Jul 24 2020 | by OrionW
In its public consultation issued on 20 July 2020, the Accounting and Corporate Regulatory Authority (ACRA) and the Companies Act Working Group sought feedback on proposed amendments to the Companies Act (CA). Some of the key recommendations are highlighted below.
Dematerialisation of shares and facilitating digitalisation
The use of digital media and technology were considered and proposed amendments were made to facilitate digitalisation including:
Review of company types
The concept of a “publicly accountable company”, such as a listed company, financial institution or registered charity, for the purposes of financial reporting will be introduced into the CA to replace the concepts of “public company” and “private company”. This aims to tailor the financial reporting obligations in the CA to a broader group of stakeholders such as shareholders and creditors, based on the public interest or accountability of companies.
The concept of a “micro” company will also be introduced and will be defined as a company whose total annual revenue and total assets for the previous two consecutive financial years are each not more than S$500,000. This aims to allow such companies that are non-publicly accountable to prepare reduced or simplified financial statements.
Refinements to financial reporting requirements
Currently, all companies are required to file financial statements except dormant relevant companies and solvent exempt private companies (SEPCs). It is proposed that the exemption to SEPCs be broadened to prescribed companies that meet the criteria in regulations to be issued (which will include SEPCs).
Other proposals include:
Removing outdated requirements and clarifying provisions in the CA
Finally, the proposed amendments aim to remove and clarify outdated CA provisions by:
The proposed CA amendments will be a positive development to ensure Singapore’s corporate laws and regulatory framework keep abreast with companies’ changing practices in the current business landscape. In addition, the easing of compliance requirements would improve efficiency in companies’ operations and provide regulatory support in meeting COVID-19 Safe Management Measures in the workplace.
Disclaimer: This article is for general information only and does not constitute legal advice.