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Companies (Amendment) Bill

Bill No. 3/2003

Read the first time on 28th February 2003.
An Act to amend the Companies Act (Chapter 50 of the 1994 Revised Edition).
Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:
Short title and commencement
1.  This Act may be cited as the Companies (Amendment) Act 2003 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.
Amendment of section 4
2.  Section 4(1) of the Companies Act is amended —
(a)by inserting, immediately after the definition of “articles”, the following definition:
“ “audit requirements” means the requirements of sections 201(4) and (4A) and 207;”; and
(b)by inserting, immediately after the definition of “branch register”, the following definition:
“ “business day” means any day other than a Saturday, Sunday or public holiday;”.
Amendment of section 19
3.  Section 19(2) of the Companies Act is amended by deleting the words “an advocate and solicitor, accountant or prescribed person,” in paragraph (a) and substituting the words “a prescribed person”.
Amendment of section 61
4.  Section 61 of the Companies Act is amended by deleting the words “an advocate and solicitor, accountant or prescribed person,” in subsections (1)(b)(iii)(B) and (2)(c)(ii) and substituting in each case the words “a prescribed person”.
Amendment of section 64
5.  Section 64 of the Companies Act is amended by deleting subsection (5) and substituting the following subsection:
“(5)  This section shall apply to a public company having a share capital.”.
Amendment of section 76
6.  Section 76 of the Companies Act is amended —
(a)by deleting the words “general meeting of the company at” in subsection (10)(h) and substituting the words “date on”;
(b)by deleting the words “general meeting of the listed corporation or ultimate holding company at” in subsection (10)(h) and substituting the words “date on”; and
(c)by inserting, immediately after subsection (10), the following subsection:
“(10A)  If the resolution referred to in subsection (10)(a) or (b) is proposed to be passed by written means under section 184A, subsection (10)(f) or (g), as the case may be, shall be complied with at or before the time —
(a)agreement to the resolution is sought in accordance with section 184C; or
(b)documents referred to in section 183(3A) in respect of the resolution are served on or made accessible to members of the company in accordance with section 183(3A),
as the case may be.”.
Amendment of section 76D
7.  Section 76D of the Companies Act is amended by inserting, immediately after subsection (4), the following subsection:
“(4A)  If the special resolution referred to in subsection (2) is proposed to be passed by written means under section 184A —
(a)a person whose shares are proposed to be purchased or acquired or any of his associated persons shall not be regarded as a member having the right to vote on the resolution at a general meeting of the company for the purposes of section 184A;
(b)subsection (7) does not apply; but all documents referred to in this section shall be given to all members having the right to vote on the resolution at a general meeting for the purposes of section 184A at or before the time —
(i)agreement to the resolution is sought in accordance with section 184C; or
(ii)documents referred to in section 183(3A) in respect of the resolution are served on or made accessible to them in accordance with section 183(3A),
as the case may be.”.
New section 76DA
8.  The Companies Act is amended by inserting, immediately after section 76D, the following section:
“Contingent purchase contract
76DA.—(1)  A company may, whether or not it is listed on a securities exchange, make a purchase or acquisition of its own shares under a contingent purchase contract if the proposed contingent purchase contract is authorised in advance by a special resolution of the company.
(2)  Subject to subsection (3), the authority under subsection (1) may from time to time be varied or revoked by a special resolution of the company.
(3)  The notice specifying the intention to propose a special resolution to authorise a contingent purchase contract must specify a date on which the authority is to expire and that date must not be later than the date on which the next annual general meeting of the company is or is required by law to be held, whichever is the earlier.
(4)  The special resolution referred to in subsection (1) is invalid for the purposes of this section unless a copy of the proposed contingent purchase contract is available for inspection by members of the company —
(a)at the company’s registered office for not less than 15 days ending with the date of the meeting at which the resolution is passed; and
(b)at the meeting itself.
(5)  A company may agree to a variation of an existing contingent purchase contract so approved if, and only if, the variation is authorised, before it is agreed to, by a special resolution of the company.
(6)  Subsections (2), (3) and (4) shall apply to the authority for a proposed variation as they apply to the authority for a proposed contingent purchase contract, except that a copy of the original contract, together with any variations previously made, must also be available for inspection in accordance with subsection (4).
(7)  The company may only make an offer to enter into a contingent purchase contract in accordance with all of the following conditions:
(a)the offer must be made to every person who holds shares of the same class in the company;
(b)the number of shares that a company is obliged or entitled to purchase or acquire under the contract from any person, in relation to the total number of shares of the same class held by that person, must be of the same proportion for every person who holds shares of that class to whom the offer is made; and
(c)the terms of all offers in respect of each class of shares must be the same.
(8)  For the avoidance of doubt, the company may purchase or acquire shares under a contingent purchase contract from any person whether or not the offer to enter into the contract was originally made to him.
(9)  In this section, “contingent purchase contract” means a contract entered into by a company and relating to any of its shares —
(a)which does not amount to a contract to purchase or acquire those shares; but
(b)under which the company may (subject to any condition) become entitled or obliged to purchase or acquire those shares.”.
Amendment of section 82
9.  Section 82(2) of the Companies Act is amended by deleting the words “two days” in paragraph (b) and substituting the words “2 business days”.
Repeal and re-enactment of section 83
10.  Section 83 of the Companies Act is repealed and the following section substituted therefor:
“Substantial shareholder to notify company of change in interests
83.—(1)  Where there is a change in the percentage level of the interest or interests of a substantial shareholder in a company in voting shares in the company, the substantial shareholder shall give notice in writing to the company stating the information specified in subsection (2) within 2 business days after he becomes aware of such a change.
(2)  The information referred to in subsection (1) shall be —
(a)the name and address of the substantial shareholder;
(b)the date of the change and the circumstances leading to that change; and
(c)such other particulars as may be prescribed.
(3)  In subsection (1), “percentage level”, in relation to a substantial shareholder, means the percentage figure ascertained by expressing the aggregate of the nominal amount of the voting shares in which the substantial shareholder has an interest or interests immediately before or (as the case may be) immediately after the relevant time as a percentage of the nominal amount of —
(a)all the voting shares in the company; or
(b)where the share capital of the company is divided into 2 or more classes of shares, all the voting shares included in the class concerned,
and, if it is not a whole number, rounding that figure down to the next whole number.”.
Amendment of section 84
11.  Section 84(2) of the Companies Act is amended by deleting the words “two days” and substituting the words “2 business days”.
Amendment of section 146
12.  Section 146(1A) of the Companies Act is amended by deleting the words “an advocate and solicitor, accountant or” in paragraphs (a) and (b).
Amendment of section 148
13.  Section 148 of the Companies Act is amended by inserting, immediately after subsection (3), the following subsection:
“(4)  Any person who has been granted leave by the Court or written permission by the Official Assignee under subsection (1) shall, within one month after the issue of the Court order or written permission, lodge a copy of the order or written permission with the Registrar.”.
Amendment of section 149
14.  Section 149(8) of the Companies Act is amended by deleting the definitions of “director” and “shadow director”.
Amendment of section 149A
15.  Section 149A(5) of the Companies Act is amended by deleting the definitions of “director” and “shadow director”.
Amendment of section 153
16.  Section 153 of the Companies Act is amended by deleting subsection (6) and substituting the following subsection:
“(6)  Notwithstanding anything in this section, a person of or over the age of 70 years may, by an ordinary resolution passed at an annual general meeting of a company —
(a)be appointed or re-appointed as a director of the company to hold office; or
(b)be authorised to continue in office as a director of the company,
until the next annual general meeting of the company.”.
Amendment of section 156
17.  Section 156 of the Companies Act is amended —
(a)by deleting the word “contract” wherever it appears in subsections (1) to (4) and substituting in each case the word “transaction”;
(b)by inserting, immediately after the word “director” in subsection (8), the words “and the words “member of a director’s family” shall include his spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter”; and
(c)by deleting the word “contracts” in subsection (9) and in the marginal note and substituting in each case the word “transactions”.
New section 157A
18.  The Companies Act is amended by inserting, immediately after section 157, the following section:
“Powers of directors
157A.—(1)  The business of a company shall be managed by or under the direction of the directors.
(2)  The directors may exercise all the powers of a company except any power that this Act or the memorandum and articles of the company require the company to exercise in general meeting.”.
New section 158
19.  The Companies Act is amended by inserting, immediately above section 159, the following section:
“Disclosure of company information by certain directors
158.—(1)  A director of a company may disclose information which he has in his capacity as a director or an employee of a company, being information that would not otherwise be available to him, to the persons specified in subsection (2) if the conditions specified in subsection (3) are met.
(2)  The information referred to in subsection (1) may be disclosed to —
(a)a person whose interests the director represents; or
(b)a person in accordance with whose directions or instructions the director may be required or is accustomed to act in relation to the director’s powers and duties.
(3)  The conditions referred to in subsection (1) are —
(a)the director declares at a meeting of the directors of the company the name and office or position held by the person to whom the information is to be disclosed and the particulars of such information;
(b)the director is first authorised by the board of directors to make the disclosure; and
(c)the disclosure will not be likely to prejudice the company.
(4)  The matters declared by a director under subsection (3)(a) shall be recorded in the minutes of the meeting of the directors.”.
Amendment of section 162
20.  Section 162(1) of the Companies Act is amended by deleting paragraph (b) and substituting the following paragraph:
“(b)to provide a loan to such a director who is engaged in the full-time employment of the company or of a corporation that is deemed to be related to the company, as the case may be, for the purpose of purchasing or otherwise acquiring a home occupied or to be occupied by the director, except that not more than one such loan may be outstanding from the director at any time;”.
Amendment of section 165
21.  Section 165(2) of the Companies Act is amended by deleting the words “two days” in paragraphs (a), (b) and (c) and substituting in each case the words “2 business days”.
Amendment of section 171
22.  Section 171 of the Companies Act is amended —
(a)by deleting subsection (1A) and substituting the following subsections:
“(1A)  It shall be the duty of the directors of a company to take all reasonable steps to secure that each secretary of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company.
(1AA)  In addition, it shall be the duty of the directors of a public company to take all reasonable steps to secure that each secretary of the company is a person who —
(a)on 15th May 1987 held the office of secretary in that company and continued to hold that office on the date of commencement of the Companies (Amendment) Act 2003;
(b)for at least 3 years in the period of 5 years immediately preceding his appointment as secretary, held the office of secretary of a company;
(c)is a qualified person under the Legal Profession Act (Cap. 161), an accountant registered with the Institute of Certified Public Accountants of Singapore, a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators, or a member of such other professional association as may be prescribed; or
(d)is, by virtue of such academic or professional qualifications as may be prescribed, capable of discharging the functions of secretary of the company.
(1AB)  The Registrar may require a private company to appoint a person who satisfies subsection (1AA)(b), (c) or (d) as its secretary if he is satisfied that the company has failed to comply with any provision of this Act with respect to the keeping of any register or other record.”;
(b)by deleting the words “by virtue of his qualification under subsection (1A)” in subsection (1B);
(c)by deleting the words “an advocate and solicitor, accountant or” in subsection (1B);
(d)by deleting the words “subsection (1A)(a)” in subsection (1C) and substituting the words “subsection (1AA)(a)”; and
(e)by deleting the words “subsection (1A)(b), (c) and (d)” in subsection (1C) and substituting the words “subsection (1AA)(b), (c) and (d)”.
Amendment of section 172
23.  Section 172(2) of the Companies Act is amended —
(a)by deleting the words “except where the liability arises out of conduct involving dishonesty or a wilful breach of duty” in paragraph (a); and
(b)by deleting the words “, in relation to such liability” in paragraph (b)(ii) and substituting the words “under section 76A(13) or 391 or any other provision of this Act”.
Amendment of section 173
24.  Section 173(2) of the Companies Act is amended by deleting the words “his business occupation (if any) and” in paragraph (b).
New section 173A
25.  The Companies Act is amended by inserting, immediately above section 174, the following section:
“Interpretation of this Division
173A.—(1)  In this Division, something is “in legible form or a permitted alternative form” if, and only if, it is sent or otherwise supplied —
(a)in a form (such as a paper document) that is legible before being sent or otherwise supplied and does not change form during that process; or
(b)in another form that —
(i)is currently agreed between the company and the person as a form in which the thing may be sent or otherwise supplied to the person or to the company, as the case may be; and
(ii)is such that documents sent or supplied in that form can (where particular conditions are met) be received in legible form or be made legible following receipt in non-legible form.
(2)  In this Division, something is made accessible by a company to a member in accordance with this section if, and only if —
(a)it is published on a website;
(b)the member is notified, in the manner currently agreed between him and the company, of —
(i)its publication;
(ii)the address of the website where it is published;
(iii)the place on the website where it may be accessed; and
(iv)how to access it; and
(c)the company and the member have agreed that the member will have access to the thing on a website instead of having it sent to him in any other way.
(3)  Where a provision of this Division requires anything to be sent or otherwise supplied by a company to a member, that requirement is complied with by sending the thing to an address only if it is sent to a current address which the company has for the member.
(4)  Where a provision of this Division requires anything to be notified by a company to a member, then, without prejudice to any other means of notifying the thing to him, that requirement is complied with if the notification is sent by the company to a current address which the company has for the member.
(5)  If, in addition to the requirement in subsection (3) or (4), this Act imposes a requirement for the thing to be sent or otherwise supplied in legible form or a permitted alternative form, subsection (1) shall also apply.
(6)  For the purposes of this section and section 175A —
(a)an address of a person includes any number or address used for electronic communication;
(b)the current address which the company has for a member is an address which —
(i)has been notified by the member to the company as one at which documents may be sent to him; and
(ii)the company has no reason to believe that documents sent to the member at that address will not reach him;
(c)“electronic communication” means communication transmitted (whether from one person to another, from one device to another, from a person to a device or from a device to a person) —
(i)by means of a telecommunication system; or
(ii)by other means but while in an electronic form; and
(d)“telecommunication system” has the same meaning as in the Telecommunications Act (Cap. 323).”.
New section 175A
26.  The Companies Act is amended by inserting, immediately after section 175, the following section:
“Private company may dispense with annual general meetings
175A.—(1)  A private company may, by resolution passed in accordance with subsection (2), dispense with the holding of annual general meetings.
(2)  Notwithstanding any other provision of this Act, a resolution referred to in subsection (1) shall only be treated as passed at a general meeting if it has been passed by all of such members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy present at the meeting.
(3)  A resolution under subsection (1) has effect for the year in which it is made and subsequent years, but does not affect any liability already incurred by reason of default in holding an annual general meeting.
(4)  In any year in which an annual general meeting would be required to be held but for this section, and in which no such meeting has been held, any member of the company may, by notice to the company not later than 3 months before the end of the year, require the holding of an annual general meeting in that year.
(5)  The power of a member under subsection (4) to require the holding of an annual general meeting is exercisable not only by the giving of a notice but also by the transmission to the company at such address as may for the time being be specified for the purpose by or on behalf of the company of an electronic communication containing the requirement.
(6)  If such a notice is given or electronic communication is transmitted, section 175(1) and (4) shall apply with respect to the calling of the meeting and the consequences of default.
(7)  A resolution referred to in subsection (1) shall cease to be in force if the company is converted to a public company.
(8)  If the resolution referred to in subsection (1) ceases to be in force, the company shall not be obliged under section 175 to hold an annual general meeting in that year if, at the time the resolution ceases to have effect, less than 3 months of the year remains.
(9)  Subsection (8) does not affect any obligation of the company to hold an annual general meeting in that year in pursuance of a notice given under subsection (4) or an electronic communication transmitted under subsection (5).
(10)  Unless the contrary intention appears —
(a)a reference in any provision of this Act to the doing of anything at an annual general meeting shall, in the case of a company that has dispensed with holding an annual general meeting in accordance with this section, be read as a reference to the doing of that thing by way of a resolution by written means under section 184A; and
(b)a reference in any provision of this Act to the date or conclusion of an annual general meeting of a company that has dispensed with holding an annual general meeting in accordance with this section shall, unless the meeting is held, be read as a reference to the date of expiry of the period within which the meeting is required by law to be held.”.
Amendment of section 183
27.  Section 183 of the Companies Act is amended —
(a)by deleting the words “in writing” in subsection (1);
(b)by inserting, immediately after the word “meeting” in the last line of subsection (1)(a), the words “or (if the resolution is proposed to be passed by written means under section 184A) for which agreement is sought”;
(c)by deleting subsection (3) and substituting the following subsections:
“(3)  Subject to subsection (3A), notice of a resolution referred to in subsection (1) shall be given, and any statement so referred to shall be circulated, to members of the company entitled to have notice of the meeting sent to them by serving on each member, in any manner permitted for service of the notice of the meeting, a copy of the resolution and statement.
(3A)  Where the resolution is proposed to be passed by written means under section 184A, the notice of the resolution and statement shall be given and circulated to members of the company entitled to have notice of the meeting sent to them by serving on each member in legible form or a permitted alternative form, or by making accessible to the member in accordance with section 173A —
(a)a copy of the resolution and statement; and
(b)a notification that formal agreement to the resolution is being sought under section 184A.
(3B)  Notice of the resolution shall be given to any other member of the company by serving on him notice of the general effect of the resolution in any manner permitted for giving him notice of meetings of the company.
(3C)  Except where the resolution is proposed to be passed by written means under section 184A, the copy of the resolution referred to in subsection (3) shall be served, or notice of the general effect of the resolution referred to in subsection (3B) shall be given, as the case may be, in the same manner and, so far as practicable, at the same time as notice of the meeting and, where it is not practicable for it to be served or given at that time, it shall be served or given as soon as practicable thereafter.”;
(d)by deleting the words “A company” in subsection (4) and substituting the words “Subject to subsection (4A), a company”; and
(e)by inserting, immediately after subsection (4), the following subsections:
“(4A)  A company shall not be bound under this section to give notice of any resolution which is proposed to be passed by written means under section 184A, or to circulate any statement relating thereto, unless —
(a)the requisition setting out the text of the resolution and the statement is received by a director of the company in legible form or a permitted alternative form; and
(b)the notice states that formal agreement to the resolution is sought under section 184A.
(4B)  Where the requisition under subsection (4A)(a) requests that the date of its receipt by a company be notified to a specified person, the directors shall, without delay after it is first received by a director in legible form or a permitted alternative form, notify that person of the date when it was first so received.”.
Amendment of section 184
28.  Section 184 of the Companies Act is amended —
(a)by deleting subsection (1) and substituting the following subsection:
“(1)  A resolution shall be a special resolution when it has been passed by a majority of not less than three-fourths of such members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy present at a general meeting of which —
(a)in the case of a private company, not less than 14 days’ written notice; or
(b)in the case of a public company, not less than 21 days’ written notice,
specifying the intention to propose the resolution as a special resolution has been duly given.”; and
(b)by deleting the words “less than 21 days’ written notice” in subsection (2) and substituting the words “written notice of a period less than that required under subsection (1)”.
New sections 184A to 184F
29.  The Companies Act is amended by inserting, immediately after section 184, the following sections:
“Passing of resolutions by written means
184A.—(1)  Notwithstanding any other provision of this Act, a private company may pass any resolution by written means in accordance with the provisions of this section and sections 184B to 184F.
(2)  Subsection (1) shall not apply to a resolution referred to in section 175A(1) or a resolution for which special notice is required.
(3)  A special resolution is passed by written means if the resolution indicates that it is a special resolution and if it has been formally agreed on any date by one or more members of the company who on that date represent —
(a)at least 75%; or
(b)if the memorandum or articles of the company require a greater majority for that resolution, that greater majority,
of the total voting rights of all the members who on that date would have the right to vote on that resolution at a general meeting of the company.
(4)  An ordinary resolution is passed by written means if the resolution does not indicate that it is a special resolution and if it has been formally agreed on any date by one or more members of the company who on that date represent —
(a)a majority; or
(b)if the memorandum or articles of the company require a greater majority for that resolution, that greater majority,
of the total voting rights of all the members who on that date would have the right to vote on that resolution at a general meeting of the company.
(5)  For the purposes of this section, a resolution of a company is formally agreed by a member if —
(a)the company receives from the member (or his proxy if this is allowed) a document that —
(i)is given to the company in legible form or a permitted alternative form;
(ii)indicates the member’s agreement (or agreement on his behalf) to the resolution; and
(iii)includes the text of the resolution or otherwise makes clear that it is that resolution that is being agreed to; and
(b)the member (or his proxy) had a legible text of the resolution before giving that document.
(6)  Nothing in subsection (3) or (4) shall be construed as requiring the requisite number of members to formally agree to the resolution on a single day.
(7)  Any reference in this Act or any other law to the passing or making of a resolution, or the passing or making of a resolution at a meeting, includes a reference to the passing of the resolution by written means in accordance with this section.
(8)  Any reference in this Act or any other law to the doing of anything at a general meeting of a company includes a reference to the passing of a resolution authorising the doing of that thing by written means in accordance with this section.
Requirements for passing of resolutions by written means
184B.—(1)  A resolution of a private company may only be passed by written means if —
(a)either —
(i)agreement to the resolution was first sought by the directors of the company in accordance with section 184C; or
(ii)a requisition for that resolution was first given to the company in accordance with section 183 and, by reason of that notice, the documents referred to in section 183(3A) in respect of the resolution were served on or made accessible to members of the company in accordance with section 183(3A);
(b)the memorandum and articles of the company do not prohibit the passing of resolutions (either generally or for the purpose in question) by written means; and
(c)all conditions in the company’s memorandum and articles relating to the passing of the resolution by written means are met.
(2)  Any resolution that is passed in contravention of subsection (1) shall be invalid.
Where directors seek agreement to resolution by written means
184C.—(1)  The directors of a private company who wish to seek agreement to a resolution of the company and for it to be passed by written means shall —
(a)send to each member having the right to vote on that resolution at a general meeting a copy of the text of the resolution in legible form or a permitted alternative form; or
(b)make that text accessible to that member in accordance with section 173A.
(2)  As far as practicable, the directors shall comply with subsection (1) as respects every member at the same time and without delay.
(3)  Without prejudice to any other means of complying with subsections (1) and (2), the directors shall have complied with those subsections if they secure that the same paper document containing the text of the resolution is sent without delay to each member in turn.
(4)  Subject to section 184D, if the resolution is passed before the directors have complied with subsection (1) as respects every member, that fact shall not affect the validity of the resolution or any obligation already incurred by the directors under subsections (1) and (2).
Members may require general meeting for resolution
184D.—(1)  Any member or members of a private company representing at least 5% of the total voting rights of all the members having the right to vote on a resolution at a general meeting of the company may, within 7 days after —
(a)the text of the resolution has been sent or made accessible to him or them in accordance with section 184C; or
(b)the documents referred to in section 183(3A) in respect of the resolution have been served on or made accessible to him or them in accordance with section 183(3A),
as the case may be, give notice to the company requiring that a general meeting be convened for that resolution.
(2)  Where notice is given under subsection (1) —
(a)the resolution is invalid even though it may have in the meantime been passed in accordance with section 184A; and
(b)the directors shall proceed to convene a general meeting for the resolution.
Company’s duty to notify members that resolution passed by written means
184E.—(1)  Where a resolution of a private company is passed by written means, the company shall —
(a)notify every member that it has been passed; and
(b)do so within 15 days from the earliest date on which a director or secretary of the company is aware that it has been passed.
(2)  Non-compliance with this section shall not render the resolution invalid.
Recording of resolutions passed by written means
184F.—(1)  Where a resolution of a private company is passed by written means, the company shall cause a record of the resolution, and the indication of each member’s agreement (or agreement on his behalf) to it, to be entered in a book in the same way as minutes of proceedings of a general meeting of the company.
(2)  Non-compliance with subsection (1) shall not render the resolution invalid.
(3)  Any such record, if purporting to be signed by a director or the secretary of the company, is evidence of the proceedings in passing the resolution.
(4)  Where a record is made in accordance with this section, then, until the contrary is proved, the requirements of this Act with respect to those proceedings shall be deemed to have been complied with.
(5)  Section 189 applies in relation to a record made in accordance with this section as it applies in relation to minutes of proceedings of a general meeting.”.
Amendment of section 186
30.  Section 186 of the Companies Act is amended —
(a)by deleting the words “or agreement” in subsections (1)(b) and (2); and
(b)by deleting the words “and agreements” in the marginal note.
Amendment of section 201A
31.  Section 201A(1) of the Companies Act is amended —
(a)by deleting the words “audited accounts” and substituting the words “accounts or (where the subsidiary is not exempt from audit requirements under section 205B or 205C) audited accounts”; and
(b)by inserting, immediately after the word “and”, the words “(unless the subsidiary is exempt from audit requirements under section 205B or 205C)”.
New section 201C
32.  The Companies Act is amended by inserting, immediately after section 201B, the following section:
“Directors need not lay accounts before company if resolution under section 175A in force
201C.  Subject to section 203(1), while a resolution by a private company under section 175A is in force —
(a)the directors of the company need not comply with the requirement in section 201 to lay before the company at its annual general meeting accounts or consolidated accounts of the company; and
(b)the reference in section 207(1) to accounts required to be laid before the company in general meeting shall be read as a reference to the documents required to be sent to persons entitled to receive notice of general meetings of the company under section 203(1).”.
Amendment of section 203
33.  Section 203 of the Companies Act is amended —
(a)by deleting subsection (1) and substituting the following subsection:
“(1)  A copy of every profit and loss account and balance-sheet of a company or, in the case of a holding company, a copy of the consolidated accounts and balance-sheet (including every document required by law to be attached thereto), which is duly audited and which (or which, but for section 201C) is to be laid before the company in general meeting accompanied by a copy of the auditor’s report thereon shall —
(a)not less than 14 days before the date of the meeting; or
(b)if a resolution under section 175A is in force, not less than 28 days before the end of the period allowed for the laying of those documents,
be sent to all persons entitled to receive notice of general meetings of the company.”; and
(b)by inserting, immediately after subsection (3), the following subsections:
“(4)  In a case referred to in subsection (1)(b), any member or auditor of the company may, by notice to the company not later than 28 days from the day on which the documents referred to in subsection (1) were sent out, require that a general meeting be held for the purpose of laying those documents before the company.
(5)  Section 175A(5) shall apply, with the necessary modifications, to the giving of a notice under subsection (4).
(6)  The directors of the company shall, within 21 days from the date of giving of the notice referred to in subsection (4), convene a meeting for the purpose referred to in that subsection.
(7)  If default is made in convening the meeting under subsection (6) —
(a)each director in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000; and
(b)the Court may, on application of the member or auditor, order a general meeting to be called.”.
Amendment of section 205
34.  The Companies Act is amended by inserting, immediately after subsection (12), the following subsection:
“(12A)  Where a resolution under section 175A is in force and the auditor or auditors of the company is or are to be appointed by a resolution by written means under section 184A by virtue of section 175A(10), references in subsections (11) and (12) to the date of an annual general meeting shall be read as references to the time —
(a)agreement to that resolution is sought in accordance with section 184C; or
(b)documents referred to in section 183(3A) in respect of the resolution are served or made accessible in accordance with section 183(3A),
as the case may be.”.
New sections 205A to 205D
35.  The Companies Act is amended by inserting, immediately after section 205, the following sections:
“Certain companies exempt from obligation to appoint auditors
205A.—(1)  Notwithstanding section 205, a company which is exempt from audit requirements under section 205B or 205C, and its directors shall be exempt from section 205(1) or (2), as the case may be.
(2)  Where a company ceases to be so exempt, the company shall appoint a person or persons to be auditor or auditors of the company at any time before the next annual general meeting; and the auditors so appointed shall hold office until the conclusion of that meeting.
(3)  If default is made in complying with subsection (2), the company and every director of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000.
Dormant company exempt from audit requirements
205B.—(1)  A company shall be exempt from audit requirements if —
(a)it has been dormant from the time of its formation; or
(b)it has been dormant since the end of the previous financial year.
(2)  A company is dormant during a period in which no accounting transaction occurs; and the company ceases to be dormant on the occurrence of such a transaction.
(3)  For the purpose of subsection (2), there shall be disregarded transactions of a company arising from any of the following:
(a)the taking of shares in the company by a subscriber to the memorandum in pursuance of an undertaking of his in the memorandum;
(b)the appointment of a secretary of the company under section 171;
(c)the appointment of an auditor under section 205;
(d)the maintenance of a registered office under sections 142, 143 and 144;
(e)the keeping of registers and books under sections 88, 131, 173, 189 and 191;
(f)the payment of any fee specified in the Second Schedule or an amount of any fine or default penalty paid to the Registrar under section 409(4);
(g)such other matter as may be prescribed.
(4)  Where a company is, at the end of a financial year, exempt from audit requirements under subsection (1) —
(a)the copies of the profit and loss accounts and balance-sheet, or consolidated accounts and balance-sheet of the company to be sent under section 203 need not be audited;
(b)section 203 has effect with the omission of any reference to the auditor’s report or a copy of the report;
(c)copies of an auditor’s report need not be laid before the company in a general meeting; and
(d)the annual return of the company to be lodged with the Registrar shall be accompanied by a statement by the directors —
(i)that the company is a company referred to in subsection (1)(a) or (b) as at the end of the financial year;
(ii)that no notice has been received under subsection (6) in relation to that financial year; and
(iii)as to whether the accounting and other records required by this Act to be kept by the company have been kept in accordance with section 199.
(5)  Where a company which is exempt from audit requirements under subsection (1) ceases to be dormant, it shall thereupon cease to be so exempt; but it shall remain so exempt in relation to accounts for the financial year in which it was dormant throughout.
(6)  Any member or members holding in the aggregate not less than 5% in nominal value of a company’s issued share capital or any class of it or, if the company does not have a share capital, not less than 5% in number of the members of the company may, by notice in writing to the company during a financial year but not later than one month before the end of that year, require the company to obtain an audit of its accounts for that year.
(7)  Where a notice is given under subsection (6), the company is not entitled to the exemption under subsection (1) in respect of the financial year to which the notice relates.
(8)  In this section, “accounting transaction” means a transaction the accounting or other record of which is required to be kept under section 199(1).
Exempt private company exempt from audit requirements
205C.—(1)  An exempt private company shall be exempt from audit requirements in respect of a financial year if its revenue in that year does not exceed the prescribed amount.
(2)  For a period which is an exempt private company’s financial year but is less than 12 calendar months, the prescribed amount shall be proportionately adjusted.
(3)  Section 205B(4), (6) and (7) shall apply, with the necessary modifications, to an exempt private company so exempt.
(4)  In this section —
“prescribed amount” means the amount prescribed by the Minister for the purposes of this section;
“revenue” has the meaning given to that word in the Accounting Standards, subject to such modifications as the Minister may prescribe.
Registrar may require company exempt from audit requirements to lodge audited accounts
205D.  Notwithstanding sections 205B and 205C, the Registrar may, if he is satisfied that there has been a breach of any provision of section 199 or 201 or that it is otherwise in the public interest to do so, by notice in writing to a company exempt under either of those sections, require that company to lodge with him, within such time as may be specified in that notice —
(a)its accounts duly audited by the auditor or auditors of the company or, where none has been appointed, an auditor or auditors to be appointed by the directors of the company for this purpose; and
(b)an auditor’s report referred to in section 207 in relation to those accounts prepared by the auditor or auditors of the company.”.
Amendment of section 215
36.  Section 215 of the Companies Act is amended —
(a)by deleting the words “, or by a nominee for, the transferee company or its subsidiary” in subsections (1) and (3) and substituting in each case the words “the transferee company”; and
(b)by inserting, immediately after subsection (8), the following subsections:
“(9)  For the purposes of this section, shares held or acquired —
(a)by a nominee on behalf of the transferee company; or
(b)by a related corporation of the transferee company or by a nominee of that related corporation,
shall be treated as held or acquired by the transferee company.
(10)  The reference in subsection (1) to shares already held by the transferee company includes a reference to shares which the transferee company has contracted to acquire but that shall not be construed as including shares which are the subject of a contract binding the holder thereof to accept the offer when it is made, being a contract entered into by the holder for no consideration and under seal or for no consideration other than a promise by the transferee company to make the offer.
(11)  Where, during the period within which an offer for the transfer of shares to the transferee company can be approved, the transferee company acquires or contracts to acquire any of the shares whose transfer is involved but otherwise than by virtue of the approval of the offer, then, if —
(a)the consideration for which the shares are acquired or contracted to be acquired (referred to in this subsection as the acquisition consideration) does not at that time exceed the consideration specified in the terms of the offer; or
(b)those terms are subsequently revised so that when the revision is announced the acquisition consideration, at the time referred to in paragraph (a), no longer exceeds the consideration specified in those terms,
the transferee company shall be treated for the purposes of this section as having acquired or contracted to acquire those shares by virtue of the approval of the offer.”.
Repeal of Division 1 of Part XI
37.  Division 1 of Part XI of the Companies Act is repealed.
Amendment of section 366
38.  Section 366 of the Companies Act is amended —
(a)by deleting the words “establishing or using a share transfer or share registration office or” in the definition of “carrying on business” in subsection (1); and
(b)by deleting the words “in order to become a listed corporation” in subsection (2)(j).
Amendment of section 372
39.  Section 372(3) of the Companies Act is amended by inserting, immediately after the words “within one month”, the words “or within such further period as the Registrar in special circumstances allows”.
Amendment of section 391
40.  Section 391 of the Companies Act is amended by inserting, immediately after subsection (1), the following subsection:
“(1A)  For the avoidance of doubt and without prejudice to the generality of subsection (1), “liability” includes the liability of a person to whom this section applies to account for profits made or received.”.
Amendment of Fourth Schedule
41.  The Fourth Schedule to the Companies Act is amended by deleting paragraph 73 and substituting the following paragraph:
“73.—(1)  The business of a company shall be managed by or under the direction of the directors.
(2)  The directors may exercise all the powers of a company except any power that this Act or the memorandum and articles of the company require the company to exercise in general meeting.”.
Miscellaneous amendments
42.  The Companies Act is amended —
(a)by inserting, immediately after “76D” in the following provisions, “, 76DA”:
sections 76B(3)(a), (3B)(a), (8) and (9)(c), 76F(1)(a) and 76G(1);
(b)by deleting the words “section 76D” in section 76C(6) and substituting the words “sections 76D and 76DA”; and
(c)by inserting, immediately after the words “section 76D” in section 76F(1)(b) and (c), the words “or 76DA”.
Consequential amendments to written laws
43.  The Minister may, by order published in the Gazette, repeal or amend any provision of the Companies Act or other written law which appears to him unnecessary having regard to the provisions of this Act or to be inconsistent with any provision of this Act.
Transitional and savings provisions
44.—(1)  Sections 31 and 35 shall not apply to a company in respect of a financial year which commences before the date of commencement of those provisions, and section 201A of the Companies Act in force immediately before that date shall continue to apply to that company in respect of that financial year.
(2)  The Minister may, by regulations, prescribe such other transitional, savings and other consequential provisions as he may consider necessary or expedient.
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Last updated on 25 Jan 2021