Singapore Companies Act Updates: What You Need to Know About the Latest Changes to Compliance Requirements
The Singapore Companies Act is a comprehensive legislation that governs the incorporation, operation, and winding up of companies in Singapore. The Act is regularly reviewed and updated to ensure that it remains relevant and effective in promoting corporate governance, transparency, and accountability. In recent years, there have been several significant updates to the Companies Act, which have introduced new compliance requirements for companies registered in Singapore. In this article, we will summarize the key changes and what you need to know to ensure compliance.
New Requirements for Company Secretaries
One of the most significant updates to the Companies Act is the introduction of new requirements for company secretaries. Effective January 1, 2020, company secretaries are now required to be qualified or have relevant experience in company secretarial work. This change aims to enhance the professionalism and expertise of company secretaries, who play a critical role in ensuring compliance with corporate governance requirements.
Company secretaries must also undergo continuing professional development (CPD) to stay up-to-date with changes in the law and best practices. The CPD requirements include a minimum of 15 hours of training per year, which can be fulfilled through various means such as attending seminars, workshops, and online courses.
New Requirements for Directors
Another key update to the Companies Act is the introduction of new requirements for directors. Effective July 1, 2020, directors are now required to disclose their interests in the company’s assets, including shares, loans, and other financial interests. This change aims to enhance transparency and accountability by ensuring that directors are aware of potential conflicts of interest and take steps to mitigate them.
Directors are also required to undergo CPD to stay up-to-date with changes in the law and best practices. The CPD requirements include a minimum of 15 hours of training per year, which can be fulfilled through various means such as attending seminars, workshops, and online courses.
New Requirements for Financial Reporting
The Companies Act has also introduced new requirements for financial reporting. Effective January 1, 2020, companies are now required to prepare and submit financial statements in accordance with the Singapore Financial Reporting Standards (SFRS). This change aims to enhance the transparency and accuracy of financial reporting, which is critical for investors, creditors, and other stakeholders.
Companies must also prepare and submit a directors’ report, which provides an overview of the company’s performance and position. The directors’ report must include information on the company’s financial performance, business activities, and risk management practices.
New Requirements for Audit and Assurance
The Companies Act has also introduced new requirements for audit and assurance. Effective January 1, 2020, companies are now required to engage an independent auditor to conduct an audit of their financial statements. This change aims to enhance the transparency and accuracy of financial reporting, which is critical for investors, creditors, and other stakeholders.
Auditors must also undergo CPD to stay up-to-date with changes in the law and best practices. The CPD requirements include a minimum of 15 hours of training per year, which can be fulfilled through various means such as attending seminars, workshops, and online courses.
Conclusion
The Singapore Companies Act is a comprehensive legislation that governs the incorporation, operation, and winding up of companies in Singapore. The Act is regularly reviewed and updated to ensure that it remains relevant and effective in promoting corporate governance, transparency, and accountability. The latest updates to the Companies Act introduce new compliance requirements for company secretaries, directors, financial reporting, and audit and assurance. It is essential for companies registered in Singapore to understand these changes and ensure compliance to avoid penalties and reputational damage.
FAQs
- Q: What are the new requirements for company secretaries? A: Company secretaries must be qualified or have relevant experience in company secretarial work and undergo continuing professional development (CPD) to stay up-to-date with changes in the law and best practices.
- Q: What are the new requirements for directors? A: Directors must disclose their interests in the company’s assets, including shares, loans, and other financial interests, and undergo CPD to stay up-to-date with changes in the law and best practices.
- Q: What are the new requirements for financial reporting? A: Companies must prepare and submit financial statements in accordance with the Singapore Financial Reporting Standards (SFRS) and a directors’ report, which provides an overview of the company’s performance and position.
- Q: What are the new requirements for audit and assurance? A: Companies must engage an independent auditor to conduct an audit of their financial statements, and auditors must undergo CPD to stay up-to-date with changes in the law and best practices.
- Q: What are the penalties for non-compliance with the new requirements? A: Companies that fail to comply with the new requirements may be subject to penalties, fines, and reputational damage.
