incorporating a company in singapore

Commercial Practice:Incorporation of Companies

FORMING BUSINESS STRUCTURES IN SINGAPORE

Companies (Amendment) Act 2005• Came into effect 30 Jan 2006• Amendments include abolishing the concept of par value and authorised share capital;

liberalising financial assistance restrictions on share acquisitions; permitting share buy-backs out of capital or distributable profits; permitting capital reduction without court order; introducing treasury shares; introducing statutory form of merger or amalgamation of companies.

A. TYPES OF BUSINESS ENTITIES IN SINGAPORE

• Business firm o Sole proprietorshipo Partnership

• LLP • Company

o Limited companies can be private companies or public companies. • Local branch of a foreign company

Company

Limited Company Unlimited Company

Private company Public Company

Private exempt company Regular company Listed company Unlisted company

B. THE COMPANY

a. The Auditors

• Company incorporated in Singapore is required to appoint an auditor and to prepare audited accounts for each of its financial years.

• A company exempt from audit requirements for any financial year need not appoint an auditor for that year.

• Nevertheless, shareholders holding at least 5% the total number of issued shares of the company or who form at least 5% of the total number of members of the company (excluding the company itself if it is registered as a member) may require the company to audit its accounts.

• ACRA also has the power to require any exempted company to prepare and submit audited accounts.

• If during the financial year, a company ceases to be dormant, or if the revenue of an exempt private company exceeds the prescribed amount, it must appoint an auditor.

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b. The Decision Making Process

Meetings• Previously, all companies (whether private or public) were to hold AGM. However, private

companies may dispense with holding an AGM for any year if its shareholders unanimously vote in agreement for such dispensation. This dispensation is effective for that year and for successive years.

• However, any shareholder may, by notice to the company not later than 3 months before the end of the year, require the holding of an AGM in that year.

Written resolution in lieu of face-to-face meetings• Written resolutions can be circulated to the shareholders for approval in lieu of general

meetings. The annual accounts of the company must also be sent to the shareholders.

c. Fund-raising

• Former prohibition against private companies raising funds from the public has been removed from the Companies Act.

• Ss 272A and 272B of the Securities and Futures Act exempts small offers to the public or certain types of private placement from prospectus requirements.

d. The Exempt Private Company

• Definition: one where none of the shareholders (legal and/or beneficial) is a company (i.e. they are all individuals) and there are not more than 20 shareholders.

• Advantages:o Exempted from audit requirements for financial year commencing on or after 1 June

2004 if its revenue does not exceed $5m, Need not file annual accounts with ACRA if declaration of solvency is filed.

Declaration to be signed by director and auditor of the company. If company is exempt from audit requirements, it is not required to have

declaration signed by auditor. There is then no disclosure to the public of its accounts. Other companies must file audited accounts every year in ACRA.

o May make loans to or give guarantees or provide security for the benefit of directors or companies in which its director(s) is/together are interested, whether or not such interest is in 20% or more of the shareholding

Other companies are prohibited from making such loans or giving such guarantee if their director(s) are interested in 20% or more of the equity shareholding of the company for which the loan or guarantee is proposed to be made.

Thus, particularly good for a family investment company. • Even if a company is exempt from audit requirements, the company, its directors and

managers still have a duty under the Companies Act to keep such accounting and other records which will sufficiently explain the Company’s transactions and financial position, and in such manner as to enable them to be conveniently and properly audited.

• These records have to be retained fro at least 7 years.

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e. Public Companies

• Definition : A company that has no restrictions on the number of shareholders or on the transfer of shares.

• May or may not be listed on SGX or other stock exchange• A listed company and a public unlisted company with 50 or more shareholders and net

tangible assets of $5m or more is subject to the requirements of the Singapore Code of Takeovers and Mergers issued by the Monetary Authority of Singapore, which applies where any person acquires a controlling interest in the company.

• Note that Takeover Code does not apply to public companies or private companies.

f. Foreign Companies

• Foreign company registered in Singapore is known as a “branch”, though “branch” is not a term used in the Companies Act.

• A client wanting to have an office in Singapore can set up a “representative office”. • If client is doing business as a sole proprietor or in a partnership, he must be registered with

ACRA.

C. DIFFERENCES BETWEEN A BUSINESS AND A COMPANY

BUSINESS LLP COMPANYGoverning Law for registration

Business Registration Act Limited Liability Partnership Act

Companies Act

Legal status Sole proprietorship and partnership, no separate legal status.

No separate legal status. Separate legal status.

Legal responsibilities

No need for audited accounts.

No need for audited accounts.

Audited accounts required except exempt companies.

Starting up, maintenance, ending of entity

Cheaper and easier to maintain.

Cheaper and easier to maintain.

Keeping of register / records. Financial reporting.

Winding up governed by the Companies Act.

Taxation Taxed as a partnership Taxed as a partnership Corporate tax. Liability Not limited. Partners

personally liable.Limited liability Limited liability.

Other relevant legislations:

• Securities and Futures Act (regulates activities carried on by biz entities when they want to issue securities / futures)

• Trust Companies Act • Partnership Act (regulates behaviour, conduct, responsibilities between partners)• Bankruptcy Act (regulates what happens when the business fails)

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D. E-FILING

Pre-registration requirements• Electronic Filing System – http://www.bizfile.gov.sg (note that this is in the regulations) • All local residents in Singapore can e-file.• Authentication and verification of Identities done via:

o NRIC and confidential Singpass (issued by CPF Board)o Professional Number (firm / company can apply for one)o Other in-built checks by system e.g. tracking of locus standi of person filing.

Legal basis for e-filing• S 12A Companies Act• S 20 Business Registration Act• Note: actual wording of provisions not important.

Who can e-file?• Prescribed persons are named in:

o Regulation 6 Companies (Filing of Documents) Regulationo Regulation 6 Limited Liability Partnership Regulationso Regulation 4 Business Registration Regulations

(a) an advocate and solicitor; (b) an accountant registered with the Institute of Certified Public Accountants of Singapore; (c) a member of the Association of International Accountants (Singapore Branch); (d) a member of the Institute of Company Accountants, Singapore; (e) a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators; (f) a corporate secretarial agent; (g) a service bureau

E. BUSINESS TRUSTS

Characteristics• Not a separate legal entity • A trust, with a trust deed. • Not registered with ACRA, but with MAS. • Both legal title and assets in the company. Trustee holds the legal title.• May make distributions to unit holders as long as BT is solvent, even if they have no profits.

Governing documents• It is a trust. Governed by a trust deed which constitutes the trust. There is legislation which

regulates business trusts.• BTA, Regulations

o BTA regulates the provisions needed to be included in the trust deed.

Whom involved• Trustee manager, Unit holders (instead of Directors and Shareholders)• Trustee manager: holds assets of a business trust – legal title vests in trustee but trustee

has no beneficial title.

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http://www.bizfile.gov.sg/


o Trustee manager HAS to be a company. o Trustee manager has fiduciary duties in relation to the BT.

• Unit Holders: have beneficial title. Subscribe for units in the business trusts (not shares). o Liability is limited to subscription in the BT.

Business Trusts REITsRegulated by BTA Regulated by Code of CISAdministered by MAS Administered by MASSingle trustee manager (of assets and interests)

One trustee merely holds the assets on charge for unit holders while a different entity manages the assets.

• Examples of usageo Businesses with stable growth and good cashflowo E.g. Infrastructure business with cashflow from tolls etc. who have not become

profitable due to high initial investment.

F. LIMITED LIABILITY PARTNERSHIPS

a. Features

• Came into effect 11 Apr 2005• A body corporate which has separate legal personality from its partners. • Flexibility of a partnership as it allows partners to adopt whatever internal governance

agreed amongst the partners. Hybrid between General Partnerships and Companies. • Limits liability of each partner in respect of an obligation or act of the LLP (except for

partner’s own wrongful act or omission)• Accounting and Corporate Regulatory Authority (ACRA) administers LLP

• Consists of at least one general partner and one limited partner.• Formed by registration under relevant legislation• Currently being reviewed

• Partnership with limited liability• Body corporate – have all powers of a body corporate• Perpetual succession• Can sue and be sued• Can acquire and hold property• Have a common seal • Partners not personally liable for any business debts incurred by the LLP• * Exception: Partner is liable for losses resulting from his own wrongful act or omission

Partners in an LLP• Owner of a Business Firm• Shareholder in a company• Partner in another LLP

NOTE: s 6 LLP Act: Non-applicability of partnership law. However, partnership continues as it has been created.

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Company Law Review Committee – recommended the adoption of the LLP structure in Singapore

AT LEAST 2 partners• See s 22(1) LLP Act.

b. Creation

• Registration of a new LLP• Conversion from Business to LLP

o All partners must be partners of LLP• Conversion from Company to LLP

o All shareholders must be partners of LLPo No outstanding security interests

• Submit online transaction to convert• Conversion fee ($100) – if change the name, pay additional $15.• ** Read the 2nd and 3rd schedules of the LLP Act for effect of conversions• New Registration Number Issued• Status of previous company/business updated to “converted to LLP” and• “date of conversion” = date of registration of LLP

c. Registration process

• Application must be submitted online via the Bizfile service. System will then decide whether it needs to be referred to another authority for approval or comments.

o If referred to another authority for approval, it may take between 14 days to 2 months before outcome is known

Governing Documents• Business Registration Act and Regulations apply.

Registration process• 2 parts:

o Approval of name Same rules as those that apply with Companies. S 118 LLP Act: Every LLP shall have either the words “Limited Liability

Partnership” or “LLP” as part of its name. Appeal: $15

o Registration Process

S 6 Business Registration Act: Registration to include statement of intended business name, general nature of business, place of business, particulars of owners and manager of business and proposed date of commencement of business.

Owner of business must declare that information given is true or correct. When owner is a company, the declaration must be made by its director or secretary who must declare that company is not in liquidation.

Registration details required

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• Name of LLP• Nature of proposed business• Registered office address• Name, identification, nationality and place of residence of partners; and• Name, identification, nationality and place of residence of manager.

New registration v Conversion• New registration: s 15 BR Act

o Name of LLPo Nature of proposed businesso Registered office addresso Name, identification, nationality and place of residence of partnerso Name, identification, nationality and place of residence of manager

• S16 BR Act: Registrar, on receiving details in s15, will issue a notice of registration

• Conversion: o S20 and 2nd Schedule BR Act: a business firm may convert to an LLP if the

partners of the business are all going to be partners of the LLPo S21 and 3rd Schedule BR Act: a company may convert to an LLP if all the

shareholders of the company are going to be partners of the LLP and the company has no outstanding security interests in its assets at the time of application for conversion.

o 2nd and 3rd Schedule BR Act provide statutory provisions of the effect of the conversion (not so important)

Processing Time and Fees• Instantaneous (15 minutes); one-step process• $15 for every name approved or every appeal made • Business name reserved for 2 months or such longer period as ACRA may allow• Registration for business: $ 50 for first year ($ 20 for subsequent yearly renewal)• $150 for new registration and $100 for conversion

• Referral: 14 days to 2 months• No hardcopy of certificate will be issued• E-certificate via e-mail• Purchase business profile

o $5• Can apply for hardcopy of certificate

o Fee payable ($50)

d. Manager

• At least 1 manager ordinarily resident in Singapore. • At least 1 manger must be a natural person, 21 years and above, and locally resident.• S2 LLP Act: a manager is defined as any person who is concerned in or takes part in the

management of the LLP. • Every LLP must have at least one manager who is ordinarily resident in Singapore and a

natural person of full age and capacityo “Ordinarily resident” means the usual place of stay of a person.

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• S25 BR Act: where business owner resides outside Singapore or is a company incorporated elsewhere, a local manager must be appointed. The local manager must be a Singapore citizen or permanent resident and is personally responsible for the business and subject to same liabilities and penalties as the owner of the business.

• S26 BR Act: Local manager cannot be an undischarged bankrupt, unless he has leave from High Court or written permission from the Official Assignee.

• Manager must not be:o S33 LLP Act: an undischarged bankrupt unless he has obtained leave of High Court

or written permission of the Official Assigneeo S34 LLP Act: disqualified as a manager of a former LLP wound up on grounds of

national security or interest and disqualified to act as a managero S35 LLP Act: disqualified as a person who was convicted of offences involving fraud

or dishonesty or other offences connected with formation or management of an LLPo S36 LLP Act: disqualified under s149, 149A or 154 of the Companies Act

• Responsible for filing certain online transactions.• Can be a partner.

e. Partners

• Owners of LLP. Can be managers. • S7 LLP Act: a partner is defined as any person who has been admitted as a partner in the

LLP in accordance with the LLP agreement. • Every LLP shall have at least 2 partners and may be an individual, local company, foreign

company or another LLPo Can be natural person (at least 21 years old) or body corporate (local / foreign

company, unregistered foreign company, unregistered local entity LLP) • At least 2 partners ordinarily resident in Singapore.

f. Medisave

• CPF Act requirement: every self-employed persons who are to be partners of an LLP are required to top up their Medisave account with the CPF Board before they can proceed.

• Requirements are:o For partners onlyo For registration of new LLPo For conversiono For addition of new partner

g. Publicity

• S4 BR Act: Registered business must print the registered business name and registration number on every letterhead, invoice, bill or other documents used for the business.

• S27 LLP Act: Every LLP must ensure that its invoices and official correspondences bear the name of the LLP, registration number and statement that it is registered with limited liability.

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• Additionally, an LLP formed upon conversion from a business or company must include statement that LLP was, as from date of registration, converted from business or company to an LLP and the name and registration number of the former entity it is converted from. This statement must be displayed for 12 months commencing 14 days after registration of the LLP. (Second and Third Schedule LLP Act)

• Statement that it is registered with limited liability.

h. Exemptions

• S4 BR Act: The law exempts certain categories of people from registration requirementso licensed hawkerso domestic craftsmeno taxi driverso trishaw driverso sampan meno farmerso private fish pond keepers or prawn pond keeperso Professionals (lawyers, accountants, doctors)o Statutory boards, societies, co-operative societies, mutual benefit organizations and

charitable institutions• S4(2) BR Act: A business entity registered under the CA need not repeat registration under

the BR Act provided it carries on business under a business name which consists of its corporate name.

• S4(1)(k) BR Act: Minister of Finance has power to exempt certain persons from registration and notices of these exemptions are published in the Gazette

G. REGISTRATION OF A BUSINESS (Sole Proprietorship or Partnership)

• Registration is under the Business Registration Act• Application to be made to ACRA using Bizfile service. • Registration of a business is required when your client intends to carry on business in

Singapore as a sole proprietor or in partnership, or if your client being a company, wants to carry on business under a name, other than its registered corporate name.

Registration• Application to include:

o Statement of the intended business name;o General nature of the business;o The place or places where the business is carried on;o Particulars of the owners and the manager of the business; ando Date or proposed date of commencement of the business.

• Owner to declare that information given is true and correct. Where owner is a company, declaration to be made by director or secretary who must declare company is not in liquidation.

• A prescribed person (lawyer, chartered secretary, public accountant, and an employee of an approved service bureau) may make applications on behalf of the owners of the business.

• Upon approval, firm is registered immediately and valid for one year, renewable at $20.

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• However, self-employed business owners must be up-to-date in their Medisave contributions in order to renew.

Fees• Registration fee: $65 / year (including name approval fee of $15)

Names• Restrictions are similar to that of companies.

Manager• A local manager (Singapore citizen or PR) is required if the proprietor or the partners of the

business are all foreigners or foreign companies. • To be personally responsible for the business and is subject to the same liabilities and

penalties as the owner of the business. • Cannot be an undischarged bankrupt, unless he has leave from HC or written permission

from the OA. • The appointment of a local manager is optional if the proprietor or any of the partners are

Singaporeans, Singapore PRs or Singapore-incorporated companies.

Publicity requirements• Must print registered business name and registration number of the business on every

letterhead, invoice, bill or other documents used for the business.

Exemptions• The law exempts certain categories of people from the registration requirements

o Licensed hawkerso Domestic craftsmeno Taxi driverso Trishaw driverso Sampan meno Farmerso Private fish pond keepers or prawn pond keepers

• Professionals (lawyers, accountants, doctors) need not register as they are professional bodies.

• Other entities such as statutory boards, societies, co-operative societies, mutual benefit organisations and charitable institutions set up under statutes are also exempted.

• A business entity registered under the CA is not required to repeat registration under the BR Act, provided it carries on business under its corporate name.

• BR Act allows Minister of Finance to exempt certain persons from registration.

H. INCORPORATION OF A COMPANY

• 2 stage process:o Online application for approval and reservation of a company nameo Online submission of incorporation application and e-documents

• S 19 CA: To be done by a person named in the articles as a director or secretary of the proposed company or a prescribed person who has been engaged to form the proposed company. (Includes advocate and solicitor, accountant or a chartered secretary engaged to incorporate the company. See r 6 Companies (Filing of Documents) Regulations)

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a. Approval for names of companies and reservation of company name

Governing law and guidance notes• S 27-28 CA and Companies (Identical Names) Rules 2003• S 11 BR Act and Business (Identical Names) Rules 2003• S 19 LLP Act and LLP (Identical Names) Rules 2005• RCB Practice Direction 3 of 2003 and 2005.• ACRA Practice Direction 4 of 2003

Choice of name• A name shall be rejected if it is, in the Registrar’s opinion:

o Undesirable; Case law states that immoral names, names that are offensive in nature are

undesirable. What about names that tend to pass of government bodies?

o Identical to that of any other company, LLP, corporation or business name; oro Gazetted Name that is not allowed for registration

E.g. Esplanade

• ACRA has issued some guidelines as to what terms will be considered as identical. • See Practice Direction No. 4 of 2003, “Selection of company and business names”• Identical names: See Companies (Identical Names) Rules 2003• If name is rejected, consider how important the name is to your client, as you might want to

make representations to have the name cleared.

• When making an application, the following information is required:o Name to be used;o Type of company to be formed

Private or public Limited or unlimited liability Limited by share or by guarantee

o The intended activities of the proposed companyo The names and particulars of proposed member/shareholder(s). A company can be

incorporated with just one member/shareholder. (s 17(1) CA)o The names and particulars of proposed director(s). A company shall have at least

one director who is ordinarily resident in Singapore and, where the company only has one member, that sole director may also be the sole member of the company. (s 145(1) CA). However where a director is the sole director of a company, he shall not act or be appointed as the secretary of the company. (s 171(1E) CA)

o Whether the proposed company will take over a business and if so, the name and particulars of the business

o Whether in-principle approval has been obtained from other regulatory bodies.

COMPANIES ACTNames of companies.27. —(1) Except with the consent of the Minister, a company shall not be registered by a name that in the opinion of the Registrar —

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(a) is undesirable; (b) is identical to that of any other company, limited liability partnership or corporation, or to a business name; or (c) Deleted by Act 12/2002, wef 13/01/2003. (d) is a name of a kind that the Minister has directed the Registrar not to accept for registration.

(2) Notwithstanding anything in this section and section 28 (other than section 28 (4)), where the Registrar is satisfied that the company has been registered (whether through inadvertence or otherwise and whether before, on or after the date of commencement of section 9 (a) of the Companies (Amendment) Act 2005) by a name — (a) which is referred to in subsection (1); (b) which so nearly resembles the name of another company or corporation or a business name as to be likely to be mistaken for it; or (c) the use of which has been restrained by an injunction granted under the Trade Marks Act (Cap. 332), the Registrar may direct the first-mentioned company to change its name, and the company shall comply with the direction within 6 weeks after the date of the direction or such longer period as the Registrar may allow, unless the direction is annulled by the Minister.

(2A) Any person may apply, in writing, to the Registrar to give a direction to a company under subsection (2) on a ground referred to in that subsection; but the Registrar shall not consider any application to give a direction to a company on the ground referred to in subsection (2)( b ) unless the Registrar receives the application within 12 months from the date of incorporation of the company.

BUSINESS REGISTRATION ACTRestrictions on registration of business names13. —(1) Except with the consent of the Minister, the Registrar shall refuse to register a person under this Act to carry on business under a name which, or to allow a person to change the name under which he carries on business to one which, in the opinion of the Registrar — (a) is undesirable; (b) is identical to that of any corporation or to a business name; (c) is identical to a name that is being reserved under this section or under section 27 of the Companies Act (Cap. 50); or (d) is a name of a kind that the Minister has directed the Registrar, by notification in the Gazette, not to accept for registration.

(4) Notwithstanding anything in this section, where the Registrar is satisfied that a person has been registered (whether through inadvertence or otherwise and whether originally or by a change of name) to carry on business under a name which — (a) is a name referred to in subsection (1) (a), (b) or (d); or (b) so nearly resembles the name of any corporation or any other business name as to be likely to be mistaken for it, the Registrar may direct the person to change the name under which he carries on business, and the person shall comply with the direction within 6 weeks after the date of the direction or such longer period as the Registrar may allow, unless the direction is annulled by the Minister.

(5) Any person may apply, in writing, to the Registrar to give a direction to any other person, on a ground referred to in subsection (4) (a) or (b), to change the name under which the second-mentioned person carries on business. [13/2002](6) The Registrar shall not consider any application under subsection (5) to give a direction to a person on the ground referred to in subsection (4) (b) unless the Registrar receives the application within 12 months from the date of registration of the person.

LIMITED LIABILITY PARTNERSHIP ACT

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Restrictions on registration of business names19. —(1) The Registrar may refuse to register a limited liability partnership under a name, or allow a limited liability partnership to change its name to one, that in the opinion of the Registrar is — (a) undesirable; (b) identical to that of any other limited liability partnership or corporation or to a business name; (c) identical to a name that is being reserved under this section, section 13 of the Business Registration Act (Cap. 32) or section 27 of the Companies Act (Cap. 50); or (d) a name of a kind that the Minister has directed the Registrar not to accept for registration.

(4) Notwithstanding anything in this section, where the Registrar is satisfied that a limited liability partnership has been registered (whether through inadvertence or otherwise and whether originally or by a change of name) under a name which — (a) is a name referred to in subsection (1); or (b) so nearly resembles the name of any other limited liability partnership or corporation or a business name as to be likely to be mistaken for it, the Registrar may direct the limited liability partnership to change its name, and the limited liability partnership shall comply with the direction within 6 weeks after the date of the direction or such longer period as the Registrar may allow, unless the direction is annulled by the Minister.

(5) Any person may apply, in writing, to the Registrar to give a direction to any limited liability partnership, on a ground referred to in subsection (4) (a) or (b), to change its name. (6) The Registrar shall not consider any application under subsection (5) to give a direction to a limited liability partnership on the ground referred to in subsection (4) (b) unless the Registrar receives the application within 12 months from the date of registration of the limited liability partnership under that name.

What about similar names?• Law was amended to remove regulation of similar names wef 2003• However complaint can be made for similar name that creates confusion under s27(2A) CA

(for companies), s13(5) and (6) BR Act (for businesses) and s19(5) and (6) LLP Act (for LLPs)

o Application must be in writing and made within 12 months from date of incorporation of that company

• If the Registrar is satisfied that the company/business/LLP has been registered by a name which is undesirable, similar to another company or business name as to be mistaken, the Registrar can direct company/LLP/business to change name within 6 weeks under s27(2) CA, s13(4) BR Act and s19(4) LLP Act

Difference between name protection and violation of intellectual property rights• Name protection is to protect public rights in the sense that the public might be confused by

similar names• IP rights are private rights

Foreign company names – S 378 CA • A foreign company can set up as a local branch office (does not have separate legal

personality from head office) or incorporate a new company• 2 requirements for a foreign company to register (local branch office) under s378(1) CA:

cannot be undesirable name, cannot be something Minister has gazetted against using

COMPANIES ACTRestriction on use of certain names

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378. —(1) Except with the consent of the Minister, a foreign company shall not be registered by a name that, in the opinion of the Registrar, is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration. (2) Except with the consent of the Minister, any change in the name of a foreign company shall not be registered if in the opinion of the Registrar the new name of the company is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration, notwithstanding that particulars of the change have been lodged in accordance with section 372. (3) No foreign company to which this Division applies shall use in Singapore any name other than that under which it is registered under this Division. (4) If default is made in complying with subsection (3), the foreign company, every officer of the company who is in default and every agent of the company who knowingly and wilfully authorises or permits the default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty.

Use of certain words and activities may require approval from relevant government or statutory authorities. ACRA will make a referral to these bodies for such cases. • Examples:

o private schools - Ministry of Educationo tour agencies - Singapore Tourist Boardo Banks/Finance Company/Insurance – Monetary Authority of Singaporeo Use of the word “Singapore” as a prefix of the name – approval needs to be sought

by the EDB.

▪ Tan Gek Neo Jessie v Minister for Finance (1991) SLR 325Facts:• P registered business with similar name to a trademark registered by a US Company who

did not use the trademark in Singapore but had registered it here. Registrar directed P to change name of her business.

Held:• Registrar was wrong• There is no property in a name no one can claim it for their own use exclusively• Under present s13(1)(b) Business Registration Act, mere resemblance of name is not

sufficient, rather name must have been calculated to mislead

▪ Drilex Systems Pte Ltd v Registrar of Companies and Anor (1993) 2 SLR 345Facts: • P registered name (Drilex System Pte Ltd) and subsequently a foreign company registered

a similar name in Singapore (Drilex System Inc)

Held:• Foreign company could register the similar name

o Similarity that leads to confusion per se is not a ground for undesirability. There must be something more than this. (E.g. abuse of the system, squatting on the name)

o Law in Singapore not clear. But we know that it has to be something more than similarity leading to confusion.

• S 378 CA applied here and not s 27 CA which applies to local companies• Reason: similarity of name not sufficient to prevent registration of foreign company’s name.

There must be financial detriment shown. Mere inconvenience and confusion was not sufficient reasons.

• For foreign companies:

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o Gazetted nameso Undesirable names

• Notice that similar / identical names are not included.

Fees • Application fee - S$15 per approved name, $15 to appeal to Registrar for rejected name to

be reconsidered (2nd Schedule CA)

Reservation of company name

• S27(12) CA: Reservation period for the name – 60 days from date of lodgment• S27(13) CA: Extension of another 60 days possible

o $10 payable for application for extension of reservation period (2nd Schedule CA)o During reservation period, no one else may use an identical name

COMPANIES ACTSECTION 27(12) If the Registrar is satisfied as to the bona fides of the application and that the proposed name is a name by which the intended company, company or foreign company could be registered — (a) without contravention of subsection (1) in the case of a company (whether originally or upon change of name); and (b) without contravention of section 378 in the case of a foreign company (whether originally or upon change of name), he shall reserve the proposed name for a period of two months from the date of the lodging of the application. 22/93.

(13) If, at any time during a period for which a name is reserved, application is made to the Registrar for an extension of that period and the Registrar is satisfied as to the bona fides of the application, he may extend that period for a further period of two months.

Processing time• Instantaneous

Other information required when making application for approval and reservation to use company name

1. Name of proposed company2. Type of company to be formed3. Intended activities of company4. Names and particulars of proposed member/shareholders. A company can be

incorporated with just one member/shareholder (s17(1) CA)5. Names and particulars of proposed directors. 6. Whether proposed company will take over a business and if so, name and particulars of

the business7. Whether in-principal approval has been obtained from other regulatory body, if

applicable

b. The Incorporation Process

i. Registration and incorporation

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3 main categories of information need to be furnished

1. Particulars of directors, secretaries and auditors (ss 146(1), 173(6)(c), 171(1B) CA) 2. Details of capital structure, allotment of shares and particulars of shareholders (s 63 CA)3. Details of situation of registered office hours and M&A

a. 3 options to the M&A: follow model M&A, customize the model M&A or use your own M&A

**Below will be the detailed breakdown of the provisions and requirements for the registration of the company**

S 19 CA – REGISTRATION AND INCORPORATION • s 19(1) CA: To incorporate a company, you need to submit M&A of proposed company,

other information as prescribed and pay the prescribed fee• s 19(3) CA: Registrar will register company after receiving all the relevant information

COMPANIES ACTRegistration and incorporation.19. —(1) A person desiring the incorporation of a company shall — (a) submit to the Registrar the memorandum and articles of the proposed company and such other documents as may be prescribed; (b) furnish the Registrar with such information as may be prescribed; and (c) pay the Registrar the prescribed fee.

(3) Upon receipt of the documents, information and payment referred to in subsection (1) and declaration referred to in subsection (2), the Registrar shall, subject to this Act, register the company by registering its memorandum and articles.

• S 19(2) – Who can incorporate and declarations required by the person incorporating the company

• Prescribed person/Director/Company Secretary can incorporate the company• One of these must make declaration that:

o all requirements of the CA on formation has been fulfilled; o identities of subscribers and officers of the company have been verified; o each director named has given his consent to act as a director and is not disqualified

to act as director under the CA (s 146(1A), CA and Regulation 18 C(FOD)R); ando the secretary, if any, has consented to act as one and is a qualified person under s

171 of the CA where applicable. (s 171(1B) CA, and Regulation 18, C(FOD)R)

COMPANIES ACT SECTION 19(2) Either — (a) a prescribed person engaged in the formation of the proposed company; or (b) a person named in the articles as a director or the secretary of the proposed company, shall make a declaration to the Registrar that — (i) all of the requirements of this Act relating to the formation of the company have been complied with; and

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(ii) he has verified the identities of the subscribers to the memorandum, and of the persons named in the memorandum or articles as officers of the proposed company, and the Registrar may accept such declaration as sufficient evidence of those matters.

• S 19(4) – Notice of incorporation

• Registrar will issue notice of incorporation stating:o Date of incorporationo Type of company ie limited or unlimited, if limited, whether by shares or by guaranteeo In the case of a private company, that it is a private company

(4) On the registration of the memorandum the Registrar shall issue in the prescribed manner a notice of incorporation in the prescribed form stating that the company is, on and from the date specified in the notice, incorporated, and that the company is — (a) a company limited by shares; (b) a company limited by guarantee; or (c) an unlimited company, as the case may be, and where applicable, that it is a private company.

• S 19(7) – Hard copy confirmation issued by Registrar

• This is upon application and payment of prescribed fee

(7) Upon the application of a company and payment of the prescribed fee, the Registrar shall issue to the company a certificate of confirmation of incorporation under his hand and seal.

ii. Legal effect of M&A

S 22 & 35 - MEMORANDUM AND ARTICLES OF ASSOCIATION

S 22 CA states the requirements as to memorandum:• s 22(1) CA: Must state the following information in the memorandum

o Name of company To be stated as the first clause of the memorandum. Name to be published in its seals, business letters, statements of accounts,

invoices, official notices, publications, bills of exchange, promissory notes, endorsements, cheques, orders, receipts and the company’s letters of credit.

W.e.f. 1 Oct 2004, the registration number of a company shall appear in a legible form on all business letters, statements of account, invoices, official notices and publications of or purporting to be issued or signed by or on behalf of the company (s 144(1A) CA)

o Liability of its members, whether limited or unlimited For company limited by shares, that liability of members are limited For company limited by guarantee, that liability of members is limited and the

undertaking of each member to contribute to assets of company For unlimited company, that liability of members are unlimited

o Names, addresses and occupations of subscribers

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Must include statement that the subscribers agree to being formed into a company and if the company has a share capital, that he agrees to take up the shares

Note: The Companies (Amendment) Act 2005 removed the concept of par value concept shares and authorised capital. Hence, s 22(1)(c) was deleted. S 22(1A) CA was introduced as a transition to deem deleted any provision subsisting in any company’s memorandum which states the authorised capital or par value of the shares.

• s22(2) CA:o Subscriber to make declaration of number of shares he is going to hold (not less than

one) either by himself or through a prescribed person authorised by him. • Note that minimum requirement is that one person must subscribe his name to a

memorandum (s17(1) CA)• Memorandum must be kept in registered office of company s22(4) CA

o Every company must at all times have a registered office to ensure that every company has an official address to which all communications are addressed.

o Need not be a place of business, but must be open to the public for at least 3 hours during office hours everyday.

Requirements as to memorandum.22. —(1) The memorandum of every company shall be dated and shall state, in addition to other requirements — (a) the name of the company; (b) Deleted by Act 5/2004, wef 01/04/2004. (c) Deleted by Act 21/2005, wef 30/01/2006. (d) if the company is a company limited by shares, that the liability of the members is limited; (e) if the company is a company limited by guarantee, that the liability of the members is limited and that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member and of the costs, charges and expenses of winding up and for adjustment of the rights of the contributories among themselves, such amount as may be required not exceeding a specified amount; (f) if the company is an unlimited company, that the liability of the members is unlimited; (g) the full names, addresses and occupations of the subscribers thereto; and (h) that such subscribers are desirous of being formed into a company in pursuance of the memorandum and (where the company is to have a share capital) respectively agree to take the number of shares in the capital of the company set out opposite their respective names. (1A) On the date of commencement of section 8 (b) of the Companies (Amendment) Act 2005, any provision (or part thereof) then subsisting in the memorandum of any company which states — (a) the amount of share capital with which the company proposes to be or is registered; or (b) the division of the share capital of the company into shares of a fixed amount, shall, in so far as it relates to the matters referred to in either or both of paragraphs (a) and (b), be deemed to be deleted. (2) Each subscriber to the memorandum shall, if the company is to have a share capital, make a declaration to the Registrar, either by himself or through a prescribed person authorised by him, as to the number of shares (not being less than one) that he agrees to take. (3) A statement in the memorandum of a company limited by shares that the liability of members is limited shall mean that the liability of the members is limited to the amount, if any, unpaid on the shares respectively held by them. Aust.s.18.

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(4) A copy of the memorandum, duly signed by the subscribers and stating, if the company is to have a share capital, the number of shares that each subscriber has agreed to take, shall be kept at the registered office of the company.

• Definition: Internal regulations of a company which outline the procedures by which its affairs are to be conducted.

• Table A MUS T be adopted in whole or part, by a company, as its articles. • If a company does not register its own articles, then Table A automatically applies. Even if it

registers its own articles, Table A applies insofar as the articles do not exclude or modify it. • A company’s articles may include other matters not specified in Table A, UNLESS they are

illegal, contradict the Act or modify the memorandum. • A company must send a member a copy of the M&A upon request charging maximum $5. • For a list of what articles include, see pp 29 – 31 of the Manual.

• S 35 – requirements as to articles; model articles is in 4th Schedule, Table A

Articles of association.35. —(1) There may in the case of a company limited by shares and there shall in the case of a company limited by guarantee or an unlimited company be registered with the memorandum, articles signed by the subscribers to the memorandum prescribing regulations for the company. (2) Articles shall comply with such requirements as may be prescribed. (3) Deleted by Act 21/2005, wef 30/01/2005. (4) In the case of an unlimited company or a company limited by guarantee the articles shall state the number of members with which the company proposes to be registered. 15/84.(5) Where a company to which subsection (4) applies changes the number of its members so that it is different from the registered number, the company shall, within 14 days after the date on which the change was resolved or took place, lodge with the Registrar notice of the change in the prescribed form. (6) Every company which makes default in complying with subsection (5) and every officer of the company who is in default in complying with that subsection shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty.

General information on M&A• After 1 April 2004, CA confers on companies all legal capacities to undertake any business

or activity, do any act or enter into any transaction, and companies have full rights, powers and privileges for the purposes of their activities listed (s23 CA)

• Optional whether company wants to set out object clauses to limit powers of company• Liability of members and structure of share capital must be set out• Lodged with Registrar.

Effect of M&A• Every member of a company must observe all the provisions of the memorandum• The articles constitute a contract, not only between the shareholders and the company, but

also between the individual shareholders• The company is not bound to its members outside of their capacity as members.

iii. Notice of Incorporation

• Electronic notice of incorporation will be issued.• Notice of incorporation will state:

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o Whether company is a private or public companyo Whether company is limited or unlimited (if limited, by shares or guarantee).

• A private company may commence business upon receiving its notice of incorporation.

• A public company must submit additional electronic documents in order to obtain a notice of entitlement to commence business:

o A statement in lieu of prospectus;o A declaration (made by a director or the company secretary, or a prescribed person

authorised by the company) stating that every director of the company has paid to the company on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash.

iv. Registered office and registration number

S 143 CA - ADDRESS OF REGISTERED OFFICE AND PUBLICATION OF REGISTRATION NUMBER

• S142(1) CA: Must be open and accessible to public for not less than 3 hours everyday except weekends and public holidays

• S143(1) CA: Notice must be given about the hours and the days a company’s registered office is open unless the registered office is open for at least 5 hours everyday except weekends and public holidays.

o Notice must also be given if there is changed in particulars of companyo Address of company is considered as part of the particulars and must be notified to

the Registrar when it is changedo Registered office cannot be a PO Boxo Registered office need not be place of business

Office hours.143. —(1) Notice in the prescribed form of the situation of the registered office, the days and hours during which it is open and accessible to the public, shall, in the case of a proposed company, be lodged with the Registrar together with its memorandum and its articles, if any, at the time of lodgment for the incorporation of the proposed company and in the case of any subsequent change of the particulars therein be so lodged within 14 days of any such change, but no notice of the days and hours during which the office is open and accessible to the public shall be required if the office is open for at least 5 hours during ordinary business hours on each day, Saturdays, weekly and public holidays excepted. (1A) In subsection (1), the word “particulars”, in relation to the situation of the registered office, shall be deemed to include the address and designation of the situation or address of the registered office.

Amendments made in 2004:• Abolition of mandatory legal requirement to display sign boards.• Mandatory requirement to insert registration number on certain businesses documents

(144(1A))

Publication of name and registration number.144. —(1) The name of a company shall appear in legible romanised letters on — (a) its seal; and

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(b) all business letters, statements of account, invoices, official notices, publications, bills of exchange, promissory notes, indorsements, cheques, orders, receipts and letters of credit of or purporting to be issued or signed by or on behalf of the company. (1A) The registration number of a company shall appear in a legible form on all business letters, statements of account, invoices, official notices and publications of or purporting to be issued or signed by or on behalf of the company.

v. Other provisions

S 146(1A) CA - CONSENT TO ACT AS DIRECTOR AND STATEMENT OF NONDISQUALIFICATION TO ACT AS DIRECTOR (FORM 45)

• s.146(1A) CA - director must file with Registrar his declaration of consent to act as director and statement that he is not disqualified from acting as a director

• S 173(2)(a) CA – Register of directors must contain a signed copy of the director’s consent to be a director of the company

o Prescribed form 45 under CR• S 173(6)(c) CA – Company to lodge with Registrar prescribed form with name and address

of manager, secretary and auditor.

Restrictions on appointment or advertisement of director.146. —(1) A person shall not be named as a director or proposed director in — (a) any document filed or lodged with or submitted to the Registrar for the purposes of the incorporation of a company; or (b) the register of directors, managers and secretaries of a company, unless, before — (i) the incorporation of the company; or (ii) the filing of any return in the prescribed form containing the particulars required to be specified in the register of directors, managers and secretaries, as the case may be, the person has complied with the conditions set out in subsection (1A). (1A) The conditions to be complied with by a person referred to in subsection (1) are the following: (a) he has, by himself or through a prescribed person authorised by him, filed with the Registrar — (i) a declaration that he has consented to act as a director; and (ii) a statement in the prescribed form that he is not disqualified from acting as a director under this Act; and (b) he has, by himself or through a prescribed person authorised by him — (i) filed with the Registrar a declaration that he has agreed to take a number of shares of the company that is not less than his qualification, if any; (ii) filed with the Registrar an undertaking that he will take from the company and pay for his qualification shares, if any; (iii) filed with the Registrar a declaration that a specified number of shares, not less than his qualification, if any, has been registered in his name; or (iv) in the case of a company formed or intended to be formed by way of reconstruction of another corporation or group of corporations or to acquire the shares in another corporation or group of corporations, filed with the Registrar a declaration that — (A) he was a shareholder in that other corporation or in one or more of the corporations of that group; and (B) as a shareholder he will be entitled to receive and have registered in his name a number of shares not less than his qualification, by virtue of the terms of an agreement relating to the reconstruction.

Register of directors, managers, secretaries and auditors.173. —(1) Every company shall keep at its registered office a register of its directors, managers, secretaries and auditors.

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(2) The register shall — (a) contain, with respect to each director, a signed copy of his consent to act as director under this Act together with a prescribed statement that he is not disqualified to act as a director;

(6) The company shall lodge with the Registrar —(c) within one month after a person becomes a manager, secretary or auditor of the company, a return in the prescribed form notifying the Registrar of that fact and specifying the full name and address of that person;

• “director” includes (s.4 CA) :o any person occupying the position of director by whatever name calledo a person in accordance with whose directions or instructions the directors are

accustomed to acto includes alternate or substitute director

Some new policies for the past 3 years:

• s145(1) CA states that one director/one shareholder companies allowed, as long as sole director is locally resident in Singapore

• S 171(1E) CA states that when director is sole director of company, he cannot act as company secretary for the same company

• S 145(7) CA allows Registrar or court to direct shareholders to appoint director if there are no directors

• S145(10) CA prescribes unlimited liability on member if he knowingly allow the company to carry on business without any directors for more than 6 months

S 171 CA - CONSENT TO ACT AS SECRETARY (FORM 45B)

• S171(1) CA: Company must have one or more secretaries who are natural persons with his principal place of residence in Singapore

• S171(1A) CA: Duty of director to take reasonable steps to ensure that the Company Secretary has the requisite knowledge and experience to discharge its functions

• S 171(1B) CA: Declaration must be filed that person consents to act as a secretary together with other particulars.

• S173(4A) CA: consent of company secretary to act to be kept in the company’s register• S 173(6)(c) CA: Company to lodge with Registrar prescribed form with name and address of

manager, secretary and auditor.

Secretary.171. —(1) Every company shall have one or more secretaries each of whom shall be a natural person who has his principal or only place of residence in Singapore.

(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.

(1B) Any person who is appointed by the directors of a company as a secretary shall, at the time of his appointment, by himself or through a prescribed person authorised by him, file with the Registrar a declaration in the prescribed form that he consents to act as secretary and providing the prescribed particulars.

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Register of directors, managers, secretaries and auditors.173. —(1) Every company shall keep at its registered office a register of its directors, managers, secretaries and auditors.

(4A) The register shall contain a signed copy of the consent of the secretary of the company to act as the secretary.

(6) The company shall lodge with the Registrar —(c) within one month after a person becomes a manager, secretary or auditor of the company, a return in the prescribed form notifying the Registrar of that fact and specifying the full name and address of that person;

• S 171(1AA) CA for requirements of Company Secretaries for Public Companies

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), a public accountant, 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.

• Definition of Secretary - An officer of the company (s.4 CA); involved primarily with the administrative operations of the company e.g. calling AGM, issue of notices thereof, company’s filing obligations under CA

• S 171(1E) CA - A person cannot discharge duty as a sole director of company cum secretary at same point.

S205 CA – APPOINTMENT OF AUDITOR

• S205(1) CA: Auditor to be appointed within 3 months of incorporation and to hold office until conclusion of first AGM

• S205A CA: Company exempt from appointing auditor if it is dormant or a small exempt private company with revenue not exceeding prescribed amount

o Prescribed amount is $5 million for a financial year commencing on or after 1 June 2004

• S 173(6)(c) CA: Company to lodge with Registrar prescribed form with name and address of manager, secretary and auditor.

• Shareholders who hold at least 5% of total number of issued shares or form at least 5% of total number of members of company may require the company to audit its accounts.

Appointment and remuneration of auditors.205. —(1) The directors of a company shall, within 3 months after incorporation of the company, appoint a person or persons to be the auditor or auditors of the company, and any auditor or auditors so appointed shall, subject to this section, hold office until the conclusion of the first annual general meeting.

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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.

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 not less than 5% of the total number of issued shares of the company (excluding treasury shares) or any class of those shares (excluding treasury shares), or not less than 5% of the total number of members of the company (excluding the company itself if it is registered as a member) 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 requirements205C. —(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 —

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"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.

“Exempt private company” definition found in s4(1) CA• One where none of the shareholders (legal and/or beneficial) is a company (ie all

individuals) and there must not be more than 20 shareholders• Advantage of exempt private company

o Exempted from audit requirements if revenue for the year does not exceed $5million (s205A CA)

o Need not file annual accounts with ACRA if declaration of solvency is filed no public disclosure of its accounts

o May make loans or give guarantees or provide security for benefit of directories or companies in which its directors are interested, whether or not such interest is in 20% or more of the shareholding (Other companies prohibited from making such loans, giving such guarantees or providing such security) good for family investment company

S 63 CA - RETURN OF ALLOTMENT OF SHARES

s.63(1) CA –• Any allotment of shares made must ”within 14 days” be lodge with Registrar• Give details of allotment – number, amt paid/unpaid, different classes, details of top 50

shareholders.• “Deemed allotment” applies for incorporation of company

Return as to allotments.63. —(1) Where a company makes any allotment of its shares, other than a deemed allotment, the company shall within 14 days thereafter lodge with the Registrar a return of the allotments stating — (a) the number of the shares comprised in the allotment; (b) the amount (if any) paid or deemed to be paid on the allotment of each share; (ba) the amount (if any) unpaid on each share referred to in paragraph (b); (c) where the capital of the company is divided into shares of different classes the class of shares to which each share comprised in the allotment belongs; and (d) the full name, identification, nationality (if such identification or nationality, as the case may be, is required by the Registrar) and address of, and the number and class of shares held by — (i) each of its members; or (ii) if it has more than 50 members as a result of the allotment, each of the 50 members who, following the allotment, hold the most number of shares in the company (excluding treasury shares). (1A) A return of allotments referred to in subsection (1) by a company the shares of which are listed on a stock exchange in Singapore need not state the particulars referred to in subsection (1) (d). (2) In subsection (1), “identification” means in the case of a person issued with an identity card, the number of his identity card and, in the case of a person not issued with an identity card, particulars of his passport or such other similar evidence of identification as is available. 15/84.(3) Deleted by Act 12/2002, wef 13/01/2003. (4) Where shares are allotted as fully or partly paid up otherwise than in cash and the allotment is made pursuant to a contract in writing the company shall lodge with the return the contract evidencing the entitlement of the allottee or a copy of any such contract certified as prescribed. (5) If a certified copy of a contract is lodged the original contract duly stamped shall if the Registrar so requests be produced at the same time to the Registrar. (6) Where shares are allotted as fully or partly paid up otherwise than in cash and the allotment is made —

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(a) pursuant to a contract not reduced to writing; (b) pursuant to a provision in the memorandum or articles; or (c) in satisfaction of a dividend declared in favour of, but not payable in cash to, the shareholders, or in pursuance of the application of moneys held by the company in an account or reserve in paying up unissued shares to which the shareholders have become entitled, the company shall lodge with the return a statement containing such particulars as are prescribed but, where the shares are allotted pursuant to a scheme of arrangement approved by the Court under section 210, the company may lodge a copy of the order of the Court in lieu of the statement in the prescribed form. (7) In this section, “deemed allotment” means an issue of shares without formal allotment to subscribers to the memorandum. (8) If default is made in complying with this section, every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000 and to a default penalty of $250.

* Nominal value of share and requirement for authorised capital abolished since Jan 2006.

Fees Payable

• S$ 300 Flat fee for incorporation, regardless of share capital and number of officers [2nd Schedule CA]

I. GOVERNMENT APPROVALS

• No exchange control restrictions in Singapore; free repatriation of profit and capital. • Service / sales companies: No government approvals required. • Note special requirements for Insurance companies, finance companies, banks.

J. ADVISING FOREIGN CLIENTS

• Starting point is always s 365 CA

• Always reassure them that Singapore law is based on the common law of England.• Three things to note:

o Advantages and disadvantages of a Singapore incorporated company;o The advantages and disadvantages of a branch; ando When if is appropriate to use either of these two, or a representative office instead.

• What are the client’s objectives?o Type of business / activities to be undertaken in Singaporeo Market research? o Conducting business?o Non-profit?

a. Choice of corporate vehicle

Branch• Already existing in some other jurisdiction. • If a foreign client is a bank, you would register a branch, because all banks use a branch

unless the bank is incorporating a merchant bank subsidiary.

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• Trading businesses: little practical difference between using a branch or a Singapore Company.

• Consider: o Liability for the debts and other liabilities of the Singapore business would attach to

the foreign parent in the case of a branch. (To limit the liabilities to Singapore, must incorporate a company, NOT a branch)

o ‘Sales’ or ‘Service’ company separate from main company so that the service company can charge a fee to the main company.

• Same tax rates apply whether you are a Singapore subsidiary or branch. Both must produce annual accounts to be filed with ACRA and IRAS.

• A branch must usually audit the Singapore operations and file a copy of the head office balance sheet.

• ACRA may exempt the branch from filing audited accounts of its Singapore operations in certain circumstances e.g. if branch has minimal business activities.

Representative Office• To promote sales. • International Enterprise Singapore has stated that if a representative office is carrying out

market research, feasibility studies, promotion and liaison work only, it does not need to register as a foreign company.

• The difficulty arises when promotion and liaison become actual sales. o However, if the quotations are given outside Singapore, then no registration is

required.• Must register with IE Singapore. However, financial institutions are to register with MAS. • The representative may not conclude or sign any contract in Singapore. • Where there is a very small body of Singapore customers, a representative office may still

suffice if no sales are transacted, but beyond that, be careful. When in doubt, register.

• Registration procedure is very simple and reporting requirements minimal. • Registration is an online process, requiring the company’s Certificate of Incorporation and

softcopy attachments of the company’s latest annual report and audited accounts. • If such documents are unavailable, company may seek waver and provide a set of company

brochures and self-declare the required information.

• After registration only limited to promotion and liaison work, and cannot open letters of credit.

• Representative office’s name must correspond to that of its parent company. • Takes 5 working days to approve the application, approval valid for 1 year.

• Not required to file anything with ACRA or inform ACRA of change in directors or authorised capital. However, required to notify IE Singapore prior to changing the nature of its activities or its local representatives as specified in the application form. In addition, must inform the IE Singapore in writing within 4 weeks of any change in its name, or its address or contact numbers, or its closure or upgrading of its operations.

Company• Creation of new entity

Partnership / sole proprietorship• As above. Not a separate legal entity. Personally liable.

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Society / Company limited by guarantee • Regulated by the Acra

* Note also the LLP and Business Trust structures.

b. Registration of a foreign company

• Name to be approved by ACRA prior to lodging of required documents.• S 368 CA read with Companies (Filing of Documents) Regulations 2003 prescribes

documents needed for registering a branch.• Require:

o Certified copy of the Certificate of Incorporation or Registration or other similar documents, certified by their equivalent of ACRA within 3 months preceding lodgement of the document

o Certified copy of the charter, statute, memorandum and articles of associationo List of directors – no need to have any of them resident here, but must appoint 2

local residents (who may be expatriates with an Employment Pass or an Approval-in-Principle Letter or a Dependent Pass to work here) as its agents under a Memorandum of Appointment or a power of attorney.

o Registered office: registration fees are $300 for a foreign company having share capital and $1200 for a company not having a share capital. Note that a registered office is also required for the branch of a foreign company.

c. Determinative Factors

• Limitation of liability• Tax• Incentives (e.g. EDB)• Consolidation of Assets• Nature of Company’s Activities• Licensing / Regulatory requirements• Internal Corporate / Group requirements

d. Practical Considerations

• Time• Money

o Registration feeso Audit feeso Implications of directors’ feeso Consequences in winding up v deregistration

• Shelf Companies.

e. Carrying on a business

• A foreign company cannot carry on business in Singapore without registering. • What is “carrying on business”?

o The Companies Act has a list of things which shall not, on their own, be regarded as “carrying on business”. Otherwise, there is no definition.

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• If a foreign company carries out only one isolated transaction within one month, it need not register.

f. Common issues

• Company Nameo Conflict searcho 3P consento Use of Chinese characters (must romanise)

• Resident directorso Lawyers may offer to be nominee resident directors, however they will take on all

duties and liabilities of directors under the CA and Common Law; ORo Apply to MOM for approval in principle employment pass. Pass is issued before job

commences. • Foreign currency

o Accountso Share capital

• Signed by the right person with authority• Documents to be notarised or certified for branches

o Prepare cliento Caution with translated documents

• Lawyer’s roleo Advice and documentation/making applicationso As directors o Company secretarieso As branch’s statutory agento Registered office

• Protect lawyers for costs• Assist clients and their employees with immigration clearance• Review lease agreements• Employment contracts

g. Immigration Formalities

• Work passes (for staff earning monthly basic salary of $2500 or less per month), employment passes or professional visit passes must be obtained by non-Singaporeans who are not Singapore PRs, including Malaysians.

h. Income Tax

• Foreign employee tax (vs resident tax rate)• Company Tax• GST• See http://www.iras.gov.sg/

K. OTHER TYPES OF COMPANIES

a. Foreign Branches

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http://www.iras.gov.sg/


i. Difference between foreign branches and local subsidiaries

• For a branch, liability for debts and other liability will attach to the foreign parent • Having a local subsidiary can save help save on income tax as foreign parent is not

exposed to tax on its profits it makes outside Singapore• Local subsidiary might qualify for local tax holiday incentives• Both foreign branch and local subsidiary subject to same tax rates and both must produce

annual accounts to be field with ACRA and IRAS• (Note: companies act does not guarantee listed companies. Those are governed by listing

rules)

ii. Two steps to take to register branch of foreign company

(1) Approval for name: s 378 CA

• * S378(1) CA: Except with consent of Minister, a foreign company shall not register a name that is undesirable or a name of a kind that the Minister has directed the Registrar not to accept for registration

Restriction on use of certain names378. —(1) Except with the consent of the Minister, a foreign company shall not be registered by a name that, in the opinion of the Registrar, is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration. (2) Except with the consent of the Minister, any change in the name of a foreign company shall not be registered if in the opinion of the Registrar the new name of the company is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration, notwithstanding that particulars of the change have been lodged in accordance with section 372. (3) No foreign company to which this Division applies shall use in Singapore any name other than that under which it is registered under this Division. (4) If default is made in complying with subsection (3), the foreign company, every officer of the company who is in default and every agent of the company who knowingly and wilfully authorises or permits the default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty.

Other information to submit when submitting name for approval• foreign company’s name• country of incorporation• date of incorporation• capital structure• principal activities• other countries it is registered in

Fees• $15 payable upon successful application of the foreign company’s name (2nd Schedule CA)

(2) Register with ACRA (s 368 CA) and Regulations 21 to 25 Companies (Filing of Documents) Regulations 2003

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• S368(1) CA: Foreign company must register before it acquires place of business or carries on business in Singapore

o Exception: International Enterprise Singapore (IES) allows a “representative office” that is only carrying out promotion and liason work not to register as a foreign company (just register representative office)

o S368(1)(c) CA: foreign company need not have any directors resident in Singapore.• Following documents must be filed using Bizfile:

o Regulation 21 Companies (FOD) Regulations: Copy of Certificate of Incorporation certified no earlier than 3 months before

by the official authority which issued the certificate Copy of the M&A certified no earlier than 3 months by (1) official authority

which incorporated company; (2) notary public; or (3) director, manager or secretary of company in an affidavit or statutory declaration, where applicable. (Note if M&A are not in English, their officially translated copies must be lodged (Regulation 12 Companies (FOD) Regulations read with s397 CA))

S368(1)(c) CA: particulars of all directors of the foreign company (Note: foreign company need not have any directors resident in Singapore)

S368(1)(f) CA: foreign company’s registered office in Singapore S368(1)(e) CA: memorandum of appointment or power of attorney executed

by the foreign company appointing 2 local residents to be its agents in Singapore (Note: the appointment document must be filed with the Registrar)

Documents, etc., to be lodged by foreign companies having place of business in Singapore.368. —(1) Every foreign company shall, before it establishes a place of business or commences to carry on business in Singapore, lodge with the Registrar for registration — (a) a certified copy of the certificate of its incorporation or registration in its place of incorporation or origin or a document of similar effect; (b) a certified copy of its charter, statute or memorandum and articles or other instrument constituting or defining its constitution; (c) a list of its directors containing similar particulars with respect to its directors as are by this Act required to be contained in the register of the directors, managers and secretaries of a company incorporated under this Act; (d) where the list includes directors resident in Singapore who are members of the local board of directors, a memorandum duly executed by or on behalf of the foreign company stating the powers of the local directors; (e) a memorandum of appointment or power of attorney under the seal of the foreign company or executed on its behalf in such manner as to be binding on the company and, in either case, verified in the prescribed manner, stating the names and addresses of two or more natural persons resident in Singapore authorised to accept on its behalf service of process and any notices required to be served on the company; 13/87.(f) notice of the situation of its registered office in Singapore and, unless the office is open and accessible to the public during ordinary business hours on each day (Saturdays, weekly and public holidays excepted), the days and hours during which it is open and accessible to the public, (g) Deleted by Act 12/2002, wef 13/01/2003. and on payment of the appropriate fees and subject to this Act the Registrar shall register the company under this Division by registration of the documents. (2) Where a memorandum of appointment or power of attorney lodged with the Registrar in pursuance of subsection (1) (e) is executed by a person on behalf of the company, a copy of the deed or document by which that person is authorised to execute the memorandum of appointment or power of attorney, verified

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by statutory declaration in the prescribed manner, shall be lodged with the Registrar and the copy shall for all purposes be regarded as an original. (3) Subsection (1) shall apply to a foreign company which was not registered under the repealed written laws but which, immediately before 29th December 1967, had a place of business or was carrying on business in Singapore and, on that date, had a place of business or was carrying on business in Singapore, as if it established that place of business or commenced to carry on that business on that date.

COMPANIES (FILING OF DOCUMENTS) REGULATIONSCertification or verification of documents required for registration of foreign companies21. —(1) For the purposes of section 368 (1) (a) of the Act, a certified copy of a certificate referred to in that section is a copy that has, within the period of 3 months immediately preceding the day on which it is lodged with the Registrar or within such longer period as the Registrar permits, been certified to be a true copy by an official holding or purporting to hold an office corresponding to that of the Registrar in the place in which the foreign company concerned is formed or incorporated. (2) Where the certificate referred to in section 368 (1) (a) of the Act is an electronic document, the Registrar may accept a certified copy of a print-out of that certificate from an electronic database of an office corresponding to that of the Registry of Companies in the place in which the foreign company is formed or incorporated. (3) For the purposes of section 368 (1) (b) of the Act, a certified copy referred to in that section, of a charter, statute or memorandum and articles or other instrument constituting or defining a foreign company’s constitution, is a copy that has, within the period of 3 months immediately preceding the day on which it is lodged with the Registrar or within such longer period as the Registrar permits, been certified to be a true copy — (a) by an official holding or purporting to hold an office corresponding to that of the Registrar in the place in which the foreign company concerned is formed or incorporated; (b) by a notary public; or (c) by a director, manager or secretary of the foreign company by affidavit or, in the case of a foreign company formed or incorporated within the Commonwealth, by statutory declaration made by a director, manager or secretary of the foreign company. (4) In paragraph (2), “electronic document” means a document that is filed, served, delivered or otherwise conveyed by electronic transmission.

Manner of verification of memorandum of appointment, etc.22. For the purposes of section 368 (1) (e) of the Act, a memorandum of appointment or power of attorney shall be verified by affidavit or, in the case of a foreign company formed or incorporated within the Commonwealth, by statutory declaration made by a person verifying that he was present and saw — (a) the seal of the foreign company duly affixed to the memorandum of appointment or power of attorney; or (b) the memorandum of appointment or power of attorney duly executed on behalf of the foreign company in such manner as to be binding on the company.

Manner of verification by statutory declaration23. For the purposes of section 368 (2) of the Act, a statutory declaration of a copy of the deed or document referred to in that section shall be made by a director, manager or secretary, or by the agent, of the foreign company declaring that he has compared the copy with the original deed or document and that it is a true copy of the deed or document of which it purports to be a copy.

Notice of registration of foreign company24. For the purposes of section 371 of the Act, the Registrar shall issue a notice of registration of a foreign company via electronic mail, as set out in Part III of the Schedule, to the applicant upon the successful registration of the foreign company.

Documents to be lodged where change or alteration is made

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25. For the purposes of section 372 (1) of the Act, the documents that a foreign company is required to lodge with the Registrar are as follows: (a) where any change or alteration is made in the charter, statutes, memorandum or articles of the foreign company or other instrument constituting or defining its constitution — (i) a copy of the instrument effecting that change or alteration; or (ii) a copy of the charter, statutes, memorandum, articles or other instrument as changed or altered, in either case being a copy certified to be a true copy in the same manner as a copy is certified under regulation 21 (3) to be a true copy; (b) where any change or alteration is made in the name of the foreign company — (i) a copy of the certificate of its incorporation or registration in its place of incorporation or origin or a document of similar effect (being a certificate or document evidencing that change or alteration); or (ii) where there is no such certificate or document, a copy of the instrument effecting that change or alteration, in either case being a copy certified to be a true copy in the same manner as a copy is certified under regulation 21 (3) to be a true copy; and (c) where any change or alteration is made in the powers of any director resident in Singapore who is a member of the local board of directors of the foreign company, a memorandum duly executed by or on behalf of the foreign company stating the powers of the local directors as changed or altered.

Fees ( 2 nd Schedule CA ) • $300 for registration of foreign company having a share capital• $1200 for foreign company not having a share capital

Registrar to issue certificate • S371 CA: when Registrar is satisfied that requirements of CA have been complied with, he

issues an electronic notice of registration of the foreign company. Upon application and payment of prescribed fee, Registrar will issue a certificate under his hand and seal (hard copy), confirming the registration of the foreign company.

Other information on foreign company• S 372 CA: foreign company must notify Registrar when there is any change in its particulars• S 373 CA: foreign company must file its accounts with ACRA• S 377 CA: foreign company must notify Registrar within 7 days if it ceases business in

Singapore. Registrar must be notified within 1 month if foreign company goes into liquidation or is dissolved in its place of incorporation.

• Foreign company carrying on business in Singapore to comply with local legal requirements.

Information on representative offices• Registration procedure : submit prescribed application form, copy of company’s certificate of

incorporation, annual report and audited accounts for one year.• Processing fee : $200 for online applications for one year registration. From 1 Jan 2006,

processing fee of $300 is applicable for manual or hardcopy application.• Reporting requirements : no filings with ACRA required. Only inform ACRA of change in

nature of activities or its local representatives, closure or upgrading of operations. IES must be notified within 4 weeks of any change in name, address or contact numbers.

b. Public Companies

Incorporation requirements ( S 61(2)) CA

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• While a private company may commence business upon receiving its notice of incorporation, a public company must submit additional electronic documents in order to obtain a notice of entitlement to commence business.

• These are:o Statement in lieu of prospectuso Declaration made by a director or secretary or a prescribed person stating that every

director of the company has paid for each of the shares taken or contracted to be taken by him, for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash.

Conversion from Pte to Public Companies S 31(2) CA • Possible to convert from private to public company and vice versa

COMPANIES ACTSECTION 61(2) Where a public company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing power unless — (a) there has been lodged with the Registrar a statement in lieu of prospectus which complies with the provisions of this Act; (b) every director of the company has paid to the company on each of the shares taken or contracted to be taken by him, and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash; and (c) there has been lodged with the Registrar a declaration in the prescribed form by — (i) the secretary or one of the directors of the company; or (ii) a prescribed person authorised by the company, verifying that paragraph (b) has been complied with. (3) The Registrar shall, on the lodgment of the declaration under subsection (1) (b) (iii) or (2) (c), as the case may be, issue a notice in the prescribed form that the company is entitled to commence business and to exercise its borrowing powers; and that notice shall be conclusive evidence of the matters stated in it. (4) Any contract made by a company before the date on which it is entitled to commence business shall be provisional only and shall not be binding on the company until that date, and on that date it shall become binding. (5) Where shares and debentures are offered simultaneously by a company for subscription, nothing in this section shall prevent the receipt by the company of any money payable on application for the debentures. (6) If any company commences business or exercises borrowing powers in contravention of this section every person who is responsible for the contravention shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000 and to a default penalty of $250.

Change from public to private company.31. —(1) A public company having a share capital may convert to a private company by lodging with the Registrar a copy of a special resolution — (a) determining to convert to a private company and specifying an appropriate alteration to its name; and (b) altering the provisions of its memorandum or articles so far as is necessary to impose the restrictions and limitations referred to in section 18 (1).

Change from private to public company.(2) A private company may, subject to its memorandum or articles, convert to a public company by lodging with the Registrar — (a) a copy of a special resolution determining to convert to a public company and specifying an appropriate alteration to its name;

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(b) a statement in lieu of prospectus; and (c) a declaration in the prescribed form verifying that section 61 (2) (b) has been complied with, and thereupon the restrictions and limitations referred to in section 18 (1) as included in or deemed to be included in the memorandum or articles of such company shall cease to form part of the memorandum or articles. (3) On compliance by a company with subsection (1) or (2) and on the issue of a notice of incorporation of the company altered accordingly the company shall be a private company or a public company (as the case requires). (3A) The company shall, within one month of the issue of the notice of incorporation referred to in subsection (3), lodge with the Registrar in the prescribed form a list of persons holding shares in the company. (4) A conversion of a company pursuant to subsection (1) or (2) shall not affect the identity of the company or any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced by or against it prior to the conversion may, notwithstanding any change in the company’s name or capacity in consequence of the conversion, be continued or commenced by or against it after the conversion. Aust.s.26.(5) Upon the application of the company and payment of the prescribed fee, the Registrar shall issue to the company a certificate, under his hand and seal, confirming the incorporation of the company with the new status.

c. Companies limited by Guarantee

• Incorporation of such companies under CA• S 23 and S 29 CA may be applicable (I don’t see how, anyway not important)

Note: One exam question on this areaWhat are the different structures and what will you choose? Familiarise yourself with the different structures. Be familiar with BT.

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