Singapore’s Companies Act 1967 (CA) requires or permits a variety of meetings for company members, such as annual and extraordinary general meetings and meetings of a class of members of a company. Although the CA does not prescribe how those meetings must be conducted, the CA’s provisions tend to contemplate meetings held in a physical location with members physically present.
During the COVID-19 pandemic, the Singapore government imposed two ‘circuit breakers’ (i.e., lockdowns) that significantly restricted the movement of people and regulated their activities when they were permitted to move. Physical business meetings were effectively prohibited. The government therefore issued an order under its omnibus COVID-19 law that permits company meetings to be “convened, held or conducted, whether wholly or partly, by electronic means”. That order, which also applies to members of variable capital companies, business trusts, unit trusts and debenture holders, is set to expire on 1 July 2023.
In a consultation paper published on 9 February 2023 (Consultation Paper), the Accounting and Corporate Regulatory Authority (ACRA),the Ministry of Finance (MOF) and the Monetary Authority of Singapore (MAS)propose to amend the CA to effectively make the temporary COVID-19 measure a permanent feature of company law. The Consultation Paper proposes corresponding amendments to the Variable Capital Companies Act 2018 (VCC Act) and the Business Trusts Act 2004 (BTA) but does not address the Securities and Futures Act 2001 in respect of meetings of unitholders of unit trusts or holders of debentures. The Consultation Paper proposes the amendments to be effective on 1 July 2023 to avoid a gap after the expiration of the COVID-19 order. The period for the public to comment on the Consultation Paper ends on 20February 2023.
The proposed amendments to the CA address three key points regarding meetings conducted by electronic means:
The Consultation Paper also proposes to amend the CA to provide that a general meeting will not be invalid because a technical malfunction or outage affected a virtual or hybrid physical/virtual meeting. However, a court may, on application of a company member, declare the meeting to be invalid if it finds that the technical malfunction or outage caused or may cause a substantial injustice that the court cannot remedy by order. This amendment would accord treatment to virtual and hybrid meetings on par with the CA’s treatment of physical meetings.
To address potential future issues that may arise regarding virtual and hybrid meeting, the Consultation Paper also proposes to authorise the government to regulate the use of virtual meeting technology.
The proposed amendments to the CA, VCC Act and BTA will enable companies and trusts to conduct meetings of members and unitholders with greater flexibility, efficiency and convenience through the use of virtual meeting technology.
Company and trust leadership should:
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Disclaimer: This article is for general information only and does not constitute legal advice.