New corporate disclosure requirements for Singapore entities
The recent enactment of the Corporate Registers (Miscellaneous Amendments) Act, 2022 on 4 October 2022, has introduced new amendments to the Companies Act 1967 and the Limited Liability Partnerships Act 2005. These acts have now been amended to subject nominee shareholders, nominators, and individuals with “executive control” over daily or regular corporate affairs to new disclosure obligations.
This further backs up Singapore’s focus on transparency and beneficial ownership of Singapore-incorporated companies, foreign companies, and limited liability partnerships with the international standards set by the Financial Action Task Force.
What do these amendments do?
Both local and foreign companies registered in Singapore are now required to maintain a privately held register of nominee shareholders and their nominators.
If any companies cannot identify or does not have an assigned registrable controller, they will be required to name an individual with executive control as their registrable controller.
The compliance deadline for both is the 5th of December 2022. Fines for non-compliance can be issued up to SGD 5,000.
What is a controller?
Controllers are defined as individuals or legal entities who hold more than 25 percent of the shareholding or voting rights.
Previously, any entity in Singapore that could not identify a registrable controller was not required to enter a record of such information in its register of registrable controllers. This is now not the case, and all eligible companies must register a controller.
Why were these amendments introduced?
These new amendments were established in the Corporate Registers (Miscellaneous Amendments) Act 2022 and were made as the result of a public consultation conducted in July 2021. The amendments aim to align Singapore with Financial Action Task Force (FATF) standards.
What else is included in the amendment?
The new rule requiring companies to record the information about certain details of any nominee shareholders is subject to some exceptions. These exceptions mostly relate to companies listed on the Singapore stock exchange, although there is also an exemption in place for wholly owned subsidiaries of a foreign company that is a Singapore financial institution.
A nominee is defined as anyone who votes or collects dividends on behalf of the nominator. Nominees must notify the company of their status and the identity of the nominator either within 30 days of being appointed or the company’s incorporation, if incorporated after the 4th of October 2022.
The register of nominees must be kept at either the company’s registered offices or at the registered office of its appointed filing agent. The record is strictly confidential and must not be disclosed to any member of the public, including the company’s auditors.
The Act also contains other amendments setting out the timelines for Singapore companies to update their registers of nominee directors and foreign companies to update their registers of members. These changes came into force on the 30th of May 2022.
How can Belaws help?
If you have a question related to company law in Singapore, speak to one of our experts directly.
Please note that this article is for information purposes only and does not constitute legal advice.
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