MOF and ACRA invite public opinion on changes to the Companies Act

MOF and ACRA invite public opinion on changes to the Companies Act

SINGAPORE - The Ministry of Finance (MOF) and and the Accounting and Corporate Regulatory Authority (ACRA) will be conducting a public consultation exercise from Oct 23 to Nov 19 on the second draft of the Companies (Amendment) Bill.

This is part of the ongoing review of the Companies Act where the first draft was sought earlier in May 2013. The first draft set out the proposed legislative amendments to the Act with recommendations made by the Steering Committee for the Review of the Companies Act that were approved by MOF on Oct 3.

The second part of the draft seeks public opinion on area relating to foreign companies and other aspects of the Companies Act.

In 2011, a public consultation was done on 40 recommendations on the regulatory framework for foreign companies. After evaluating the public feedback, 32 recommendations were retained and seven were modified.

Two key recommendations are for foreign companies on their disclosure requirements and accountability during financial reporting, as well as to introduce a new criteria to strike off operations.

In other aspects of the act, public feedback is sought on the legislative amendments pertaining to the simplification of filing and regulatory processes, and the enhancement of the ability of the Registrar of Companies to hold non-compliant companies, directors and company secretaries more accountable.

Some key changes proposed:

1. Enhancing the Registrar powers to rectify errors in the register;

2. Enhancing the circumstances for when the Registrar may determine that a company is not carrying on business and may be struck off ; and

3. Introducing powers to allow the Registrar to debar any director or company secretary of a company in default of lodgement obligations from taking on any new appointment as a director or company secretary.

MOF and ACRA are also seeking public opinion on the following three new areas:

1. Liberalising the share buyback limit in the Companies Act to allow a Singapore-incorporated company to have greater flexibility in buying back its shares;

2. Issues relating to priority payment to an employee of an insolvent company, in response to suggestions that the salary cap for priority payment should be updated; and 3. Phasing out the transitional arrangement under section 66 of the Companies Act for bearers of share warrants issued prior to Dec 29, 1967 which allows bearers of share warrants to surrender the share warrants, and have their names entered into the company register as registered members.

Feedback is also being sought on appropriate methods for phasing out any outstanding share warrants.

The public can access the consultation documents on MOF's website (www.mof.gov.sg), ACRA's website (www.acra.gov.sg) and the REACH consultation portal (www.reach.gov.sg). Respondents may also send their written comments to the Ministry of Finance directly.

wjeanne@sph.com.sg

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