- A duly approved appointment by board resolution that has been signed.
How We Can Help - SJH Advisory’s Company Secretarial Services
A Singapore company director must adhere to all statutory standards as set down by law for a company to operate effectively. In the event of a major violation of duty, directors may face sanctions, criminal charges, and civil lawsuits.
It is typically best practice to retain the assistance of a trusted corporate services provider that is able to advise and support the Singapore company director in carrying out their tasks in compliance with the Companies Act and any other regulations.
If you are wondering about the appointment requirement and procedure, or duties and powers of a Singapore company director, SJH Advisory can help you remain compliant with the nuances of Singapore law.
At SJH Advisory, we ensure constant conformity with statutory laws in any corporate business. Call us today to get in touch with an expert who can help you navigate the complexities of appointing a Singapore company director.
Singapore Company Director - Frequently Asked Questions
As long as a Singapore company has at least one local director (which could be a nominee director), a foreigner may serve as a company director.
Yes, Singapore allows corporations with a single director. Based on the Companies Act, a corporation is not required to have a minimum number of directors.
Similar to a business with numerous directors, a single-director company can be established and registered with ACRA. But keep in mind that it’s also necessary to have at least one local director.
As a result, a single-director firm can only have one director who is a Singaporean PR, citizen, EntrePass or Employment Pass holder.
In Singapore, a company director can also serve as the company secretary, but it is not mandatory. However, this is not possible if the company director is the sole director of the company.
The Companies Act requires a Singapore-incorporated company to appoint at least one company secretary who is a natural person and a lawful Singaporean resident.
A company secretary is in charge of keeping accurate data on the company’s financial and legal activities as well as making sure the company complies with all legislative and regulatory requirements.
When a director’s obligations are broken, there may be civil and criminal repercussions. Penalties for various offenses vary in severity.
A director may face fines of up to $5,000 or possibly up to two years in prison for minor violations. Other crimes may result in a 5-year suspension from the ability to serve as a director.
Singapore requires at least one director who lives locally. Either a permanent resident or a citizen of Singapore may qualify. That person may also be sponsored to serve as a local director on an Employment Pass work visa after a company has been incorporated.
Foreign companies that want to establish a presence in Singapore but don’t have any local residents sometimes choose a nominee director, who takes the position of the local resident director but won’t act or interfere with any of the company’s operations.