New obligation in Singapore to keep company registers
Earlier this year, the Companies Act (Cap. 50) was amended in line with the Financial Action Task Force Guidelines to, inter alia, “make the ownership and control of business entities more transparent and thus reduce opportunities for the misuse of corporate entities for illicit purposes”.
To this end, the Companies (Register of Controllers and Nominee Directors) Regulations 2017 were implemented. The particular focus is on three new registers which must be maintained under the new provisions. Certain entities are exempted from the requirement to maintain the register, including public companies listed in Singapore, Singapore financial institutions, and companies listed outside Singapore and which are subject to regulatory disclosure requirements and adequate transparency requirements in respect of their beneficial owners.
A summary table and brief descriptions of each of the registers are set out below:
|Register of nominee directors||Register of controllers||Register of members|
|Whether private companies obliged to maintain||Yes||Yes||No|
|Whether branches of foreign companies obliged to maintain||No||Yes||Yes|
|Main section(s) of Companies Act (Cap. 50)||Sections 386AA to 386AP (excluding Sections 386AF and 386AN)||Sections 386AA to 386AP (excluding Section 386AL)||Sections 379 to 384|
|Whether available to the public||No||No||Yes|
Apart from the company/foreign company itself, the obligation to comply with the requirements is broad reaching, and may, in some circumstances, extend to every officer of the company who knows or ought reasonably to know that a register is not up to date or otherwise inaccurate.
Failure to comply with the provisions in Part XIA in most instances constitutes a criminal offence and the offender may be liable to a fine of up to SGD 5,000.
Register of controllers
Save for exempted classes of entities, Singapore private companies and foreign companies with a Singapore branch are obliged to take reasonable steps to identify their registrable controllers and maintain a register of these controllers, who are described as individuals or entities with “significant interest” in or “significant control” over the company or foreign company (for ease of reference, both shall be referred to in this section as the company).
Briefly, the threshold for “significant interest” is where the person/entity has an interest more than 25% of the shares or voting rights in the company. The test for “significant control” is where the person/entity (a) holds the right to appoint or remove the directors; (b) holds more than 25% of the voting rights; or (c) has the right to exercise (or actually exercises) significant influence or control over the company. As one may expect, the significant interest test will be easier to apply in practice than the significant control test.
For newly incorporated companies or newly registered branches (after 31 March 2017), the register of controllers must be set up within thirty (30) days of incorporation/registration.
Register of nominee directors
Save for exempted classes of entities, all Singapore private companies must additionally maintain a register of nominee directors. A director is a nominee if he is accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of any other person. Shareholders who appoint their representatives to the board will generally have to be entered in the register as a nominator.
Register of members
Foreign companies registered in Singapore are obliged to maintain public registers of their members and lodge a notice with Accounting and Corporate Regulatory Authority (ACRA) specifying the address at which the register of members is kept.
While this is a new requirement for branches of foreign companies, it aligns the position of foreign companies with locally incorporated public companies, who are currently obliged to maintain such a register.
Please note that the above is a general overview of the additional obligations to maintain registers arising out of the amendment to the Companies Act. For more detailed information, please do not hesitate to contact us.
 Senior Minister of State for Finance and Law Indranee Rajah