The Companies, Business Trusts & Other Bodies (Miscellaneous Amendments) Bill was passed by Parliament on 9 May 2023. The amendments, which came into effect on 1 July 2023, aim to promote a more pro-business environment whilst upholding market confidence and safeguarding public interest.
The Act amends the Companies Act 1967 (CA) and other legislation to enable the conduct of virtual or hybrid meetings for companies, business trusts, variable capital companies and the Singapore Labour Foundation. Other amendments are to facilitate digitalisation, improve ease of doing business and strengthen the regulatory framework.
The key amendments are as follows:
- Provide companies with clarity and flexibility in holding fully virtual and hybrid company meetings, while ensuring that shareholders’ rights are upheld. The Bill also amends the Business Trusts Act 2004, the Variable Capital Companies Act 2018 and the Singapore Labour Foundation Act 1977 to permanently provide business trusts, variable capital companies and the Singapore Labour Foundation with the option to conduct fully virtual or hybrid meetings, consistent with amendments that have been made to the CA.
- Require companies to accept proxy instructions given electronically instead of leaving this to be stipulated in the company’s constitution.
- Allow relevant intermediaries to appoint multiple proxies to attend and vote at schemes of arrangement meetings.
- Reduce the disqualification period for first-time disqualified directors from five years to three years to better reflect the culpability of the director and empower the Registrar to grant disqualified directors the permission to act as director.
- Provide greater protection to minority shareholders with the revised manner of computing the threshold required for compulsory acquisition of shares.
- Increase maximum penalties imposed for offences relating to not having true and fair financial statements in compliance with the Accounting Standards in Singapore.
Also, with effect from 1 July, the Accounting & Corporate Regulatory Authority (ACRA) implemented the requirements under the Accountants (Amendments) Act, which was passed by Parliament in October last year.
The amendments seek to enhance ACRA’s audit regulatory regime and ensure that high audit quality standards are upheld by public accounting entities (PAEs) and public accountants (PAs).
The key new requirements are as follows:
- Allow ACRA to conduct statutory Quality Control inspections on PAEs and to mandate remediation of lapses or to impose sanctions on PAEs for non-compliances.
- Specify ACRA’s powers to conduct Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) inspections on PAEs or PAs and to impose sanctions if they fail to comply with these requirements.
- Introduce a tiered assessment framework – ‘Satisfactory’, ‘Satisfactory but with Findings’, ‘Partially Satisfactory’ and ‘Not Satisfactory’ – for inspections conducted on individual PAs’ audit work under the Practice Monitoring Programme and Quality Control inspections.
- Allow ACRA to compel a PA who has obtained a ‘Not Satisfactory’ inspection outcome under the Practice Monitoring Programme to disclose the PA’s audit inspection findings to the audited entity.
Staying compliant with regulatory updates is a critical aspect of running a successful and reputable business. You should not let regulatory changes overwhelm you or expose your company to unnecessary risks.
At Sovereign, our team of professionals works closely with client companies to keep them in compliance. Contact us today to discuss how these changes could affect your business and how we can support you.