SINGAPORE - After four years of comprehensive review and public consultation, the announced changes to the Companies Act (the Act) come with wide-ranging tweaks. The majority of the 217 changes, put forth by the Steering Committee for Review of the Companies Act (Steering Committee), were accepted by the Ministry of Finance (MOF).
Targeted to be effective in 2013, the amended legislation is intended to keep it current and to sustain an environment that remains attractive for business and better maintain Singapore's position as a global business hub.
These are the largest number of changes to the Act since it was enacted in 1967. We look at what the changes may imply for businesses, in particular, in areas related to shareholders' rights, corporate governance, cost and flexibility and audit.
One key change is to give CPF investors full access to their shareholders' rights, similar to cash investors. Unlike the case at present, investors using CPF monies will in future be able to exercise voting rights similar to cash investors, such as the ability to vote at company meetings.
This will enfranchise such investors significantly. They will do so through a new "multiple proxies" approach which is in turn another key amendment. For investors who are beneficial owners of shares held indirectly via nominee or custodian institutions, such as the CPF investors, the new multiple-proxies approach will allow more of them to participate in shareholders' voting through a show of hands.